Legal Information

Once you have selected your property and paid the reservation fee to take it off the market, you should seek legal advice. Stasis Estates can help you by pointing out an independent lawyer to act on your behalf. The legal system in Cyprus is based along the lines of the English system and safeguards the purchaser’s rights in many ways.

For the purchasers protection, once the sales agreement has been signed and a deposit paid, the Sales Contract is deposited with the Land Registry who provides a legal instrument called the “Specific Performance”. This procedure protects the purchaser’s ownership rights until the title deeds are issued and transferred to their name. The contract in the hands of the Land Registry cannot be withdrawn by anyone and there the property cannot be leased, sold, transferred or mortgaged. This status can only be altered by the purchaser himself.

A one off  stamp duty is paid within 30 days of signing the contract and is payable to the tax authorities at the rate of €2.56 (cy£1.50) per thousand up to €170,860 (cy£100,000) and thereafter at the rate of €3.42 (cy£2) per thousand  is due at the time of signing the Contract.

Sale Price Stamp Duty Example
Up to Euro 170,860  (CYP 100,000) 0.15 % 

Price: Euro136,688 (CYP 80,000) x 0.15%= Euro 205.03 (CYP 120)

Over Euro 170,860
(CYP 100,000) 0.20 % 

Price: Euro 256,290 (CYP 150,000) = Euro 170,860 (CYP 100,000) x 0.15% plus Euro 85,430 (CYP 50,000) x 0.20% = Euro 427.15 (CYP 250)

Your lawyer will then apply to the Council of Ministers in order to obtain the permission for an “alien” to purchase a property. This application includes the personal details of the applicant, the financial standing, and all the details for the property. This is a mere formality and very rarely is permission refused.

After the Council of Ministers approves the application another application to the Central Bank has to be made in order to confirm that the purchase was made in foreign currency.

When the property is registered in the purchasers name, the District Land Registry Office will charge transfer fees, based on the property's value at the date of purchase:

Sale Price or Market Value Rate
Euro 0 - 85,430 (CYP 0 – 50,000) = 3%
Euro 85,432 – 170,860 (CYP 50,001 – 100,000) = 5%
Over 170,862 (CYP 100,001) = 8%

These fees can be greatly reduced if the property is placed in joint names (i.e. husband and wife), the following demonstrates how beneficial this can be:

Transfer Fees on Euro 170,860 (CYP 100,000) example:
Sale Price or Market Value Rate Price for one owner
(Euro 170,860 – CYP 100,000) Joint Ownership Price
   Euro 85,430 (CYP 50,000) Euro 85,430 (CYP 50,000)
Euro 0 - 85,430 (CYP 0 – 50,000) 3% Euro 2,563 (CYP 1,500) Euro 2,563 (CYP 1,500) Euro 2,563
(CYP 1,500)
Euro 85,432 – 170,860 (CYP 50,001 – 100,000) 5% Euro 4,272 (CYP 2,500) Not Applicable Not Applicable
Over 170,862 (CYP 100,001) 8% Not Applicable Not Applicable Not Applicable
Total   Euro 6835 (CYP 4,000) Euro 5,126 (3,000)

Immovable Property Tax
 
An annual Taxation Fee is payable for all properties, calculated on the value of the property as of the 1st Of January 1980:
 
Property Value as of 1st January 1980 Tax per Thousand Pounds
Euro CYP Euro CYP
Up to 170,860 100,000 Zero Zero
Between 170,861 and 427,150 Between 100,001 and 250,000 4,272 2,500
Between 427,151 and 854,300 Between 250,001 and 500,000 5,980 3,500
Over 854,301 Over 500,000 6,834 4,000

Property sales are subject to a capital gains tax at the rate of 20% on the gain. However for foreign owned property the first €17,086 (cy£10,000) is exempt and there is an indexation allowance.
Inheritance Tax was abolished from the 1 January 2004 and is no longer imposed.