FAQs about buying property in Cyprus

• What are the procedures?
• How much does it cost?
• Moving to Cyprus
• Taxes
• Can I let my property?
• What land titles are available?

What is the process?

All our properties are sold with clear title which depends on the original title of the development. Each development, when complete, is divided into individual title deeds for each plot and is then transferred to the buyer automatically by us.

The actual procedures are as follows:

• Buyers are highly advised to take professional and independent legal advice and the validity of a title deed should be checked by a solicitor who will visit the Land Registry personally.
• Contracts of sale are drawn up and notarised, at which time a the deposit is payable, and a completion date is set. In many cases, the purchaser can return home leaving a power of attorney with their solicitor, who can then complete the purchase.
• The Contract is lodged at the Land Registry and is binding on both purchaser and vendor.
• An application to purchase must be made to the Council of Ministers which can take 12-18 months.
• The Land Registry will value the property for Purchase Tax, which is not normally included in the purchase price and which is payable on the transfer of the title. VAT is payable on the transfer of the title of property if the Vendor is a company.
• Subsequent payments will depend on the terms of the contract. For a new build, this will normally be by stage payments based on the building work.
• On completion of the entire development (or sometimes at the commencement of the project), the title will be split into individual titles, which are then transferred to the purchaser and the Land Registry will issue an updated title deed.
• There is a restriction on the size of land that foreigners can buy of 3 donums (until May 2009)

How much are legal fees?

Most Cypriot lawyers charge a fixed fee of £1200 which covers the purchase of a property and most importantly, the process of obtaining an application to purchase from the government.

What are connection fees?

New properties are connected to electricity, telephone and water supplies on the completion of the development and the utility companies charge each property an amount based on the cost of connecting the development. The cost varies depending on the area and the distance from the nearest supply but is rarely more than £500 in total.

Are there any service charges?

Most new developments of villas or apartments that have communal facilities now arrange maintenance and will charge an annual service charge.

Selling Costs

• There are no government restrictions on selling your property in Cyprus.
• Capital Gains Tax is 20% with some concessions.
• There is no inheritance or transfer tax to family members.
• Our local partners, offer competitive rates and fast results if you want to sell your property (see Links)

Running Costs

• Annual Municipal Taxes are normally less than £100 p.a.
• Electricity supply is 240 volts AC 50Hz. The power supply is subject to disruption and we can supply back up generators or UPS systems on request.
• Water in Cyprus is normally by mains supply and in some properties supplemented by wells. Water is stored in your tank which should be large enough for three days supply as some areas are only refilled every other day. Water is normally potable and can also be purchased via tanker.
• Drainage is via individual septic tanks which require servicing every 18-24 months at a typical cost of £25.
• Telephone lines can take several months to be connected but do provide International direct dialling. Internet connections are relatively cheap at no more than £10 p.m. Broadband is available by satellite but is expensive at present.
• Satellite (including Sky) TV is available.
• Mobile phones have extensive coverage in Cyprus and are relatively cheap.

• All property sales transactions in Cyprus are now conducted in Euros.
• There is a Transfer Tax on a sliding scale of 3% up to CY£50.000, 5% from CY£50.000 – CY£100.000 and 8% ovver CY£100.000
• Stamp Duty is 0.15 % of the market value of the property up to CY£100.000 and 0.20 % for over CY£100.000.
• In VAT is 15% of the market value on new properties and land. First time buyers pay 5% VAT.
• Legal service costs are normally a fixed price of £1200 or as negotiated with your solicitor. This service normally includes land search, drafting the purchase contract and application to Council of Ministers for permission to buy.
• Most property purchases in Cyprus require a connection fee to be paid to the electricity and water utilities based on the cost of connection. Allow £500 but check that this is itemised in the contract.
• Municipality Tax is sometimes levied at 1% of the LRO valuation per annum but this varies by district.
• We can recommend several reliable lawyers that offer a complete service.
• Purchase Tax and VAT are not normally included in the purchase price.
• All rates quoted are as at 7 April 2008

Household Goods

A residents permit is required to bring personal goods into Cyprus and residents may bring into the country a full household of furniture. A nominal 2 - 3% tax is levied on used goods but new goods may be subject to import duties.

We also have reliable personnel who will guide you through the Government Departments for importation of household and personal goods, vehicle registration, immigration permits, driving licences etc. - as well as advice from our legal and accountancy colleagues for your pension, investment and banking needs.

Cars

Car road tax is approximately £40 annually (more for larger cars/jeeps etc.), and third party insurance in the region of £30.

Procedures

Most applications for licences, visas, permits etc., do require an inordinate amount of patience, but the endearing charm of the Cypriot people make each and every excursion a most interesting and pleasant diversion, albeit retrospectively.

What are the holiday letting opportunities?

The Cyprus holiday market is growing rapidly and there can be a shortage of hotel rooms at peak seasons. The letting market is therefore buoyant and we offer a management and letting service for our developments that should produce a healthy income.

Please call 01923 771933 for more details

The most crucial factor in buying property in Cyprus, whether land or buildings, is to use a qualified lawyer for all contracts and Government applications. As part of our service we can recommend several reputable firms of independent solicitors, who specialise in this area and can offer a comprehensive service.

The Land Registry maintains records of all land transfers in the same way as in the UK. The governments issue the titles in the form of Title Deeds as either Freehold or Leasehold and draws no distinction between the freehold titles of properties. However, buyers should be aware of the history of the title they are buying.

Foreigners are limited to owning three donums (approx 1 acre) per person (husband and wife count as one person). There are a number of checks carried out by the Council of Ministers following an application to purchase, which can take approx 12-18 months to complete.

What are the different types of titles?

The Government of the Republic of Cyprus issues all title deeds through the Land Registry Office and officially there is only one type.

FREEHOLD

The title deed is internationally recognised and undisputed.

Government Leasehold

The Government owns the freehold of this land. Long-term leases can be granted for up to 49 years with an option for a second 49 year term. This type of title is normally used for tourism projects. Leases can be transferred directly or via a solicitor upon application to the Ministry of Interior.

With the right people assisting you, purchasing an overseas property can be an enjoyable and rewarding affair ... one, we at PCI Cyprus are familiar with. If you still have questions having read this section, please don’t hesitate to contact us!

Some of the information in these sections has been supplied by third parties and Property Club International Cyprus and its associated companies cannot be held responsible for any errors or omissions. Professional advice should always be sought at the time of purchase. Please note that tax rates may differ from the examples given above,are subject to change and will be applied at the rate ruling at the time.