Legal & Tax Information

Permission to buy property in Cyprus

Cypriot nationals and national of EEA nationals who reside permanently in Cyprus
Cypriot nationals, as well as nationals of EEA states who permanently reside in Cyprus, have the right to acquire immovable property in Cyprus, without any restrictions.
 
Nationals of EEA nationals who are not permanent residents of Cyprus
The restrictions that apply for nationals of EEA states that do not reside permanently in Cyprus, have been lifted in 2009, and all EEA nationals enjoy equivalent rights to the Cypriot national, independently of their residence status.

Nationals of non-EU member states
The law requires non-EEA nationals or companies wishing to acquire immovable property to obtain the permission of the Council of Ministers. Permission is routinely granted for the following: 

An apartment, or a house, or a plot of land of maximum 4,014sq.m for the erection of only one house for use as a residence only by the purchaser and his family.
In May 2013 the Ministry of Interior issued a circular to the effect that non-EU citizens will be allowed to own two properties, which can be two residences or one residence and commercial premises with a floor area up to 100 square metres.
 

Land Registry function and Title deeds

The Cyprus Department of Lands and Surveys, is one of the most advanced and reliable systems in the world and the longest established government department. It has sole responsibility for land registration, with offices in the six major towns.
 
To ensure the transfer of the acquired property into your name, the contract of sale is duly signed and stamped and Patroclos Group, or your lawyer, submits a certified copy of the Contract at the Land Registry Department.
 
When the Title Deeds are issued Patroclos Group will transfer the title deeds of the property to the name(s) of the purchasers.
 

By purchasing your property from Patroclos Group, you are guaranteed your property’s Title Deed.


Transfer of ownership (Conveyancy) from Vendor to Purchaser is a simple procedure undertaken through the Cyprus Land Registry Office, either by the buyer in person or by appointing a third party with a power of attorney. The deposited Contract of Sale in the Land Registry, the purchaser prevents the Vendor from transferring the property in the name(s) of a third party.
 

Specific Performance

According to the Provisions of the Law, the purchaser of property can secure the transfer of the acquired property in his/her name by depositing a duly signed and stamped copy of the contract of sale in the Land Registry upon signing the Agreement.
 
By depositing the Contract of Sale in the Land Registry the purchaser acquires the right to seek "Specific Performance" of the terms and conditions of the Contract of Sale and thus he can impose the transfer of title of the immovable property in the name of the purchaser, even when the Vendor does not wish to be involved in such processes. 

 

VAT & Transfer fees on Property

Property VAT
The standard VAT rate is 19% when buying new property
For the first residential property bought in Cyprus the VAT is 5% subject to the following conditions 
  • The property must be used as the primary and permanent residence of the purchasers for the next ten years.
  • The Purchaser has not acquired any other residence in Cyprus with a reduced VAT rate. 
  • The reduced VAT rate of 5% is applied on the first 200sq.m (calculated only on the internal covered area) of the property as per the architectural plans submitted to the Authorities. On the remaining square meters, the standard rate of 19% is imposed.

*No VAT is charged on the purchase of land.
 

Property Transfer Fees
When transferring the title of ownership of the property in the name of the purchaser, at the Department of Land and Surveys, the Purchaser is obliged to pay the following transfer fees, calculated according to the purchase value of the property as it appears in the Contract of Sale.

 
Property Price   Rate   Fee   Accumulated Fee
First €85.000   3%   €2.550   €2.550
€85.001 to €170.000   5%   €4.250   €6.800
Over €170.000   8%        

*Properties subject to VAT are exempt from transfer fees. 
*Properties not subject to VAT are eligible for a 50% exemption of transfer fees.


  
Example:
Transfer of the title deed for a property that was purchased for €500,000 and is not subject to VAT, the purchaser will pay €16,600 in transfer fees in the following way:
 Property Price  €500.000
First €85.000 at 3% = €2,550  €2,550
€85.001 to €170.000 at 5% = €4,250 accumulated  €6,800
Over €170.000 at 8% = €26,400 accumulated  €33,200
Transfer fees €33,200
50% exemption  €16.600
 TOTAL Transfer fee payable  €16.600















*The purchase of Land is always subject to Transfer fees


Stump Duties

The purchaser is obliged to pay the stamp duty of on the purchase price at the following rates:

 
First €5,000 - €0.00
€5,001 to €170,0000 - 15%
over €170,001 - 0.20%
 
Example
Property Price: €500.000
 
 
€5.000 at 0 = 0
  €170.000             at 0,15%    = €255
remaining €330.000     at 0,20%   = €660
TOTAL Stamp Duty payable 915

 
*In order to avoid paying penalty the duly stamped Contract of Sale should be stamped deposited in the Land Registry within 30 days from signing.
 

Capital Gains Tax

The Capital Gains Tax is imposed with a coefficient of 20% on profits that result from disposal of immovable property in Cyprus. The tax is imposed on the profits following subtraction from the sales price of the purchase price, the transfer fees, the Land Registry fees (if any), bank fees and interest expenses, maintenance costs and all other expenses related to the property.
 
Individuals are allowed to deduct from their capital gains the following, under certain conditions:
 
                        Type of disposal   Amount (€)
Disposal of private residence (under conditions)   85.430
Disposal of agricultural land by a farmer    25.629
Any other disposal   17.086
 
 

Inheritance Tax

Has been abolished from 1st January 2000 (Statute No. 78(1)/2000)
 

Conventions Preventing Double Taxation 

Cyprus has contracted conventions of prevention of double taxation with a number of countries. Apart from the Conventions that are in force, further agreements are pending with other countries which at the present stage are under the process of negotiation. These conventions will probably influence positively the property arrangement of immovable property in Cyprus as well as different groups of people who may decide to reside in Cyprus, as pensioners and/or investors.
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41 - 43 Spyros Kyprianou Ave., Patroclos Tower 6th floor, 6051 Larnaca, Cyprus
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+357 24812000
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+357 24635964
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info@patroclos.com.cy