Investment Property in Cyprus

Property purchase - Republic of Cyprus

Foreign ownership

EU citizens do not need permits or visas to enter Cyprus and since 2004, there are no restrictions on EU residents buying property. However, most can only stay for three months at a time without a permit.

Tax benefits

People retiring to the island must prove that they have sufficient income or funds to support themselves. Retiring here has significant tax benefits and the UK has an agreement with Cyprus which allows state pensions to remain index-linked when pensioners are resident on the island.

Reservation deposit

The process of buying property in Cyprus is fairly straightforward. The first step is the signing of the Reservation Deposit Agreement. During this period, the appointed lawyer will make checks with the District Land Registry to ensure that the vendor is the real owner and that there are no problems with title deeds. The reservation amount is usually 1% of the purchase price.

Contract of sale

Before exchanging contracts, your lawyer will also make a planning department search and a company search. Once the searches are completed, purchaser and vendor will sign the contract of sale. Upon signing the contract of sale, the purchaser has a six-week period to pay the first instalment to the vendor.

Title transfer

On completion, the purchaser pays for all the utilities to be connected and establishes all rights in Cyprus. If the property title already exists, both parties proceed to the transfer of title deeds and the new owners pay the balance owed. If the property is new, the title will take up to three years to be issued by the official authority, although the buyer can live in the property during this time. Real estate transfer taxes are paid to the Land Registry and are necessary in order to transfer freehold ownership to the purchaser.

Non-Cypriot citizens require permission from the Council of Ministers to purchase property in Cyprus. This normally takes from eight to 14 months and the purchaser can buy the property and live in it while waiting for the approval.

Costs and taxes

The taxes and costs of purchasing a property in the Republic of Cyprus are likely to amount to approximately 3 – 9% of the value of the property. The following is a guide to these costs:

Transfer tax – 3% for properties with a value up to CY£50,000; 5% between CY£50,001 and CY£100,000; and 8% for CY£100,001 and over
Legal fees – 0.1 – 1% of property value
Stamp duty – rate of 0.15% per CY£1,000 up to the value of CY£100,000, beyond which the rate is 2%