Property in Polis - Latchi - Golden Land Developers - Cyprus Property

Property acquisition:

Cyprus is the most popular overseas real estate in the Mediterranean. The legalities for property purchase are relatively simple. A governmental approval for buying property is required for foreigners, which is granted as a routine to all bona fide purchasers, if the following are met:

• No criminal record
• Annual income of CY £12 000 (EUR 20,503.22)

Non Europeans are permitted to buy for personal use:

• An apartment
• A house
• A plot of land
• Each kind of property not exceeding 3 donums (4, 000 square metres)

Procedures:

A written application must be submitted by the non Europeans purchaser to the Council of Ministers to grant permission for acquiring immovable property in Cyprus. The application should be submitted after the sign of sale contract. The approval is granted to all bona fide purchasers, as a routine procedure.

Nominal application fee is CY £150 (EUR 256.29), payable when permission is granted.

Transfer of ownership from vendor to purchaser is accomplished through the Cyprus Land Registry Office by a simple procedure, either by the purchaser in person, or by appointing a third party with a Power of Attorney.

For a non Cypriot purchaser, the prerequisite for registration is to provide evidence of payment for the property with foreign exchange, as well as the signed contract of sale.

Upon the issuance, the title deed will be registered in the name of the purchaser, and will be recorded in the Government archives, which are confidential and inaccessible.

Transfer Fees:

Transfer fees are a one-off payment borne by the purchaser and payable to the land registry in the district of your property’s location. The amount is based on a sliding scale as shown in the table below, and depends on the market value of your property on the date of purchase. The fee is due in cash when the title deeds are transferred into the purchaser’s name.

Transfer Fees based on Land Registry Office evaluation:

• Up to CY £50 000 ( EUR 85,430.07) - 3% fees
• CY £50 001 (EUR 85,431.78) - CY £100 000 (EUR 170,860.14) - 5% fees
• Over CY £100 000 (EUR 170,860.14) - 8% fees
  

For example:

          Purchase price: CY £85 000 ( EUR 145,231.12)
          Fees: First CY £50 000 ( EUR 85,430.07) x 3% = CY £1 500 (EUR 2,562.90)
          Next CY £35 000 ( EUR 59,801.05) x 5% = CY £1 750 (EUR 2,990.05)
          Total Fees: = CY £3 250 ( EUR 5,552.95) (3.82%)

Stamp Duty:

Stamp duty is due upon signing the contract.

Stamp duty rate:

• Up to the 100 000 (EUR 170,860.14) - 1.5%
• Over 100 000 (EUR 170,860.14) - 2%
  

For example:

          Purchase price: CY £150 000 ( EUR 256,290.22)
          Stamp Duty; First CY £100 000 ( EUR 170,860.14) x 1.5% = CY £150 (EUR 256.29)
          Next CY £50 000 ( EUR 85,430.07 )x 2 ‰ = CY £100 (EUR 170.86) Total Fees: = CY £250 (EUR 427.15)

Municipal Authority Taxes:

These they levy an annual property tax at the rate of about CY £20 (EUR 34.17)- CY £40 (EUR 68.34)  per year and they are for refuse collection, street lighting, sewerage etc.

Capital Gains Tax:

According to the Cyprus Law, should the purchaser decides to resell the property at a later stage, the full amount of the full paid for it in foreign exchange may be transferred abroad, as well as the equivalent of the full purchase price and any increase in value of the property. In addition to this allowance, the seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house. Property sales are subject to Capital Gains Tax at the rate of 20% on the gain, however, the first CY £10 000 (EUR 17,086.01) are tax exempt.

Gains from a disposal of a dwelling house are exempt up to CY £50 000 (EUR 85,430.07), if the owner resides in it continuously for five years prior to disposal.

Tax Privileges:

Personal effects, household goods and furniture can be free of import duty, provided that they are for personal use. There is also an allowance for a duty free car, and retired couples enjoy the additional concession of two duty free cars.

Retirees who become residents in Cyprus are taxed on their pension from abroad at the rate of 5% for amount exceeding CY £2 000 (EUR 3,417.20) annually. There is 0% on investment income (i.e. dividends and interest) brought into Cyprus. In special circumstances exemptions totaling up to CY £4 000 (EUR 6,834.41) per person or CY £8 000 (EUR 13,668.81) per couple may apply. Consequently, the total tax burden on alien residents is in practice often only 3%. Their total annual income up to CY £10 000 (EUR 17,086.01) is tax exempt, as for all Cypriots.

Additionally, Cyprus has Double Taxation Treaties with many European and other countries. The main purpose of these treaties is the avoidance of double taxation of income earned in any of these countries.

Cyprus has double taxation treaties with: Austria, Belgium, Bulgaria, Canada, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, Sweden, UK, USA and Yugoslavia.

Estate Duty / Inheritance Tax

These were abolished as of 1st January, 2000.

VAT

The VAT rate is 15% as of January 1st, 2003. 15% VAT is applied on Real Estate as of May 1st, 2004.

Local Authority Tax

Property taxes levied by the local authorities are in the range of CY £30 ( EUR 51.26) - CY £100 (EUR 170.86)  p.a., depending on the size of the property. The tax covers the cost of refuse disposal, street lighting, etc.

Communal Expenses

Property taxes levied by the local authorities are in the range of CY £30( EUR 51.26)  - CY £100 (EUR 170.86) p.a., depending on the size of the property. The tax covers the cost of refuse disposal, street lighting, etc.

Electricity & Water Supply

Utility bills for these services are payable to the appropriate authorities at fixed intervals throughout the year. They comprise a small standing charge and the individual comsumption per household. For electricity this is CY £1.65 (EUR 2.82) every 2 months plus 5.5 (EUR 9.40)cents per kW/hr. Whilst the cost per property will vary, a rough guide for both might be approximately CY £300.00 (EUR 512.58) p.a.

Finance Options

The Central Bank of Cyprus requires that acquired property must be paid for with external funds. Bank transfers and personal cheques are accepted.

As a company, we are happy to discuss the individual needs for each prospective buyer with regard to methods of payment. Demonstrating maximum flexibility, Golden Land Developers Cyprus can propose a method of payment that matches your circumstances. Golden Land Developers can arrange foreign currency loans for non-Cypriot citizens. Loan Conditions vary slightly from one bank to another, but generally, a loan for 70-80% of the property's value is granted, with a maximum repayment period up to 30 years (at loan maturity customer’s age must not exceed 70 years) and interest only options.

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