Brief Overview The legal work in purchasing immovable property is completed in 3 stages: - To buy the property – This is completed when you sign the contracts. At this stage, the purchaser pays stamp duty and land registry fees.
- To take possession of the property – This is completed when the property is delivered to you. At this stage the purchaser pays for the utilities to be connected.
- To transfer the deeds in your name. – This will be completed when:
- The Council of Ministers Permit is secured (such a permit is not required if the property you buy is a plot of land or a field).
- The Vendors complete the subdivision of the project through the Lands Office. The Purchaser pays the transfer fees at this stage. (Where applicable)
In the meantime, the legal security for the above stages will be provided by the following: - The Purchaser signs a valid contract of sale for an existing property from the Vendor free of any legal and financial impediments.
- A valid contract will be signed, stamped and registered with the Land Registry Office. This procedure prevents the Vendor from the possibility of reselling.
- The Purchaser will be entitled to secure possession of the property prior and regardless of when the transfer of title deeds takes place.
income Tax According to our tax system you are obliged to declare your income from pension or any other sources to tax authorities. Due to several different groups of taxed income, you should contact your legal advisor or the tax authority directly to determine your tax liability. Property taxes - Fees – Rates A. Real Estate transfer tax-fees Real Estate Transfer tax-fees are necessary in order to transfer FREEHOLD ownership to the name of the purchaser. This can be done as soon as the relevant Government Authority has issued the title deed and the purchase has been completed. The Transferee is responsible for the tax payment. The rates are on a graduated scale.
Value of property CY Pounds (CYP) | Transfer fee rate (per hundred %) | | Up to 50,000 | 3 | | From 50,000-100,000 | 5 | | From over 100,000 | 8 | For example if the purchase price is CYP 90,000: | The First | Cyp 50,000 @ 3 % = | Cyp 1,500 | | Next | Cyp 40,000 @ 5 % = | Cyp 2,000 | | TOTAL | | Cyp 3,500 |
Should the purchase be made in joint names (provided the price is more than Cy£ 50 000) the effective value for calculation is halved. For example if the purchase price is Cy£ 90 000: | 1st Buyer | Cyp 45,000 @ 3 % = | Cyp 1,350 | | 2nd Buyer | Cyp 45,000 @3 % = | Cyp 1,350 | | TOTAL | | Cyp 2,700 | Transfer of ownership takes place by a simple process of registration at the Land Registry Office and the issuing of a title deed after completion and delivery. This can be done either by you personally or by a Power of Attorney to your Solicitor. A prerequisite for registration, in the case of aliens, is evidence that the property has been paid for with foreign exchange and approval by the Council of Ministers of Purchaser's application to buy property in Cyprus. These formalities can be taken up by your lawyer on your behalf. However, before the registration of the completed property the purchaser should pay the transfer fees to the Land Registry office. B. Stamp Duty The purchaser is liable for the payment of stamp duty at the rate of 1.50 pounds per thousand (or 0.15%)up to the value of 100,000 CY Pounds thereafter the rate is 2.00 pounds per thousand (or 0.20%). This should be paid within 30 days of signing the contract. For example if the purchase price is CYP 150 000: | The First | Cyp 100,
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% = | Cyp 150 | | Next | Cyp 50,000 @0.20 % = | Cyp 100 | | TOTAL | | Cyp 250 | ‰ : Rate per thousand C. Immovable property tax The annual immovable property ownership tax is based upon the value of the property.
Certain immovable properties are exempt. Value of property
CY Pounds (CYP) | Annual Property tax
(per hundred %) | | Up to 100,000 | exempt (0) | | 100 ,001 250,000 | 0.25 | | 250,000 500,000 | 0.35 | | Over 500,000 | 0.40 | Important! Immovable property tax is based upon the value of the property in 1980 which is much lower than the current market value. So there is no immovable property tax for the majority of properties in Cyprus. D. Local authority taxes and rates The registered owner of immovable property is also subject to minor taxation under other laws, such as municipal or village regulations. These taxes vary according to the area, the size and the property and cover sewerage, refuse collection, street lights. The charges range in total from CYP 50 to CYP 100 per annum. In relation to water and electricity, again it all varies according to the size of the property and the size of the family. For example, the water board bill for 2 people living in an apartment will be approximately 10- 12 CYP bi-monthly (every 2 months) and the electricity bill will be 50-60 CYP (bi-monthly if air-conditioning units are used)
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