Cyprus has proved to be an increasingly popular destination by foreigners for the acquisition of real estate for a plethora of reasons.
The island of Cyprus has always been considered to be one of the top property destinations by foreign buyers. Despite the recent economic downturn that Cyprus had experienced as a result of the global economic recession, there is still a very strong interest for the real estate sector, especially from the Russian market, Middle East and Asia. The continuing demand for property by foreigners is attributed to many factors, including the relatively low cost of living, the high quality of lifestyle, the favorable policy to obtain a permanent residence through the acquisition of real estate and the fact that Cyprus is one of the top destinations for retirement.
In addition, the unique hospitality of the local population, the attractive climate, the increasingly important role of safety (Cyprus is one of the safest countries in Europe with crime at a very low level) and security, have all played an important role. Demand and market activity has caused local property values to show a steady and at times sharp appreciation, but this trend has now a slower pace. Good properties are still abundant, and local property prices are still much lower than those of other European countries such as France, Portugal and Spain.
Non-EU citizens who purchase property in Cyprus can benefit from the new and accelerated procedure for obtaining a Permanent Residence Permit.
The applicants must:
- Submit the application accompanied with a title deed or contract of sale (submitted to the Department of Lands and Surveys) for a property purchased in Cyprus of a minimum value of €300.000 and proof of payment for at least €200.000.
- Prove that they have at their disposal a minimum annual income of €30.000 transferred from overseas. The amount requirement increases by €5.000 for each dependant.
- Submit a letter from a Cypriot Bank confirming they have deposited an amount of minimum €30.000, to be deposited in the account for 3 consecutive years. The amount should be sourced from overseas. The amount must be transferred to Cyprus from abroad.
- Submit a clean criminal record certificate issued by the Authorities of their country of origin.
- Submit a statement confirming they will not be working or be engaged in any form of business in Cyprus.
- Visit Cyprus at least once every two years.
Provided that the criteria described above are fulfilled, the application shall be examined by the Minister of the Interior and the permit shall be granted within 1-2 months.
Given this new procedure and the savings of thousands of Euros due to the abolition of transfer fees, now is the best time to buy property in Cyprus.
Title Deeds Transfer of ownership 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. By purchasing your property from Frixos Louka Ltd, you are guaranteed your Property’s Title Deed. When the Title Deeds are issued, (a few years after the completion of the project / property) they are always in the name of the Developer (Frixos Louka Ltd), and then Frixos Louka Ltd transfers the Title Deed of each unit in the name of the purchaser. From the minute your Contract of Sale is deposited at the Land Registry Department, you the purchaser can prevent the owner/developer from transferring the property elsewhere or changing it. Furthermore no burdens, charges or encumbrances can affect your right to seek specific performance after the contract has been deposited with the Land Registry, since you are the beneficial owner. Stamp Duty Rate A one-off stamp duty is levied on the purchase of property in Cyprus. The rates are dependent on the contractual purchase amounts and payment is due within 30 days of signing the Sale Agreement. The amount is payable by the purchaser to the tax authorities. Note: Maximum Duty €20,000 Transfer Fees For calculating the transfer fees please click here or read more here# Purchase Price in € Stamp Duty in % 1 Up to 5,000 0 2 5,001 - 170,000 0.15 3 Over 170,000 0.20 # Property Value in € % 1 Up to 85,000 3 2 85,001 - 170,000 5 3 Over 170,000 8
Annual Property Taxes & Fees As the registered owner of the property, you are liable to an annual Immovable Property Ownership tax calculated on the market value of the property as at 1st of January 1980 (paid by the 30th of September in the year). Immovable Property Tax is payable to the Inland Revenue Department of the Republic of Cyprus. Depending on the size of your property, local authorities charge between €85 – €256 per annum for regular refuse collection, street lighting, sewerage and similar community services. Communal Services fees are payable to your local municipal authority. As the registered owner of the property, you are required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 1‰ - 2‰. Municipality tax is payable to your local municipal authority. As the registered owner of the property, you are required to pay an annual Sewerage Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 3‰ – 3,5‰. Sewerage taxes are payable annually to your local sewerage board. VAT Payable on Property Since Cyprus’ accession to the EU in 2004, VAT must be paid when buying a new build property. In cases where an application for a town permit was filed before the 1st of May 2004, VAT will not be charged. If the town planning application has been filed after the 1st of May 2004, VAT is charged on the sales price at a rate of 19%. First-time buyers can apply for VAT reimbursement in cases where they paid the full amount of VAT on single properties purchased after the 1st May 2004. No VAT is charged on the purchase of land. A reduced rate of VAT (5%) has been introduced for properties purchased by permanent residents of Cyprus, provided that the property will be used as the main residence of the purchaser for 10 years (minimum). This is applicable only to contracts of sale which are conducted from October 1st 2011 onwards. The rate will apply for the first 200 m2 of residences of total covered area of up to 275 m2. Capital Gains Tax Capital Gains Tax is levied at 20% on gains arising from the disposal of property by each individual person.The gain is reduced by an indexation allowance that takes into account the inflationery increase over the years the property was owned. Non-residents are only taxed when selling property situated in Cyprus. The following allowances are available to individuals: The first €17,086 of gains arising from the first disposal of any property in Cyprus. The first €85,430 of gains arising from the disposal of a house used by the owner for his/her own habitation. This allowance can only be claimed once. An individual claiming a combination of the above allowances in only allowed a maximum allowance of €85,430. For more information press here. The Council of Ministers announced a new scheme for granting the EU Citizenship in Cyprus to non-Cypriots. Based on the new scheme, applicants are required to invest the reduced amount of €2.5 million, on the basis that they participate in a Collective Investment scheme, worth at least €12.5 million, accompanied with the purchase of a property of at least €500.000 each. In cases where the applicant decides to invest in the purchase of privately-owned property solely, he/she is not obliged to buy a further privately-owned property of €500.000. Applicants who do not wish to participate in a Collective Investment scheme must make direct investments in Cyprus of at least €5 million. With the new and accelerated procedures in place, the applications are processed within 3 months. For more information, fill in the following form and a Sales Representative will contact you shortly.
# Value of Property (as of 1/1/1980) Rate 1 up tp 40,000€ 0.60% 2 €40,001 - €120,000€ 0.80% 3 120,001 - €170,000€ 0.90% 4 170,001 - €300,000€ 1.10% 5 300,001 - €500,000€ 1.30% 6 500,001 - €800,000€ 1.50% 7 800,001 - €3,000,000€ 1.70% 8 Over €3,000,001€ 1.90%
