Cyprus Property Purchase Details, Laws and Guide,

CYPRUS PROPERTY PURCHASE DETAILS

PROPERTY OWNERSHIP
If you are of Cypriot origin then there are no restrictions. Also, E.U. citizens who have their permanent residence in Cyprus (the residential status is ascertained by the District Offices and is obtained when a person resides in Cyprus for a total period of 185 days per year or more) can buy a property without any restrictions. After May 2009 all E.U. citizens will be treated the same as Cypriot citizens, in spite of their residential status. For the time being they can buy only one apartment or one house or unlimited building plot or land. Citizens from the rest of the world, who wish to buy a property in Cyprus, can only buy one apartment or one house or a building plot or land approximately three donums (4,014 square meters).

International Business Companies may also obtain a property for their business and for the residence of their foreign employees after they provide that they uphold an authorized office.

MORTGAGES & LOANS
All commercial banks in Cyprus are authorized to offer mortgage facilities to assist in the purchase of property.The loan will be either in EURO or in foreign currency.The amount ranges from 70%-80% of the value of the property depending on proof of income with a repayment period ranging up to 20 years.Easy terms of payments and long-term in-house finance schemes are also available. The normal charge is the basic +3%. In the case pf a mortgage, then there are mortgage fees involved, which are calculated at 1% on the mortgage amount.

APPROVAL BY THE COUNCIL OF MINISTERS
Foreigners must acquire a Council of Ministers approval when they buy a property in Cyprus. The reason of this approval is to protect Cyprus from allowing foreigners that cannot support themselves financially, to reside in the Country. A license must be obtained from the Council of Ministers allowing you to acquire such property, in accordance with the Immovable Property Acquisition (Aliens, An Alien is defined in section 2 of the Cap.109 as an individual who is not a Citizen of the Republic of Cyprus) Law. Permanent residents also need a form of permission, but the process is simplified as permission will already have been granted for residence by the issue of a “pink slip”. The application is processed after the Contract of Sale is signed and the procedure may take several months 3 or more. In the meantime, there is no restriction in taking possession of the property. As a general rule, permission is granted to bona fide applicants provided they have: No criminal record in their country or in Cyprus The financial means to support themselves in Cyprus, proof of investments and/or nominal annual income/pension is required. Details of the Property Information of the present owner , the Sales Contract and terms of payment. The method of acquisition, for example if it’s a Freehold, Long Lease, by Share etc.

STAMP DUTY FEES
The purchaser is liable for the payment of stamp duty at the rate of 0.15% per thousand up to the value of CYP 100.000-EURO 170.860 and thereafter at the rate of 0.2% per thousand.This should be paid within 30 days of the signing of the contract.

SPECIFIC PERFORMANCE
Under the Specific Performance Law, a purchaser of immovable property may secure the remedy of specific performance by depositing a duly stamped copy of the contract of sale land with the Land Registry within two months from the date of its execution.By depositing the contract in the Land Registry, the Purchaser prevents the owner from transferring the property elsewhere or changing it, for as long as the contract is valid and legally effective. No burdens, charges or encumbrances can affect the right of specific performance after the contract has been deposited with the Land Registry.Depositing a copy of the contract to the Land Registry gives the Purchaser the right to seek “specific performance” of the terms and conditions of the contract and thus to register the property onto the purchaser’s name, even though owner may not willing to accommodate such procedures, whereas, if the contract is not deposited to the Land Registry the only remedy for the breach is damages. Also, “specific performance” is particularly useful as many purchasers are more than happy to have the security it brings and delay the issuance of Title Deeds for as long as possible to avoid paying the Transfer Fees!!!

LEGAL SAFEGUARDS FOR FOREIGN INVESTORS
Contrary to the risks inherent in the purchase of property in some countries, Cyprus has never been involved in the nationalization of any sector of the economy, or in the expropriation of property owned by non-Cypriots. Indeed, the Republic has often guaranteed foreign investments jointly and severally with local participants- consistent with its efforts to create a favorable climate for such investments.

TRANSFER OF PROPERTY
The transfer of immovable property into a Purchaser’s name can be effected once permission to acquire the said property has been granted from the Council of Ministers/Pertinent Authority.
Transfer of ownership from Vendor to Purchaser is undertaken by a simple procedure through the Land Registry Office, either by the buyer in person or by appointing a third party with Power of Attorney.Upon transfer of property and registration in the purchaser’s name, the District Land Registry Office will charge Transfer Fees, which are based on the market value of the property at the time of purchase,

TAXATION Immovable Property Tax
The annual immovable property tax is imposed on the market value of the property as at 1st January 1980, and applies to the immovable property owned by the taxpayer on 1st January each year.

CAPITAL GAINS TAX
On gains from disposal of immovable property situated in Cyprus, capital gains tax will be imposed at the rate of 20% with the first EURO17.086 being exempt for each person. The gain is the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as 1/1/1980.

SELLING YOUR PROPERTY
In the event that the purchaser should wish to sell a property at some time in the future, the funds / profits from the sale can be repatriated easily to the value of the purchase price including any amounts spent on improvements and/or additions to the property. Profits can also be repatriated plus the interest earned. Cypriot and non-EU sellers can sell their properties to both Cypriot and non-EU buyers.