Why buy in Cyprus?

Cyprus is the third largest Mediterranean island and has a rich history dating back 9000 years. It is situated at the meeting point of Europe, Asia and Africa. The island's strategic position coupled with its attractive all-year-round climate, the warm hospitality of its people and the low costs of living make Cyprus one of the most popular locations worldwide for foreign investors to purchase property. Cyprus is a well developed island and those living there enjoy an extremely high standard of living, backed up by a sound infrastructure of reliable banking institutions, legal, accounting, telecommunication and education facilities. Cyprus enjoys a favorable tax regime and it has one of the lowest rates of crime in Europe. The fact that Cyprus was a British colony until its independence in 1960, means that the island has maintained a British based (common law) legal system which is both sophisticated and familiar to those purchasing from a common law jurisdiction. The fact that English is widely spoken also makes Cyprus extremely accessible to those considering a purchasing abroad.

Who Can Purchase?

In May 2004 Cyprus joined the European Union and as part of its commitment to affording all EU member state citizens those rights to which they are entitled under EU law, The Acquisition of Real Estate (Amendment) Law 2003 (which came into force on 1 May 2004) was enacted. Its purpose was to extend the rights (and remove some of the restrictions) to property purchase in Cyprus for EU Citizens. The new law distinguishes between two categories of EU citizen:

1. EU Citizens permanently resident in Cyprus - these citizens enjoy the same rights as Cypriot citizens and may purchase freely in Cyprus. To be a 'permanent resident' an individual must spend 184 or more days in Cyprus per year. In the case of a company, the headquarters, central management or main base must be in Cyprus

2. EU Citizens not permanently resident in Cyprus - these citizens may purchase any type of real estate freely except a secondary residence. If they intend to purchase a secondary residence then a permit from the Council of Ministers must be obtained.

All restrictions on purchasing property in Cyprus imposed on EU citizens, be they a resident or a non resident, are to be removed by April 2009

Non EU citizens may acquire land subject to the prior permission of the Council of Ministers. The grant of such permission will usually be dependent upon whether the real estate is to be used as a residence and that the plot does not exceed 3 donums.

Once the property is purchased it will be registered in the name of the purchaser and there is no restriction on the sale of property.

What is the process?

The purchase process in Cyprus is broadly reflective of the UK system, with the additional great advantage that all property in Cyprus is registered. The Land Registry keeps a central record of all transactions, which gives a complete and accurate reflection of the state of the title of the land at any given time. This renders the purchase process comparatively straight-forward.

How do the searches work?

A search against the Land Registry title can confirm that the seller has the ability to sell the land, confirm the extent and exact boundaries of the property and will reveal any covenants or restrictions placed over the land. Further, in depth, searches can be conducted where they are deemed appropriate.

Do I need to sign a contract?

Cypriot law specifies that property purchase contracts must be in writing. Once the contract has been signed, then the stamp duty must be paid within a period of 30 days to the Inland Revenue. The rates are calculated as a percentage of the value of the property as follows:

If the stamp duty is paid late then there will be an additional fine.

The signed contracts should be filed with the District Lands Office within two months of execution and this will allow the purchaser the remedy of specific performance of the contract if there is a breach. Title Deeds are issued by the District Land Office upon proof that the transfer fees and other taxes have been paid and the construction work on the property is complete. Once this has been completed then the transfer of the title deeds will take place. Transfer fees are calculated as a percentage of the accumulated value of the property as follows:

What are the Ongoing Costs?

Immovable Property Tax is payable annually on the property. The contract will usually provide that any payment the seller has made in advance in respect of the immovable property tax attaching to the property will be apportioned so that the purchaser is liable to the seller to reimburse him for the tax applying from when the property is transferred. The rates are calculated based on the market value of the property on 1st January 1980 and are as follows:

As a further ongoing cost, purchasers should be aware of the Local Authority tax, which is payable annually. The rates are dependent upon the size of the property; it will amount to between CY£30 and CY£100 per annum.

Can I depend on Country Rose to help me out through the process?

Country Rose helps all their clients through the process of purchasing and beyond. It can offer the services of its in house lawyer to assist in any way and can even arrange financing through its banking partners. The company also can help with the moving buy offering them the removal service, transferring a vehicle or purchasing a new one.
Our after sales team, can take care a property when the owners are abroad, by arranging to maintain and clean it, or they can provide let services for a small fee.