The property purchase process in Cyprus and its overall costs

Foreigners can freely purchase properties in Cyprus.

The Cypriot legal system is based on British common law. All contracts of sale are private agreements between the seller and the buyer and must by law, be in writing. All contracts of sale are in English, being the language recognized by the government authorities, and normally a lawyer is engaged by the buyer to draft such contracts and to undertake all the paperwork. Legal fees are generally negotiable.

The first stage of purchasing a property entails the payment of a nominal deposit. The contract is then drawn up by a lawyer, and on signing, the buyer has to pay generally from 20% up to 30% of the value of the property, being the balance payable according to the contractual terms agreed.

Once the contract of sale has been signed, the lawyer should file such contract with the Land Registry within 180 days. This ensures the beneficial rights of the buyer and the property ownership is then legally protected. Once filed, the contract of sale cannot be withdrawn by anyone other than the buyer, meaning that the property cannot be leased, sold, transferred or mortgaged without his consent.

Upon transfer of the property and registration in the purchaser’s name, the district Land Registry office charges transfer fees.

Transfer fees are levied at progressive rates and are based on the purchase price or market value of the property, as determined by the Land Registry department, and calculated as follows:

PROPERTY VALUE, (€) TAX RATE
Up to € 85,000 3%
€ 85,000 – € 170,000 5%
Over € 170,000 8%

No transfer fees are payable if the transfer of immovable property is subject to Value Added Tax (VAT).

Buyers of new properties are liable to pay Value Added Tax (VAT), which is levied on the purchase price or market value of the property. The standard VAT rate is 19%. A reduced VAT rate of 5% may apply on the acquisition of a property for personal use as the primary and permanent residence and held for such purpose for the next ten years.

Stamp duty is also levied upon the purchase of real estate properties in Cyprus, with progressive rates as below.

PROPERTY VALUE, (€) TAX RATE
Up to € 5,000 0%
€ 5,000 – € 170,000 0,15%
Over € 170,000 0,2%*

*(capped at a maximum of € 20.000)

This is a one-off payment borne by the buyer and his lawyer normally makes the payment on his behalf, which is due within 30 days of signing the contract.

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