Financial and Legal Services in Cyprus (South)

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Legal information on buying property in Cyprus

Important Notes on the Cypriot Law relating to property purchase by aliens

Acquisition
Under the Immovable Property Acquisition (Aliens) Law Cap 109 no non-Cypriot can acquire immovable property without prior permission of the Council of Ministers. Such permission is required both on purchase of freehold and on leases exceeding 33 years. Normally permission is granted, after written application, to bona fide alien individuals to acquire a flat or house or a piece of land for the erection of a house not exceeding two donums.

 قبرس اروپایی, خرید ملک در قبرس اروپایی, خرید ملک در قبرس جنوبی, اخذ اقامت قبرس اروپایی, اخذ اقامت قبرس جنوبی, اخذ اقامت دائم قبرس اروپایی, اخذ اقامت دائم قبرس جنوبی, خرید ملک در قبرس لارناکا, خرید ملک در قبرس لیماسول, فروش ملک در قبرس اروپایی, فروش ملک در قبرس جنوبی, فروش ملک در قبرس لارناکا, فروش ملک در قبرس لیماسول, شرکت ساختمانی در قبرس, شرکت ساختمانی در قبرس جنوبی, شرکت ساختمانی در قبرس اروپایی, طراحی خانه در قبرس, طراحی خانه در قبرس اروپایی, طراحی خانه در قبرس جنوبی, طراحی ویلا در قبرس, طراحی ویلا در قبرس اروپایی, طراحی ویلا در قبرس جنوبی, زندگی در قبرس اروپایی, زندگی در قبرس جنوبی, شرایط مسکن در قبرس اروپایی, شرایط مسکن در قبرس جنوبی, قیمت مسکن در قبرس اروپایی, قیمت مسکن در قبرس جنوبی, قیمت خانه در قبرس اروپایی, قیمت خانه در قبرس جنوبی, قیمت ویلا در قبرس اروپایی, قیمت ویلا در قبرس جنوبی, خدمات مالی و حقوقی در قبرس اروپایی, خدمات مالی و حقوقی در قبرس جنوبی

Permission is usually granted for personal use and not for letting or commercial use. Commercial use is dealt with on an entirely different basis and a different set of criteria apply.

Disposition
Once permission is granted and the property registered in the name of the alien, there is no restriction on the alien selling the property or disposing of it by Will. Furthermore, no permission will be required for the legal heir to have the property transferred into his name.

Contract of sale and leases
Under the Cyprus Law such Law contracts must be in writing. It is also advisable that contracts of sale be deposited in the relevant District Lands Office within two months after the signing of the contract so that the purchaser’s right to pursue the remedy of specific performance in the event of breach can be protected. Leases exceeding 15 years can be registered and registration should be affected within 3 months of the signing of the lease.

The transfer of title deed can be affected once the Council of Ministers’ permission is obtained and the Central Bank of Cyprus confirms receipt of the foreign funds. Upon transfer of the 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, and are calculated as of December 2011:

Property Value up to:
€85,430.07                                 3%
€85,430.08 – €170,860.14             5%
€170,860.15 – and over                 8%

The Stamp Duty is due at the time of signing the contract. The Stamp Duty is levied at the rate of €2.56 per €1,708.60 up to €170,860.14 and thereafter at the rate of €3.42 per €1,708.60.

The purchase contract must be stamped within 30 days of its dated signature; otherwise a fine will be imposed by the authorities.

The annual immovable property ownership tax imposed by the government is approximately €102.52 – €205.03 per year, depending on the value of the property. The Municipal authorities also levy an annual property tax at the rate of about €34.17 – €51.26 per year.

Other authorities may also impose a sewage tax of €34.17 – €68.34 depending of course on the value of the property.

Should the buyer decide to sell the property at a later date, Cyprus Law provides that the full amount paid for it in foreign exchange may be transferred abroad at the time of the re sale. The equivalent of the full purchase price and any increase in value of the property may be transferred immediately.

VAT Subsidy on Property Purchase
All new buildings contract VAT, currently stands at 17% as of March 2012, in Cyprus
An amount of VAT is subsidized to those who are purchasing or constructing their first permanent residence post VAT. Residences entitled to VAT refund are those which have received the building permit after 1 May 2004 (Cyprus E.U. accession).

All Cypriot and E.U. citizens are entitled to this refund as long as the property is a permanent residence and does not exceed 250sqm.

Applications can be found at our offices or at the Ministry of Finance and the following documents should be included in your claim:

Copy of Identity Car
Marriage Certificate (where applicable)
Copy of Town Planning permit or Building permit
Copy of application for Town Planning permit (where applicable)
Proof of purchase such as contract of sale, receipts, bank mortgage etc.
Any other documents proving that the property is a permanent residence such as electricity bill, water bill, phone bill etc.
Confirmation document signed by the Architect stating the exact square meters of the property

 قبرس اروپایی, خرید ملک در قبرس اروپایی, خرید ملک در قبرس جنوبی, اخذ اقامت قبرس اروپایی, اخذ اقامت قبرس جنوبی, اخذ اقامت دائم قبرس اروپایی, اخذ اقامت دائم قبرس جنوبی, خرید ملک در قبرس لارناکا, خرید ملک در قبرس لیماسول, فروش ملک در قبرس اروپایی, فروش ملک در قبرس جنوبی, فروش ملک در قبرس لارناکا, فروش ملک در قبرس لیماسول, شرکت ساختمانی در قبرس, شرکت ساختمانی در قبرس جنوبی, شرکت ساختمانی در قبرس اروپایی, طراحی خانه در قبرس, طراحی خانه در قبرس اروپایی, طراحی خانه در قبرس جنوبی, طراحی ویلا در قبرس, طراحی ویلا در قبرس اروپایی, طراحی ویلا در قبرس جنوبی, زندگی در قبرس اروپایی, زندگی در قبرس جنوبی, شرایط مسکن در قبرس اروپایی, شرایط مسکن در قبرس جنوبی, قیمت مسکن در قبرس اروپایی, قیمت مسکن در قبرس جنوبی, قیمت خانه در قبرس اروپایی, قیمت خانه در قبرس جنوبی, قیمت ویلا در قبرس اروپایی, قیمت ویلا در قبرس جنوبی, خدمات مالی و حقوقی در قبرس اروپایی, خدمات مالی و حقوقی در قبرس جنوبی

 

Transfer of title
Transfer can be affected once permission to acquire has been granted and the Central Bank has certified the import of foreign funds. Transfer fees are payable by the purchaser on the sale price of the current market value.

Example 1:
Transfer of the title deed for a real estate that was bought for €187,946, the purchaser will pay €8,201 in transfer fees in the following way:
€85,430 x 3%=    €2,562
€85,430 x 5%=    €4,271
€17,086 x 8%=    €1,367
€187,946             €8,201

Example 2:
If the real estate has been bought and transferred in the names of two people (e.g. spouses), then the purchase value of the real estate is divided in two parts and it involves reduced transfer fees.

At the transfer of title deed of a real estate that was bought for €187,946 and will be transferred in the name of two people, the purchasers will pay €5,980 in dues of transfer in the following way:

€170,860 x 3% =    €5,126 (€85,430 for each purchaser)
€17,086 x 5% =      €854 (€8,543 for each purchaser)
€187,946                €5,580

Stamp Duty
The purchaser is obliged to pay the stamp duty of 1.5% on the purchase price.

Example: 3
The stamp duty of a Contract of Sale for €187,946 will be €280. The contract should be stamped within a period of (30) days from the date of signing. Although the absence of stamps on the Contract does not necessarily render it invalid, the stamp duty should be paid before depositing the Contract of Sale in the Land Registry for the purpose of Specific Performance.

In order to avoid paying penalty the duly stamped Contract of Sale should be stamped deposited in the Land Registry within 30 days from signing.
Exchange Control.

With regard to the purchase of immovable property in Cyprus, Central Bank approval is required on the transfer of property to aliens. Such approval is granted if it can be approved by the applicant that funds for the purchase were imported from abroad. It is very important to note that without the approval, on a subsequent sale, permission to remit the proceeds out of Cyprus will not be allowed. However, on the sale of property, exportation of the purchase price will be allowed.

 قبرس اروپایی, خرید ملک در قبرس اروپایی, خرید ملک در قبرس جنوبی, اخذ اقامت قبرس اروپایی, اخذ اقامت قبرس جنوبی, اخذ اقامت دائم قبرس اروپایی, اخذ اقامت دائم قبرس جنوبی, خرید ملک در قبرس لارناکا, خرید ملک در قبرس لیماسول, فروش ملک در قبرس اروپایی, فروش ملک در قبرس جنوبی, فروش ملک در قبرس لارناکا, فروش ملک در قبرس لیماسول, شرکت ساختمانی در قبرس, شرکت ساختمانی در قبرس جنوبی, شرکت ساختمانی در قبرس اروپایی, طراحی خانه در قبرس, طراحی خانه در قبرس اروپایی, طراحی خانه در قبرس جنوبی, طراحی ویلا در قبرس, طراحی ویلا در قبرس اروپایی, طراحی ویلا در قبرس جنوبی, زندگی در قبرس اروپایی, زندگی در قبرس جنوبی, شرایط مسکن در قبرس اروپایی, شرایط مسکن در قبرس جنوبی, قیمت مسکن در قبرس اروپایی, قیمت مسکن در قبرس جنوبی, قیمت خانه در قبرس اروپایی, قیمت خانه در قبرس جنوبی, قیمت ویلا در قبرس اروپایی, قیمت ویلا در قبرس جنوبی, خدمات مالی و حقوقی در قبرس اروپایی, خدمات مالی و حقوقی در قبرس جنوبی



Capital Gains Tax
As from 1 August 1980 capital gains tax is levied at the rate of 20% on gains in excess of €17,117 arising from the disposal of immovable property by individuals.

Property Tax
Property tax of €3.40 per thousand of the market value of the property as at 1 January 1980 is payable annually. The first €171,174 is exempt.

Estate Duty
Estate Duty has been abolished in Cyprus.

Miscellaneous Expenses
Water rates and electricity charges are in accordance with the amount consumed.
Refuse collection charges vary according to the district and property and may be approximately €85 to €171 per year
Municipality of village rates are minimal and may be approximately €85 per year

In the case of a block of apartments or multiple developments, there is a common expenses charge payable by each purchaser relating to the expenses in maintaining the areas commonly used, e.g. lifts, staircases, swimming pool, central heating, and lighting.

This charge varies according to the type of property and the amenities provided and the purchaser should ascertain beforehand the approximate amount of such common charge from the developer before entering into any agreement.

Legal Note
It is important that profession legal advice should be obtained before entering into any agreement for the purchase of a property in Cyprus. In certain cases it may also be necessary to obtain professional architectural advice.

Mortgage Expenses
The expense of mortgage registration is one percent (1%) of the value of the guarantee, which is dictated by the Bank, plus the stamp duty.

Capital Gains Tax
The Capital Gains Tax is imposed with a coefficient of 20% on profits that result from disposal of immovable property in Cyprus. The tax is imposed on the profits following subtraction from the sales price of the purchase price, the transfer fees, the Land Registry fees (if any), bank fees and interest expenses, maintenance costs and all other expenses related to the property.

For profits less than €17,860.01, the capital gains tax is 0% for physical persons, for the first time.

Communal Expenses
The communal expenses usually are overwhelmed monthly or quarterly, beforehand, and vary between properties depending on the region and the type of real estate. They cover the expenses of the Registered Owner for the cleaning and maintenance of public spaces and gardens, the expenses of communal swimming-pools, the electricity in public spaces, expenses of management and repairs.
Inheritance Tax is not imposed in Cyprus

Personal effects, household goods and furniture can be imported duty free by immigrant retirees, provided they are for personal use and have been used for a reasonable period of time – approximately one year. Also, there is no duty on a car, and retired couples enjoy the additional concession of two duty free cars.

Retirees drawing a pension are exempt from withholding taxes at source, and may be taxed at the nominal rate of about 5% or less depending on income. Moreover, Cyprus has Double Taxation treaties with many European and other countries, safeguarding its residents from paying tax in both countries.

Temporary Residency in Cyprus

Introduction
As a general rule non Cypriots and their families can live in Cyprus as long as they are able to show income, generated from abroad, which is adequate to maintain the families for as long as they are living here.

The regime governing this is less strict than that for offshore companies and it offers a straightforward process for acquiring temporary residence permits in Cyprus.

Without belittling the process the wealthier the person in question the easier it is for them to live here as a temporary resident. It must be made clear that a temporary resident cannot, unless his status is officially changed, work in Cyprus.

Requirements
Ability to show income generated abroad; the income should be no less than €20,000 per annum plus rent or enough funds to purchase a property here. There may also be an additional financial requirement for families with large, say over three, number of children.

Obligation to set up a local disbursement account in Cyprus
The Law states that if a property is to be purchased then there has to be proof that foreign funds were used for the purchase. It is important to note that purchasing a property in Cyprus gives better grounds for allowing a family to settle here as temporary residents.

Once a decision is made to proceed with settling in the Country, it is advisable for an application to be filed with the immigration authorities prior to entry in Cyprus of the family. Certified copies of the passports will be required including three photographs of each family member. A bank reference for the major financial sponsor is always advisable, so it is vitally important to obtain it.

Bank statements showing proof of funds as well as an employment contract with a foreign company indicating the level of income enjoyed by the income owner is also very of importance to support the case.

There may also be a requirement for the family to be interviewed by the immigration authorities once the compilation of the case is near.

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