The ins and outs of securing legal ownership of property in Cyprus
For any buyer looking to acquire real estate in Cyprus, they would need to understand and consider both the process and costs associated with this.
The whole process might seem daunting at first for those unfamiliar with it. Having guided many clients through this process, we have created a straightforward outline below to help advise potential buyers.
We hope it helps you on your journey!
Once a property has been sourced & prices negotiated, the buyer, seller and agent (if one is involved) go to the land registry office to complete the deal.
First stamp duty will need to be paid by the buyer & then the signed and stamped contract will need to be deposited.
Once the price has been approved by the Land Registry & the full amount is paid for the property, the transfer fees become payable. As soon as this has been paid, the property officially belongs to the new owner.
This whole process usually takes about half a day to complete, provided all the relevant fees/documents are in order.
Below you can find the breakdown of the fees that a buyer should be made aware of when buying a property:
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 Stamp duty amount is €20,000
The purchaser will be liable to pay the following transfer fees for a property bought in Cyprus. The fees are charged on the property’s market value at the date of purchase:
Working example: If a property is bought at €160,000:
Please note that in 2016 an incentive by the Cypriot government was introduced stating that they would discount this amount by 50% to encourage property transactions, so in the above example this would amount to a total payment of €3,150.
If a property is purchased in joint names (e.g. a husband and wife), the Property Transfer Fees are calculated as if they had each bought a property of half the value.
If a property is bought for the first-time, transfer fees do not apply to the property in question but the purchaser would be subject to pay VAT on this property.
VAT is only charged on newly built properties in Cyprus. For first-time buyers, VAT remains at 5% (provided that the property will be used as the main residence of the purchaser for a minimum of 10 years.) and 19% for additional properties bought.
Until the end of 2017, there is no VAT for the purchases of a resale property or Land.
Immovable property tax
Immovable property tax was abolished as from 1st January 2017.
*Please note all endeavours were made to ensure that the information presented is correct to the date of the article being published and is subject to change at any point.
For more information about the costs of acquiring a property in Cyprus and how you can invest, contact one of the team on +357 25 31 31 81, email us at [email protected] or visit us at www.ipncyprus.com