1. Is the process to buy immovable property in Cyprus difficult?
The process to buy property in Cyprus is simple and straightforward. Cyprus law is based on English law and the procedure is not complex or lengthy. A contract of sale is typically only a few pages long.
2. Is it necessary to have a lawyer?
It is not compulsory to use a lawyer but it is advisable. A lawyer can ensure that they buyer will get good title deeds and perform required due diligence such as conducting a property search with the Land Registry.
3. Can EU citizens buy immovable property in Cyprus without restrictions?
Yes. EU citizens can buy property in Cyprus without any restrictions.
4. Can non-EU citizens buy immovable property in Cyprus?
Yes. However, they must first obtain the permission of the Council of Ministers. The process is simple and the government encourages non-EU citizens to buy property in Cyprus through the Immigration programs of citizenship by investment and permanent residence by investment.
5. Is the Land Registry of Cyprus accurate and is all property registered?
The Land Registry in Cyprus provides accurate and comprehensive information and all land is registered. The Land Registry can provide a detailed history of a property in question and reveal any possible encumbrances such as a mortgage or a memo.
6. I want to buy a property but I was told by the property developer that the title deeds will be issued in a couple of months. Am I safe until the title deeds are issued?
If the stamped Contract of Sale is deposited with the Land Registry all your rights are fully secured. Although you might not be the registered owner until the issuance of the title deeds, you are the beneficial owner and your rights on the property are safe. However, due diligence must take place before the sale takes place so it can be ensured that there are no obstacles that would prohibit the issuance of the title deeds.
7. What does the process of buying property involve?
Typically a reservation agreement is signed after both parties have agreed on the sale price. The buyer pays the reservation agreement and his/her lawyer initiates the due diligence process to make sure his/her client will obtain good title deeds. The due diligence would involve a property search with the Land Registry and other investigations. The terms of the Contract of Sale will be finalised and when all due diligence process has been completed the seller and buyer can sign the Contract of Sale. The buyer pays for the stamp duty for the Contract of Sale. Before depositing the Contract of Sale into the Land Registry the seller must obtain discharge from the tax authorities and pay all taxes due which relate to the property, such as municipality taxes, etc.
Once the above process has been completed, the Contract of Sale is deposited into the Land Registry and transfer fees are paid by the buyer. Once the Contract of Sale has been deposited to the Land Registry the seller cannot sell the property to someone else and the buyer’s rights are fully secured. If the property already has title deeds, it typically takes the Land Registry around two months to issue title deeds into the buyer’s name.
8. Does the seller have to pay any capital gains tax?
Yes. Capital gains tax is 20% on capital gains from the sale of the property.
9. How much is the stamp duty that the buyer has to pay?
a. For contracts with a value up to Euros 5.000 there is no payable stamp duty
b. For contracts with a value between Euros 5.001 up to Euros 170.000 the rate is 0,15% of the value of the contract.
c. For contracts with a value over Euros 170.000 the stamp duty payable is at the rate of 0,20% of the value of the contract.
10. How much are the transfer fees that the buyer has to pay?
a. For contracts with a value up to Euros 85.000 transfer fees are 3% of the sale money.
b. For contracts with a value between Euros 85.001 up to Euros 170.000 the rate is 5%.
c. For contracts with a value over Euros 170.001 the rate is 8% of the value of the contract.