Buying Property in Cyprus
Buying Property in Cyprus
Who needs permission to buy property in Cyprus?
Non-Cypriot persons wishing to purchase property in Cyprus must submit a written application to the Council of Minister after signing the contract of sale. As long as this is done within a reasonable time, moving into the property is allowed. In most cases permission is just a formality if you meet the criteria that the Cypriot Government has in place.
Legal entities controlled by citizens of the EU require permission to buy immovable property unless they have their headquarters in the country.
Who does not need permission to buy property in Cyprus?
EU citizens who are permanent residents in Cyprus do not require permission to buy immovable property and they can register multiple properties provided they stay in the country for the following 5 years.
EU companies that have their headquarters and registered offices in Cyprus do not require permission to buy immovable property.
Permanent Residence Permit
Non EU citizens that purchase property in Cyprus can apply for a permanent residence permit under the following criteria:
- Proof of annual disposable income is set at a minimum of €30,000. This increases by €5,000 for each dependent child and €8,000 for each dependent parent. This income must be brought into the country from overseas. Cypriot Bank will need to confirm that this amount is deposited in a bank account.
- Application for residence permit must include the title deed of the property or contract of sale. Property must be worth €300,000 with proof of payment of at least €200,000.
- Submission of a clean criminal record must be issued by the authorities of the country of origin of the applicant.
- A statement must be submitted stating that you will not be working or engaged in any business in Cyprus
- You must visit Cyprus at least once every two years
The application will be examined by the Minister of Interior and permanent residence is usually granted within 2 months, provided you meet all the criteria.
Cyprus Citizenship by Investment
Under the right conditions, Non-Cypriot persons can apply for Cypriot citizenship through naturalization by exception. According to the criteria set by the Cypriot government, an investment of at least €2 million is required and this must be retained for at least three years. Before applying for naturalization, the applicant must have a residence permit for at least six month. Obtaining Cypriot citizenship automatically gives you EU citizenship and this is one of the biggest draws to this investment plan. The criteria and benefits set by the Republic of Cyprus are as follows:
- The 2 million Euro investment must be in real estate, infrastructure projects or land development. Investments in funds or financial assets of Cypriot companies are also allowed.
- A permanent residence valued at 500,000 must be included in the total investment
- Investment must be kept for a minimum of 3 years
- The applicant must have proof of a clean criminal record from their country of origin
- Applicant must have residence permit
- Citizenship will allow you to live, work or study in any EU member state
- Free visa entry into more than 150 countries
- Residency in Cyprus is optional once you become a citizen
- Residing for more than 183 days a year will require tax registration
- Citizens will be allowed to rent their property
- Dual citizenship is permitted
- Applicants parents are entitled to apply for citizenship as long as they own a permanent residence in Cyprus valued at €500,000
What other costs are involved when buying property in Cyprus?
Legal fees will depend on the company you choose to represent you. This could vary from €1,000 to over €4,000 and you would need a property lawyer to help you submit all the paperwork required to get permanent residence or citizenship and to help you set up the contract of sale. Payment terms are usually specified and they may vary according to the developer. Payments are usually staggered and scheduled on completion of each section of the project. The signed contract of sale must be filled with the Land Registry Department, this will ensure that the property will eventually be transferred into your name once it is fully paid for.
Cyprus has set its Value Added Tax at 19% since its EU accession in 2004. This was the amount that had to be paid for the purchase of new property until the VAT amendment law went into effect reducing the rate to 5% on new residential properties. In order to be eligible for the reduced rates, the property must be used as a permanent residence and must be the only property purchased at the reduced rates. This reduced rate only applies to individuals over the age of 28 years and is not applicable for legal entities. This rate applies to the first 200 square meters of the residence according to the architectural plans. If the house is bigger you will be charged 19% vat on the remaining square meters.
Property Transfer Fees in Cyprus
The fees charged by the Department of Land and Surveys for the transfer of immovable property are:
|Property Price||Rate||Fee||Accumulated Fee|
|€85.001 to €170.000||5%||€4.250||€6.800|
Properties subject to VAT are exempt from the above transfer fees.
Properties not subject to VAT are eligible for a 50% exemption from the above transfer fees.
Cyprus Stamp Duty
Stamp duty is payable at the following rates:
|The first €5.000||0|
|€5.001 - €170.000||0.15%|
|More than €170.000||0.2%|
As of the 1st of January 2017, immovable property tax has been abolished in Cyprus.
Other municipal fees that you will be liable for are the Local Authority Fees. The amount payable could be anything from €85 to €500 per annum depending on the size of your property. This covers your refuse collection and community services. An annual Municipal tax which is calculated on the market value of your property is calculated at 1 – 2%. This is paid to the Municipality you reside in on an annual basis. Sewerage taxes are calculated at 3 – 7 % of the market value of your property and are paid to the local sewerage board on an annual basis. For more information and for possible amendments to the laws please check for details on the official Cyprus government website http://www.moi.gov.cy/