Cyprus is a popular place for the acquisition by foreigners of holiday houses. The popularity is attributed to many factors, like low cost of living and its high standards, the hospitality of the local population, the pleasant climate enjoying 300 days of sunshine the year round and the sense of security.
According to the Acquisition of Immovable Property (Aliens) (Amendment) Law 54(I) of 2003 which came into force on 01/05/2004, European Union Nationals or legal bodies do not require the permission of the District Officer to acquire immovable property in Cyprus any longer. All previous restrictions regarding the size, the type, the use of the immovable property and that the cost to be paid must be in foreign currency are abolished.
The situation is now as follows:
Restrictions
Foreigners are given permission to acquire one of the following:
In certain cases, it is possible that the District Officer will grant approval for the acquisition by a foreigner of a larger area of land, if the land is to be used for touristic development (e.g. Hotel or Hotel Complex), especially if the intended project is in an area where the Government wishes to promote tourism. A similar stand is taken for certain industrial sectors.
Foreigner means any person who is not a citizen of the Republic and includes a foreign controlled company. Acquisition of real estate property includes:
Application to the District Office and application details
The acquisition of real estate property by foreigners requires the approval of the District Officer of the district where the property to be acquired is situated under the Immovable Property Acquisition (Aliens) Law Cap. 109. The details required for the application and its subsequent amendments are as follows:
a) Form Comm.145 completed and signed
b) Contract of sale
c) Curriculum Vitae of applicant
d) Financial standing of applicant (bank statement will suffice)
e) Particulars of the property
f) Particulars of the current owner
g) Copy of the building permit
h) Terms of payment
i) The way of acquisition (i.e. freehold, leasehold shares in property company etc).
j) Copies of the government survey plans
k) Marriage certificate in cases where the spouse does not have the same surname
l) Copies of all the pages of the passport of the applicant and of his spouse
The letter of approval or refusal may take up to eight months or even longer, however, there is no restriction in taking possession of the property in the meantime.
a) The house will be used solely for the applicant’s own residence and the building plot or land does not exceed 4,014 square meters
b) It will be used for professional or commercial business
c) It will be used for the benefit of the Cyprus Economy in general (production of products that are related to the use of new technologies or technical knowledge or tourism).
The permit has the following conditions and restrictions:
a) The transfer to be effected within a year from the date of the permit or within three years in case of constructions of a building on the property
b) The costs to be paid in foreign currency
c) All taxes to be paid in advance
d) The permit is granted for the specific property and use only
Application to the District Land Registry Office
The transfer of ownership is effected at the District Land Registry Office on submission of the following documents:
a) Application form N. 270
b) The registration certificate of the property
c) Copy of the District’s Office approval
d) Evidence of payment of all the property taxes up to date.
Central Bank Exchange Control Regulations
As from 1 February 1997 the acquisition of real estate property in Cyprus by foreigners and companies owned by foreigners is no longer affected by foreign exchange controls.
Thus on disposal of the property the whole amount can be exported (after the tax obligations have been met) and provided that the following documents are presented:
(a) a clearance certificate by The Commissioner of Income Tax
(b) new contract of sale evidencing the sale
(c) evidence that the property was purchased through external funds
(d) any other evidence that the property has been sold
ESTATE DUTY
Estate Duty is not levied in relation to individuals who have died on or after 1 January 2000.
The Deceased Persons Estate (Taxation Regulations) Law of 2000 provides for a compulsory submission of an ‘assets and liabilities’ statement of the deceased person to the Commissioner of Taxation within six months from the date of death.
Immovable Property Tax
Immovable property tax is abolished as from 1 January 2017 for the tax year 2017 and for each subsequent year.
CAPITAL GAINS TAX
Capital Gains Tax is imposed on gains from disposal of immovable property situated in Cyprus, including shares of companies not listed on a recognized Stock Exchange which own immovable property situated in Cyprus at the rate of 20%.
Certain exemptions apply.
Stamp Duty
The purchase contract should be stamped within 30 days of its signing at the rate of 1,5 per thousand up to €170.000 and thereafter at the rate of 2,0 per thousand at the Inland Revenue. Failure to pay the stamp duty within 30 days will incur an additional penalty.
Transfer fees
Transfer fees are paid by the acquirer to the Department of Land and Surveys on transfers of immovable property and registration of any lease/sublease. The transfer fees are based on the value of the property or lease/sublease as assessed by the Department of Land and Surveys, as follows:
Value of property Transfer fees rate Fees Cumulative fees
€ % € €
0 – 85.000 3 2.550 2.550
85.000 – 170.000 5 4.250 6.800
170.000 and over 8
In the case of free transfers of property between the following parties, the transfer fees are calculated on the value of the property as at 1 January 2013 at the following rates:
Mortgage Finance
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