We take no responsibility for the accuracy of this information and advise you
to contact a solicitor. Laws are changing and being implemented regularly and,
as such, you should definitely seek professional legal advice.
General outline :
So, you already know that Cyprus is a great place to buy a property for
investment purposes or purely on its merits as a great place to live, work or
holiday. Since joining the EU on 1st May 2004, Cyprus plans to completely
de-restrict the housing/property sector. These plans will be completed in three
stages: 2007, 2009 and 2011, at which point Cyprus will be in line with the rest
of Europe.
Below are some guidelines for you to observe.
A European planning to live in Cyprus permanently for the next 5 years may
purchase as much property as they like, on the condition that they can prove
their intentions are genuine.
A non resident purchaser can buy 1 property or build 1 property on up to 3
donums of land (4014Sqm plot).
A foreigner may buy as much agricultural land as he/she likes, as long as they
don't build on it (under current legislation).
Resale property can be purchased by residents of Cyprus and transfer of the
Title Deeds can be completed in as little as 2 days, assuming they are available
and all other taxes and outstanding bills have been paid to date. However there
is no obligation to transfer Title Deeds immediately and the purchasers can
delay this process and pay the transfer tax when they are ready.
When you purchase a property, which had planning permission granted prior to 1st
May 2004, it is VAT exempted. Basically the builder absorbs the VAT as the last
one in the taxation chain.
When you purchase a property as a fist time buyer in Cyprus, which had planning
permission granted
after the 1st May 2004, it is eligable for VAT @ 5%, click for more details.
When you purchase a property as a second time buyer or more than one property in
Cyprus, which had
planning permission granted after the 1st May 2004, it is
eligible for VAT @ 15%, click for more details.
If VAT is due on a property, it is calculated on the the difference between the
contract of sale price, less the construction cost.
If you are buying a new property, it is advisable to have the land transferred
to your name first and a separate construction contract for the building of the
property, since this will keep the overall value of the contract down and VAT
should be calculated on this lower amount.
Foreign exchange control has now been lifted.
A foreigner, who is working in Cyprus and wishes to construct a building, can do
so from finances generated locally.
A foreigner can sell his property subject to local taxation, if any, and buy
another one. Any legitimate repeat purchaser will be granted a permit.
A foreign purchaser may let his property for periods exceeding 28 days to a
resident of Cyprus. This does not apply to office premises.
Generally, all foreigners are permitted to acquire house/business premises in
Cyprus, provided they have:
• No criminal record in their own country or in Cyprus
• The resources to support themselves in Cyprus. Approximately an annual income
of 19,400 Euro per couple is sufficient
• Meet the criteria laid down by a bank where a mortgage is required
• Companies with uncertain ownership or a doubtful business are not viewed
favorably.
A purchase/lease contract regarding real estate would still be valid if the
Ministerial Council or the District Officer rejected a foreigner's request. It
is recommended that a provision for such an event be included in the contract,
therefore a refund or other remedy is covered, although it is an unlikely
occurrence.
Applications to the Ministerial Council take approximately 3-4
months if the documentation is satisfactory.
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