Cyprus Property Regulations
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
We take no responsibility for the accuracy of this information and advise you to contact a solicitor.
Laws are changing and being implemented regularly, as such you should definitely seek professional legal advice.