You have decided to relocate, visit, invest or retire to Cyprus and know it is the right thing to do. Now, all you need are answers to all those questions that are never ending when moving to a new country. We hope you find this information useful. If you have any additional questions, we welcome you to contact us and we would be happy to help.
Who can buy property in Cyprus?
All EU citizens have the right of free movement, to live and work in Cyprus without restrictions as long as they have an EU passport. This includes freedom of home ownership and investment properties.
Non EU Residents:
Can buy one house or apartment.
Can buy land not exceeding 4014 square meters.
Can not own any shares in a company dealing with property.
Must not have a criminal record.
What are the fees involved with buying property in Cyprus?
Fees invovled are a small stamp duty charge, the amount of which is calculated on the purchase price.
If the property has title deeds, then you will need to pay the transfer fees to have the deeds transferred into your name(s). The fees to be paid are calculated on the purchase price, and the number of names the property is to be registered in. When you take possession of the property you will have connection fees for the utilities - electricity, water and telephone. You need also to allow for lawyer's fees, which are usually around 1% of the purchase price. There is no agent fee paid by the buyer.
Stamp duty is calcuated as follows:
€2.56 per €1.708.60 euro for the first €170.860.00 and €3.417 per €1.708.60 euro for any amount above the €170.860.00.
What is a cancellation agreement and is there a fee?
If a property does not have title deeds then a cancellation agreement is drawn up that cancels the contract between the developer who still holds the deed and the seller. Then a new contract is drawn up between the developer and the new buyer. A fee is charged for the existing contract between the original buyer of the property and the developer to be cancelled. This is a cost of selling without deeds and is undertaken by the seller. The cost is generally 3% of the original purchase price but depends on the developer. When buying a property without deeds you may be able to cap a future possible cancellation fee at around 500 Euros in your contract when you purchase.
How do we calculate property transfer fees?
The purchase price is usually the market value and the fees are based on the market value of the property. The first 85,430 Euro is charged at 1.5% if the property is in one name. If the property is in two names then each person gets this allowance, so for two people its 1.5% up to 170,000 euros. The next 85,430 is charged at 2.5% and any amount over 170,860 Euros will be charged at 4%.
An example of a house valued at 200,000 is calculated:
- 85,000 at 1.5% = 1275.00
- 85,000 at 2.5% = 2125.00
- 29,140 at 4% = 1200.00
- Total tax fee = 4600.00
How much is the capital gains tax if I decide to sell my property?
You are required to pay 20% on the difference between the sales price and the price you originally purchased the property plus inflation during the period. There is an allowance of 17,086 Euro per owner and 34,172 Euros if a couple deducted from the resale price. If you are a permenant resident in Cyprus and lived in the home for 5 years then the allowance is 85,430 Euros.
Are there tax advantages to living in Cyprus?
Since the Cyprus joined the EU it has become somewhat of a tax haven. UK citizens upon becoming a Cyprus tax resident can receive a large percentage off their income tax bill. You must declare your worldwide income in Cyprus then the UK government does not require you to pay more. Cyprus has 43 countries with which they have a tax treaty partnership.
If you are a Cyprus resident for at least 183 days per year you are liable to pay Cyprus Income Tax on your world-wide income. To avoid UK tax on this you will need a 'DT/Individual Form' which can be downloaded from here. After completing the form you will need a Revenue Stamp from the main Post Office in Cyprus then, take the form to the Cyprus Inland Revenue Office to be stamped also. Finally, return it to the UK Tax authorities who will then arrange for your pensions to be paid without deducting UK tax. This may take a few months to process, however you should receive a rebate from the UK. If you have a state and company pension you can get UK tax relief on both.
Here are some potential maximum tax rates for different income levels and depending on your situation.
Corporate tax: 10% Personal Income Tax: 30% VAT: 15%
Can I obtain a mortgage (home loan) in Cyprus?
The following information was provided by Piraeus Bank in Paphos. The new rules are listed below.
A person requiring a mortgage needs:
- Concrete proof for the sustainable repayment ability.
- PFS (Personal Financial Statement) to be completed and signed by the applicant (attached). The debt to income ratio to be less than 30%
- Copy of passport
- Bank Credit reference (Strong proof for the credibility)
- Last 12 months bank statements of all accounts, i.e. current account and loan accounts – especially statement of the account where salary and other income is deposited
- Tax declaration form for the last three years.
- Recent 3 months pay -slip or contract of employment
- Proof of permanent address (i.e. utility bill)
- Customer’s contribution should be 50% of the purchase price. (The lowest the Sales contract or the recent valuation)
- Title deed for mortgage.
- Building permit
- Valuation report (To be executed by the bank).
Once the loan is approved it will be under the following conditions:
- 1st mortgage for the loan amount
- Life insurance in the name of the applicant for the loan amount
- Fire & earthquake Insurance
- Personal guarantee if the loan is not joint (two persons)
Is it safe to buy a property with no title deeds?
It depends on the property. If the property is part of a project where subdovosions need to take place before the title deeds are issues then this may take a long time to get the deeds and if the developer has financial issues or have taken a mortgage on the land then it is a definate no. However, if it's an individual selling that has obtained certificate of final approval and has submitted application for the title deeds and has the AX number then it would be fine.
What is an AX Number?
An AX number is a unique reference number issued by the Land Registry when an application is made to acquire the Title Deed. The Land Registry will issue your developer an AX Number when he submits an application for Title Deeds to be issued for yours and other properties covered by his planning application. If your developer has applied for Title Deeds to be issued, he should be able to advise you of the application's AX reference number. This is important when selling a property. Your developer or solicitor either tell you or research the matter.
As of September 27, 2013 there have been approved changes to the Immovable Property Tax which means the minimum payment of 75 Euros has been removed and low value properties are now exempt. Properties valued at less than 12,500 Euros are now exempt. This new law will affect over 50,000 people and over 15 million Euros in revenue has already been collected.
What are the Immovable Property Tax Rates?
The revised rates starting in October 2013 and forward are below:
|Assessed 1980 Property Value
|| Tax Rate
|€1 to €12,500
|€12,501 to €40,000
|€40,001 to €120,000
|€120,001 to €170,000
|€170,001 to €300,000
|€300,001 to €500,000
|€500,001 to €800,000
|€800,001 to €3,000,000
|More than €3,000,000
The amount of tax you will pay is calculated by the Inland Revenue Office and will be based on the 1980 value of the home and on the names on the "Certificate of Registration of Immovable Property." Properties valued at less than 12,500 Euros are exempt.
An example is if a property is in one name and has a value of 60,000 Euros you would pay 0.6 % on the first 40,000 Euros = 240 Euros. Then 0.8% on the remaining 20,000 Euros = 160 Euros to Total 400 Euros.
If the same property is registered in two names then the payment will be calculated on half the 1980 value for EACH registered owner making the payment 180 Euros each and a Total of 360 Euros.
How is the education in Cyprus and where can I find more information on schools?
Cyprus has a highly developed education system with both state and private schools available. In Cyprus, almost 7% of the GDP is spent on education making it one of the top three spenders on education in the EU. Public schools are in general seen as equivalent in quality of education to private schools. There are many locals that send their children to private English speaking schools as they know their children will be competing for university spots. Also, most children in private and state schools take extra private lessons to keep abreast or ahead of the intense lessons.
Almost 80% of Cypriot students are studying at a university abroad. Cyprus also has the highest percentage of citizens (working age) with higher education in the EU.
There are many school choices available. For a list of schools, please see our sister website here. Or see the Cyprus Ministry of Education and Culture website - this site is in Greek but it can be translated to English.
Who do I contact about importing or exporting pets from Cyprus?
Paphiakos and CCP Animal Welfare can provide information and advice on import and export of domestic pets and animals. Tel: 26 946 461 Fax: 26 222 236. Or see the Ministry of Foregin Affairs of the Republic of Cyprus website for more information.
How is the transportation system in Cyprus?
Public transport comprises of bus services, taxis, and 'shared' taxi services that are locally known as service taxis and much less expensive than a private taxi. Private car ownership is the 5th highest per capita in the world. Traffic moves on the left hand-side of the road, not on the right. In 2006 extensive plans were announced to expand and improve bus services and restructure public transport throughout Cyprus which is well underway. The main harbours are in Limassol and Larnaca that service cargo, passenger, and cruise ships. There are two international airports, one in Paphos and a larger in Larnaca - both have recently been renovated (2009).
Where can I find information on cost of living in Cyprus?
One of the best sources we have found is from the Statistical Service of the Republic of Cyprus. On this site you can see prices and inflation, economic factors, tourism statistics, labour and much more useful information.