Real Estate Services
The property market in Cyprus
Immovable property may be a plot of land, a building plot (with or without a house), an apartment or a percentage share in a common development. The majority of immovable property in Cyprus is sold freehold with the exception of apartments or houses in common developments that are sold as a combination of freehold and commonhold (condominium).
Cyprus is considered an established financial centre and a popular jurisdiction from which many companies conduct their business. It is one of the safest countries in the world to live in, whilst at the same time it offers a relaxed and high quality of life for residents of all ages and lifestyles. Therefore many companies or people choose to invest, relocate their business or reside in Cyprus. Compared to European standards, the immovable property market in Cyprus is cheap and affordable. Following a recession in 2013, real estate and investment professionals anticipate a good return in the real estate investment market in the future.
Compared to many countries, Cyprus has straight forward immovable property (land) selling and buying procedures. People of Cypriot origin and EU citizens are allowed to purchase property without restriction.
A third country national (non-EU citizen) or couple are entitled to land ownership of:
- Α plot of land of up to 4,000 sq.m. to build on own residence of any size.
- Two adjacent residences in the same development which may be united horizontally or vertically.
- Two adjacent properties in the same development consisting of one residence and one office of up to 250 sq.m. or one shop of up to 100 sq.m.
International business companies may also acquire premises for their activities or for the residence of their third country national (non-EU citizen) employees.
An investment in the Cypriot real estate is also necessary for acquiring Cypriot citizenship or residency (for more information please click here.
The Cypriot Land Registry system is one of the most advanced and reliable systems in the world, and is based on the British equivalent. The whole of the island has been photographed by aerial survey and all plots of land are registered and mapped.
Having signed a contract to buy land, a third country national (non-EU citizen) will file an application with the relevant Land Registry District Office for registering the land in his/her name, such application is usually approved within a few days.
Title Deeds in Cyprus
Transfer of title (ownership) of land from Vendor to Purchaser is a simple procedure through the relevant Land Registry District Office, and the contracting parties must present themselves to the Land Registry Officer either in person or by appointment of a third party with a power of attorney.
If the property is bought from a Developer who has sold the immovable property “on paper” i.e. in the planning stage of the development, then the title deeds for an individual apartment in the developed block of flats or an individual house in the common development may be issued in the name of the Developer, who must then transfer the Title Deeds of the unit in the name of the Purchaser. These title deeds shall indicate the percentage freehold and commonhold property of the Purchaser in the development.
If a contract to buy immovable property is deposited by the Purchaser with the relevant Land Registry District Office, the Purchaser is considered to be the beneficial owner of the land holding a proprietary right upon it. This secures the Purchaser the right to apply for a decision for specific performance of the contract i.e. to transfer the title and register the property in the Purchaser’s name.
Payment of VAT at a reduced rate of 5% instead of 19% for home owners (Also applicable to non-EU foreign nationals)
The terms under which a buyer is entitled to a 5% VAT are generally as follows:
- The premises were under construction or had been completed and subject to V.A.T. charges (All buildings for which the town planning application was submitted on or after the 1/5/2004 are subject to VAT).
- The premises are designated to be used as the residence of the buyer in Cyprus.
- The premises bought have not been used before.
- The premises must only be used (in the case of existing property) or only intended to be used (in the case of property under construction) as the main and permanent place of residence of the Purchaser in Cyprus (the buyer is not required to make Cyprus his/her permanent residence, but only to use the property as a permanent residence, when in Cyprus).
- The VAT reduction applies only to the first 200 sq.m. of the premises which should at any rate not exceed 275 sq.m.
- The Purchaser must not have any other premises as permanent residence in Cyprus.
- The Purchaser must submit an application to the V.A.T. Department and include, amongst others:
- The contract of sale (if making a direct purchase of premises from a vendor or a developer) or a contractor’s building contract (if building a house in an existing plot of land). Note that in the latter case a declaration by the building contractor that he is licensed to build the house should also be submitted.
- Proof of on-going construction if building a house in an existing plot of land.
- Architectural plans.
- Building Permit.
- Proof that the Purchaser is using the premises as a place of residence such as utility bills. Note that in if the premises are under construction, the utility bills or other such proof of use must be filed within 6 months from the date of possession of the house.
- Any other supporting documentation.
- A copy of the application certified by a competent authority or department, may be delivered to the Vendor, Developer or building contractor, as the case may be, who is obliged to charge VAT at the reduced rate of 5%.
- If subsequently it is shown that the Purchaser was not entitled to VAT at a reduced rate, such person must pay the full amount of VAT.
- If the Purchaser ceases to use the house as a place of residence within 10 years from possession of the premises, then the Purchaser must inform the VAT Director within 30 days from such date and pay the amount difference in VAT corresponding to the part of the 10 year period during which the house was not used as the place of residence.
Transfer Fees (Also applicable to non-EU foreign nationals).
Transfer fees are paid when immovable property (house, flat, shop, office, plot of land) or rights on immovable property are transferred from one person to another. These transfer fees and charged at a percentage of the value of the property or right transferred, as specified in the relevant contract or declared by the parties in the transaction. This value is also appraised by the Land Registry District Office who have a right not to accept the declared purchase value.
Transfer fees are as follows:
Value of Property Fees
€1 – 85.430 3%
€85.431 – 170.860 5%
€170.861 or more 8%
Our Services:
Through our strong corporate relationships we are associated with and are able to recommend the services of extremely experienced and professional registered real estate agents for all of your real estate needs. Our associated real estate company has an extensive range of available properties for sale.
Important decisions such as location, type of property, type of title, appraisal, due diligence, contracts, legal advice, conveyancing and financing etc. shall be presented to you so that we help you decide which is the most suitable property for your needs.
Moreover, we shall assist and make it easy for you the process of purchasing or investing in the real estate market in Cyprus, valuations and conveyance including drafting purchase contracts, depositing them in the Land Registry and following the sale through until the real estate is transferred in your name.
If you have any problems with real estate disputes including construction disputes we are here to help. We have wide experience with such matters and shall step in, including initiating and handling any potential lawsuits, so as to make sure that nothing goes wrong.
If you are a developer or would like build in Cyprus we can assist you in the process of locating and purchasing the land, of obtaining all required planning and building licences, of constructing and selling the project. Our wide network of associated architects, civil engineers, interior and exterior designers, builders and contractors, real estate agents and marketers shall be at your disposal.
Important Note
The above information is current as of 2017 and is subject to changes from time to time. Persons interested to buy real estate in the Republic of Cyprus should seek our updated professional advice before committing themselves into any transaction or decision.
Properties for Sale
Contact our real estate associates for available properties for rental or sale at: http://www.react-estates.com