Cyprus

Cyprus

Michael Kyprianou and Co LLC

1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Any legal entity or individual can acquire immovable property in Cyprus with certain limitations as set out below:

  1. Under Cypriot legislation Cypriots or European Citizens are allowed to acquire any property without any restrictions.
  2. Non-European citizens who wish to acquire immovable property are required to obtain the permission of the council of Ministers in order to do so and are restricted to the type and size of the property they can purchase.

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

There are no formal restrictions but each bank has its own policy and criteria for allowing the above.

2

Taxes

Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

  1. Stamp Duty:
  2. A one-off stamp duty is levied on the purchase of property in Cyprus. The rates are dependent on the contractual purchase amounts and payment is due within 30 days of signing the Sale Agreement. The amount is payable by the purchaser to the tax authorities.

    Purchase Price in € Stamp Duty in %
    Up to 5,000 0.00
    5,001 - 170,000 0.15
    Over 170,000 0.20

    Note: Maximum Duty €20,000

  3. Transfer Fees:
  4. The purchaser will be liable to pay the following transfer fees for the property acquired, when this is registered in his/her name at the Land Registry Office. The fees are charged on the property’s market value at the date of purchase.

    Property Value in € %
    Up to 85,000 3.00
    85,001 - 170,000 5.00
    Over 170,000 8.00

    (The rates above apply per person)


  5. Important Note:
    1. Exemption from transfer fees if the transfer relates to a transaction that is subject to VAT. VAT is charged at the standard rate of 19% where a reduced rate of VAT (5%) has been introduced for properties purchased by permanent residents of Cyprus, provided that the property will be used as the main residence of the purchaser for a minimum of 10 years.
    2. In case a transaction is not subject to VAT, the legislation provides for an exemption of 50% of the transfer fees. This applies to transactions where transfer fees apply or are due and the transfer relates to plots of land, buildings or interests in land or indivisible interests that are sold for the first time from the date of issue of the relevant building permit and the relevant contract is prepared and submitted for the first time to the local District Land Registry during the period of application of the law.
Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

  1. Immovable Property Tax is abolished as from 1 January 2017
  2. Until tax year 2016, the owner of immovable property situated in Cyprus was liable to pay an annual IPT which is calculated on the market value of the property as at 1 January 1980, at the varying rates as noted in the table below, which apply per owner and not per property.

    Up to €40,000 0.60%
    €40,001 - €120,000 0.80%
    €120,001 - €170,000 0.90%
    €170,001 - €300,000 1.10%
    €300,001 - €500,000 1.30%
    €500,001 - €800,000 1.50%
    €800,001 - €3,000,000 1.70%
    Over €3,000,001 1.90%

    (with minimum tax €75)

  3. Local Authority Tax
  4. Property taxes levied by the local authorities are payable annually and may vary, depending on the size of the property. The tax covers the cost of garbage disposal, street lighting, etc.

    Property taxes burden the legal owner of the property not the tenant or occupier.

Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

The abolishing of immovable property tax as of 1.1.2017.

Reduction of transfer fees by 50%.

Abolition of transfer fees in cases where vat is paid for the property.

Inheritance Tax has been abolished with effect 1 January 2000, and is no longer imposed.

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

Ownership of Real Estate is evidenced by the title deed issued by the Land registry, which shows the registration number, description and all specifics of the property.

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

This is possible through concept of a trust recognised under Cypriot Legislation.

Need more information?

Contact a member firm:



Savvas Savvides
Michael Kyprianou & Co
Paphos, Cyprus