How to Buy Property in Cyprus: A Comprehensive Guide

Buying property in Cyprus is a straightforward process, but it requires attention to legal and financial details to ensure a smooth transaction. Here is a comprehensive guide to help you navigate the steps involved in purchasing property in Cyprus.

Step-by-Step Process to Buy Property in Cyprus

1. Reservation of the Property

• Reserve the property by paying a reservation fee to the seller or agent.
• This step ensures the property is taken off the market while other procedures are completed.

2. Opening a Bank Account in Cyprus

• Open a bank account with a Cyprus bank to facilitate payments.
• This is necessary for transferring funds for property purchases and paying related fees.

3. Signing the Contract of Sale

• Both the buyer and seller sign the contract of sale, outlining the terms of the agreement.
• The contract is legally binding once signed and forms the basis for ownership transfer.

4. Payment of Stamp Duty

• Stamp duty is paid by the buyer to the Cyprus tax authorities.
• The rates depend on the purchase price:
  • Up to €5,000: 0%
  • €5,001 to €170,000: 0.15%
  • Over €170,000: 0.20%
• Payment must be made within 30 days of signing the contract of sale.

5. Deposit of the Contract at the Land Registry Office

• The signed contract of sale must be deposited at the Land Registry Office.
• This step ensures the buyer’s legal rights to the property are safeguarded.
• Once deposited, the property cannot be sold, rented, or mortgaged to anyone else without the buyer's consent.

6. Legal Safeguards and Specific Performance

• The Specific Performance Law protects the buyer by securing their ownership rights until the title deed is issued and transferred.
• Title deeds are typically issued within 3 years of the property’s delivery.

Key Benefits of the Cyprus Legal System for Buyers

• Protection through the Specific Performance Law ensures the property cannot be transferred, rented, or mortgaged without the buyer’s consent.
• Once the contract is deposited, the buyer’s ownership rights are secured even before the title deed is issued.

​Important Legal Considerations: Before Buying Property in Cyprus

1. Memorandum at the Land Registry Office
   • Check if the property has any memo; if so, title deeds cannot be transferred.
2. Existing Mortgages
   • Verify whether the property is mortgaged and ensure the seller clears the mortgage before transfer.
3. Building Permit
   • Confirm that the property has a valid building permit from Cyprus authorities.
4. Title Deeds
   • Title deeds are crucial for a secure purchase.
   • If the property is over 5 years old and lacks title deeds, it’s a high-risk purchase.
5. Title Deed Transfer
   • Ensure the seller can transfer the title deed to your name by clearing all tax obligations.
6. Pending Title Deeds
   • For under-construction properties, confirm the timeline and procedures for title deed issuance.

Taxation and Financial Obligations

Transfer Fees

• Transfer fees apply to resale properties only, not to properties purchased with VAT.
• The buyer is responsible for paying these fees when the property is registered in their name.
• Transfer Fee Rates:
  • Up to €85,000: 3%
  • €85,001–€170,000: 5%
  • Over €170,000: 8%

Discount: A 50% exemption applies under current legislation.

Additional Costs

• VAT:
  • First-time buyers may pay 5% VAT (on the first 130 sq. m.).
  • Additional purchases are subject to 19% VAT.

Immovable Property Tax

• €0 as of January 1, 2017.

Capital Gains Tax

• 20% on gains from the sale of property, with a €17,000 exemption for the first sale of real estate in Cyprus.

Local Authority Tax

• Annual property tax covering garbage disposal, street lighting, etc.
• Approximate cost: €230/year.

Communal Expenses (Maintenance)

• Applicable for properties in complexes or apartment buildings.
• Covers shared expenses such as pool maintenance, cleaning, and common area repairs.
• Costs vary depending on the development.

For personalized assistance and a hassle-free property purchase in Cyprus, contact Andreas Efthimiou Real Estates Agency Ltd. We provide step-by-step guidance, ensuring that your investment is secure and aligns with your goals! Contact us today to find your dream property and ensure a hassle-free buying experience in Cyprus!