In the Republic of Cyprus, a foreigner can easily proceed with the acquisition of immovable property. There are three stages which have to be followed in order for such acquisition to be effected.
The first stage is the drafting and the execution of an Agreement for the acquisition of immovable property.
Although the Agreement provides for the relationship between the seller and the buyer, in such case the foreigner, the Law does not recognize an ownership right to the immovable property on the part of the foreigner, until the issue of a permit (license) by the Council of Ministers.
The Agreement must be officially stamped within one month of its signing and it must be deposited to the Land Registry Office of the district where the purchased property is situated within six months of its signing. Following such deposit, the purchaser secures his/her ownership rights on the immovable property. Thus, the vendor is unable to sell and/or mortgage and/or transfer the property to someone else. This is done to cases where a separate title deed has not yet been issued for the purchased property. The lack of a separate title deed for the purchased property in the name of the vendor will not prevent the purchaser from selling the purchased property. The depositing of the Agreement in the Land Registry is done for specific performance reasons.
Cap 232 Sale of Immovable Property (Specific Performance) Law provides among others that in order to be able to bring an action to Court for an order for specific performance the Agreement must be deposited in the Land Registry within 6 months of its signing. For old properties where there is a separate title deed issued a transfer of the title in the name of the Purchaser can take place immediately.
As from 1.1.13, the stamp duty fees to be paid by the purchaser are as follow:
•For values from €1-€5,000, the fee is 0;
•From €5,001 to €170,000, the fee is 1.5‰
•And for values more than €170,000, the fee is 2‰ with a maximum of €20,000.
If the purchaser is a non-EU national, then the second stage would be the application to the Council of Ministers through the office of the District Officer of the District where the immovable property is situated, for the issue of a permit for the acquisition of the immovable property.
It should be hereby noted that a non-EU national (an alien) can purchase immovable property in Cyprus with some limitations i.e.:
- Purchase of 1 apartment, or,
- Purchase of 1 house, or,
- Purchase of a building plot, or land up to 4014 sq. m.
The District Officer may at times approve the acquisition of a larger piece of property by foreigners for: 1) Tourist Development projects and, 2) some Industrial projects.
This application is prepared by our Law Firm in respect of the client. Following that, the Council of Ministers will examine the aforementioned application and submit its decisions within approximately 2-3 months. These applications for permit are in most cases successful. Following such permit, the vendor should then transfer and register the property in the name of the Purchaser.
The third stage would be the registration of the immovable property with the Land Registry in Cyprus of the district where the said property is situated. The foreigner shall then be provided with the title deed of the property.
The transfer fees payable for the registration of the immovable property in the name of the Purchaser are as follows:
- 3% up to €85,000
- 5% from €85,000 up to €170,000
- 8% from €170,000 onwards.
It should also be mentioned that there is no Inheritance Tax in Cyprus. In relation to new properties (that is properties where the application for Town Planning Permission was filed after the 01/05/2004), V.A.T. is imposed. Capital Gains Tax will also be imposed on the net profit proceeds from the sale.