Buyer's Guide

Legal System

As of May 1st, 2004, the acquis communautaire has now been extended to the island. Due to Cyprus’ colonial legacy, the legal system on the island is based on the British and Greek legal systems, as is the Land Registry, which is considered to be one of the most advanced and reliable systems in the world. Purchasers of property in Cyprus, therefore, will be far more secure, with regard to their title deeds, than they might be in other Mediterranean countries. Sunshine Luxury Villas offers all relevant information regarding legal procedures in Cyprus.

Property Ownership

Compared to many countries Cyprus has flexible property buying procedures. People of Cypriot origin and EU citizens are allowed to purchase however much property they choose. A non-EU citizen is entitled to FREEHOLD ownership of a villa, apartment, or a piece of land of up to 4,000 sq.m.

International business units may also acquire premises for their activities or for residence of their foreign employees.

Paying for Property

It is a requirement to pay for your property in Cyprus Pounds. Personal cheques, bank drafts and telex transfers are acceptable. Sunshine Luxury Villas can help with all your money transfers ensuring we achieve the best possible exchange rate for you.

Property Transfer Fees

Property Transfer Fees : these are necessary in order to transfer FREEHOLD ownership to your name. This can be done as soon as the relevant Government Authority has issued the title deed and the purchase has been settled.

The Property Transfer Fees are payable once only to the Land Registry Office according to the following scale:

Value of Property Cy£ Transfer fee Rate
Up to 50,000 3%
From 50,001 - 100,000 5%
From over - 100,000 8%

For example:

Purchase price Cy£ 85,000
1st CYP 50,000 3% = CYP 1500
Next CYP 35,000 5% = CYP 1750
TOTAL CYP 3250 = 3,82%

Local Authority Taxes (Rates): These are between 30-100 CY£ per annum depending on the size of the property and are for refuge collection, street lighting, etc.

Immovable Property Tax: The registered owner of the property is liable for this annual tax which is based on the value of the property.

Value Cy£ Annual Tax [Pounds per Thousand (%)]
up to 100,000 Exempt
100,001 - 250,000 2.5
250,001 - 500,000 3.5
over 500,000 4.0

Capital Gain Tax: For foreign owned property that is sold, generous exemptions from capital gains tax exist.

Estate Duty/Inheritance Tax: Estate Duty, which is paid on assets based in Cyprus, provides very generous allowances, which on effect, means that in most cases nothing or only a small amount is paid. You may also make out your will as a Cypriot resident, which will exclude you from country of current residence inheritance tax.

Stamp Duty: The purchaser is liable for the payment of stamp duty at the rate of 1.5 pounds per thousand up to the value of CY£ 100,000 and thereafter the rate is 2 pounds per-thousand. This duty should be paid within 30 days of signing the contract.

Family Pets

As of July 3rd 2004, the EU has implemented its new EUPETS policy, with Cyprus being a party to this agreement. In effect, it is mandatory for pets from EU countries to have an EU passport for movement between member states. Movement from a third country will require an additional EU Health Certificate.

THE CYPRUS PROPERTY MARKET - COMMENT

Cyprus’ property market is booming, with capital appreciation estimates ranging from 15 to 25 per cent over the last year. “Since the beginning of the year, property prices in Cyprus gone up by between £20,000 and £30,000,” said Paul Hann, director of Sunshine Luxury Villas. “We are advising people to get into the market quickly and purchase off-plan – that way they will have more choice of properties and will save more money with prices rising on a daily basis.” Undoubtably the biggest factor in driving up house prices over the past two years has been Cyprus’ accession to the EU, formally completed on 1st May this year.

The upwards trend looks set to continue for a while yet, according Mr Hann. “With joining the EU, house prices in beach areas will probably increase initially by approximately 50 per cent, followed by in the region of 100 per cent in the next two to three years.”

Paul notes that the market has grown steadily over the past three decades before reaching new heights in the last five years.

“Location is so important to achieving good capital appreciation, and beachfront properties and golf-resort projects are the ones with the higher return,” he says. “But factors such as the project’s masterplan, landscaping, construction standards and property management can affect the future value of a property.”

Timing is also a vital aspect of future profitability – the maxim ‘buy low, sell high’ is critical – and in order to achieve a high return, knowing the up-and-coming areas is vital.

Paul feels that there are good buys to be found across the island. “Paphos generally leads the way because it has the lion’s share of the tourist market and as a resort is open 12 months of the year, so letting potential can be maximised,” he says. “Typically, you will pay more for a property in Paphos: a good two-bedroom apartment on a complex with a pool in a desirable letting area and with good re-sale potential costs around CYP£75,000 (£87,700).”

Paul points to two of Cyprus’ larger cities for current popularity. “Two hot-spots that Britons are rushing to at the moment are Limassol and Larnaca. They offer the best of both worlds, being close to a city and at the same time within easy reach of stunning beaches and tourist attractions, including a water park,” he says. “They’re only five to ten-minutes from the airport.” “Aphrodite Hills – the integrated golf resort that includes an 18-hole championship standard course, club house, five-star Intercontinental hotel, tennis and spa facilities and a village centre – is popular, with Britons having bought 90 per cent of properties sold there.”

Those Britons who have bought at Aphrodite Hills will find themselves joining 60,000 compatriots who are estimated to own a home on the island, making Cyprus a burgeoning, as well as financially buoyant, property market.

Sunshine Luxury Villas
162 Holdenhurst Road
Bournemouth
Dorset
Tel: 0800 652 8310
Email: info@slv-overseas.com