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Buying a property in Cyprus – what steps should you follow?
Until 2004 when Cyprus became an European Union member state, restrictions on real estate property purchases were enabled for foreigners. These restrictions mostly referred to the size of the land plot allowed to be owned by foreign investors. However, realizing the great investment opportunities the Cypriot real estate market provides, the government has started to remove these restrictions.
In order to buy a property in Cyprus, you must:
- verify the property first – this implies a real estate due diligence process during which the property is checked with various institutions;
- reach an agreement with the seller and sign a pre-sale contract by paying an advance on the property;
- complete the purchase of the property and register it with the Land Register.
After buying a property in Cyprus, the last step is to register it with the Land Registry. This phase, which the new owner must complete in order to receive a new property deed, entails filing the proof of purchasing the property. Knowing that the methods above are straightforward and simple to follow can help you purchase real estate in Cyprus swiftly.
|Specific legislation applicable (YES/NO)||
The Law on Property (Tenure, Registration and Valuation) is one of the most important real estate laws in Cyprus (other laws also apply)
|Possibility to acquire Cypriot properties by foreigners (YES/NO)
|YES, there are no restrictions for foreign citizens seeking to buy properties in Cyprus|
|Types of properties that can be purchased in Cyprus
|Residential (apartments, houses) and commerical buildings|
|Real estate due diligence required (YES/NO)||
Real estate due diligence is not required, however it is recommended no matter the type of property
|Documents to draft for property acquisition||The sale-purchase agreement (pre-sale agreement can also be signed), information about the seller and the buyer, power of attorney if a proxy is appointed, other documents, depending on the type of property|
|Financing options availability (YES/NO)||
YES, loans and mortgages can be obtained with local banks to purchase a property in Cyprus
|Special property acquisition programs for foreign citizens (YES/NO)||
YES, under the new Residency by Investment program
|Timeframe to acquire a property in Cyprus (approx.)||The purchase procedure can span over 1 to 3 months|
|Taxes to consider upon a property purchase||The stamp duty, the transfer tax with the Land Registry, the VAT (other levies such as real estate agent fee and power of attorney issuance should also be considered where applicable)|
|Land Registry registration requirement (YES/NO)||YES, the new owner is required to register the property with the Land Register in order to obtain the deed of ownership|
|Best cities to buy properties in Cyprus||Paphos, Larnaca, Limassol, Nicosia, etc.|
|Residency requirements for foreign citizens buying real estate||No, foregin citizens are not required to be residents of Cyprus in order to acquire properties here
|Possibility to appoint a Cypriot representative during the transaction (YES/NO)||YES, our lawyers in Cyprus can be local representatives during the transaction|
|Property tax rates in Cyprus||Property taxes have been abolished in Cyprus, however, municipal levies for water and electricity apply|
|Support in buying a property in Cyprus (YES/NO)||YES, we offer real estate due diligence and acquisition support|
|Possibility to purchase properties for companies (YES/NO)||Yes, companies can also acquire real estate in Cyprus.|
Approval for foreigners to acquire real estate (if any)
|Yes, with the Council of Ministers|
Property reservation requirement (YES/NO)
No, it is not mandatory to reserve a property, but it is recommended.
|Steps to acquire real estate||
– selecting the property;
– completing the due diligence procedure;
– negotiating the terms of the contract;
|Advance payment to secure property (if any)||
Yes, 5% to 10% can be deposited as an advance payment.
|Timeframe to register the property after purchase||
|Costs associated with buying a property in Cyprus||
– transfer fees;
– stamp duties;
– legal fees.
|Special VAT rate for real estate transactions (if any)||
Yes, 5% for residential homes, 19% for other properties.
|Legal representation required (YES/NO)||
While it is not mandatory to appoint a legal representative, it is recommended to hire a lawyer.
|Capital gains tax rate for the disposal of property||20%|
|Possibility to rent the property after purchase (YES/NO)||
Yes, there are no restrictions applicable after buying a Cypriot property.
|Currency in which the transaction can be completed||
Euro, however, USD can also be used as currency.
|Special requirements for foreign investors (if any)||
No, there are no special requirements for foreign investors in order to buy properties in Cyprus.
|Availability of property purchase for EU citizens (YES/NO)||
Yes, EU citizens can acquire real estate in Cyprus.
|Requirement to maintain purchased property for foreigners (YES/NO)||No, the new owner can dispose of the property whenever he/she wants.|
Those in need of support when purchasing a home in Cyprus can count on the aid of our lawyers, including representation with the seller and the public notary.
Foreign citizens can also decide to acquire real estate in Cyprus as a property investment.
Why is real estate due diligence necessary in Cyprus?
As in all countries real estate due diligence is necessary in order to make sure the Cypriot property one is about to buy meets certain requirements, has no encumbrances but most of all meets all the buyer’s demands. Also, real estate due diligence in Cyprus is an important part in the property purchase process and many enterprisers request the professional services of lawyers especially when the property represents an investment.
A Cypriot law firm will be able to verify both seller and property before the sale takes place so customers face no difficulties.
The process of real estate due diligence in Cyprus
The buyer is encouraged to do a search with the Land Register and request information when buying a property in Cyprus. In most circumstances, when the property is purchased with the aid of professional agencies, the real estate due diligence may seem unnecessary.
However, our lawyers advise buyers to request real estate due diligence services in Cyprus, before purchasing a property. Our lawyers can find out the following details:
– information on the property’s previous and current owners, any tenancy agreements, and any rights held by third parties;
– information on any debts associated with the property, such as unpaid mortgages;
– information on any specific authorizations that may be needed if changes are to be made to the property.
In order to make sure the purchase process of the property will not be delayed by any legal issues, the buyer is advised to appeal to a law firm for real estate due diligence. Our law firm in Cyprus can verify the property for encumbrances such as mortgages or any other financial debts such as utility bills.
The lawyers can also perform a verification of the real estate with the Cypriot Land Registry which can provide valuable information about the property title. The buyer is also advised to verify the reputation of the seller and if any lease contracts or titles in favor of third parties have been concluded.
Here is also an infographic on this subject:
The procedure to purchase a property in Cyprus
Once the foreign buyer has found the right Cypriot property he or she must file an application with the Council of Ministers for the acquisition of the real estate. This measure does not apply for resident buyers. Then the buyer must pay a reservation fee that ranges between 1000 and 5000 euros depending on the value of the property and a reservation contract will be signed.
The contract will contain the terms and conditions of the sale and another 10% of the property’s value must be paid within two or three weeks. After this time, the purchase-sale contract is drawn up and signed by both seller and buyer and it must be submitted with the Land Registry in Cyprus within 60 days.
The buyer will be required to present a bank reference and a final completion certificate from the local authorities in order to receive the new property title from the Land Register in the country.
Property purchase costs in Cyprus
When acquiring real estate in Cyprus, the buyer must also consider the additional costs of the purchase. These include a stamp duty which varies between 0.15 and 0.2% depending on the value of the property and the transfer fee which ranges between at 3.5% and 8% depending on the property’s value. New buildings that have a Town Planning Permit are charged with the 19% VAT rate.
Types of properties in Cyprus
The Cypriot properties have a wide range of styles, unlike other countries, which makes the real estate sector such an attractive investment target for foreign investors.
Properties in Cyprus can be:
- Townhouses: they are a great option and an alternative for villas, offering good living spaces and less lend to maintain. The exterior spaces generally include a decent terrace and a roof top area. Often, these townhouses come together with a communal pool;
- Single story bungalows: they are a popular option for retired expatriates who choose to move to Cyprus. They usually are bought with a private pool;
- Stone village houses and farmhouses: these are found in the more rural center of the country, and many times they require a renovation. Habitable dwellings which have already been refurbished or require minimal renovation are a bit more expensive, as you might expect;
- Apartments: most developments provide them in different sizes, being purpose-built for the holiday market. They can be bought together with communal facilities such as swimming pools and gardens which have shared maintenance costs. On the downside, this type of properties in Cyprus provide ready-made communities;
- Other types of properties: our attorneys in Cyprus can provide more details on these properties in Cyprus.
According to data here:
- the total value of properties sold in the first quarter of 2022 was 1.3 billion EUR;
- during this time, 5.258 properties were sold;
- Limassol was the city in which most of these properties were sold, accounting for 1,581 with a total value of 573 million EUR
Foreigners purchasing properties in Cyprus
There are no limits on foreign nationals who want to buy a property in Cyprus, but you must request authorization from the Council of Ministers in order to do so.
The majority of applications are often approved, however, the documentation might be laborious. Although you can sign a sales agreement and even fill it with the Land Registry Office, you won’t be able to transfer the title until you have the approval of the Council of Ministers.
To be safe, you might wish to include a condition in your sale contract preserving your interests in the extremely improbable event that you are denied permission to purchase.
Feel free to address our Cypriot lawyers about your options on property acquisition.
Options for foreigners buying real estate
Investing in real estate is one route to obtain residency, which would eventually result in Cyprus citizenship. If a foreigner invests at least EUR 300,000 in a new residential property, one is eligible.
The important thing is that the residential property is new and has never had a previous owner, regardless of whether the foreign buyer is purchasing a single home or multiple properties with this amount of money.
Cyprus is a great property investment destination from various points of view. One of the most important is that through the acquisition of real estate one can apply for citizenship after 5 years of living here.
Do not hesitate to get in touch with our law firm for details on the program under which buying a property in Cyprus leads to permanent residency and then citizenship.
Cyprus as a property investment destination
Cyprus is very offering, so you may choose this country as the ideal place to retire, buy a vacation property, or relocate your business, according to this site. It’s important to make the right choice when purchasing a house abroad.
Paphos, Larnaca, Limassol are only three of the major cities in which foreign citizens reside in Cyprus. With excellent prices and connections with the rest of Europe, buying a property in Cyprus is definitely worth considering for investment.
The Cypriot laws on the protection of private property
Like in all democracies, the right to own property is protected by the Constitution in Cyprus. Article 23 in the Constitution allows each individual to purchase real estate property in Cyprus. The right of holding real estate extends to foreign citizens wanting to live in Cyprus. The right to private property is also protected by the international conventions Cyprus adopted, but also by the Charter of Fundamental Rights of the European Union.
Other general legal frameworks referring to the protection of private property in Cyprus are the Contract Law which regulates transactions that also include property. The Cypriot Civil Code also contains provisions regarding the protection of private property. Moreover, general rules regarding private property are contained by the Wills and Succession Law and the Trustees Act.
If you want to buy a property in Cyprus and need legal assistance you can rely on our attorneys. You can also watch our video on this subject:
Specific legislation for the protection of private property in Cyprus
Cyprus has specific laws that refer specifically to immovable property. The first and most important law for the protection of private property is the Immovable Property Law or Chapter 224. The Cypriot Immovable Property Law contains provisions about the registration, disposition and valuation procedure of immovable property. It also contains provisions about the Cypriot Land Office system that is unique. The Sale of Land Law or Chapter 232 refers to the conditions immovable properties can be sold in Cyprus. The last specific law on the protection of private property in Cyprus is the Acquisition of Immovable Property Law or Chapter 109 which was adopted by the government in order to prevent the exploitation of land. However, foreign entities are not affected by these rules enjoying the same benefits as Cypriot citizens when purchasing a property.
Our lawyers in Cyprus can help you with the due diligence process when buying a property. You can also contact us for details about obtaining Cypriot residency.