Buying Guide

Sweet Home Estates offers this information as a courtesy to inform and provide general information about property investment in Cyprus.

A key factor in making the right choice is to be able to rely on a well-established licensed real estate company with reputation. We also believe that the best client is an informed client, and for this purpose a Buying Guide has been published.

Purchasing a property in Cyprus is a straightforward process.

PROPERTY SELECTION

With our wide selection of properties and proven experience in the market, we ensure to offer you the best options to turn your dreams into reality.

RESERVATION

A deposit of 5% (minimum of €5,000) will reserve your property for about 4 weeks.
Terms of Payments: Upon signing contract of sale a minimum 30% payment is required. The rest 70% will be payable on exchange/delivery for ready properties. For off-plan properties stage payments apply.

LOAN FACILITIES

Mortgage facilities with various banking institutions in Cyprus, either in Euro or any other currency, is available with at least 40% initial contribution and low interest rates. Our sales team assists the buyer during the whole process of obtaining a loan.

LEGAL COST

Although not mandatory, it is strongly recommended to seek an independent lawyer advice for your property purchase. The buyer’s lawyer will carry out due diligence for the property and search at the Land Registry Office, due diligence for the company (seller), Sales Contracts drafting, negotiation and execution, Application to the Tax Authorities in order to be approved for a reduced 5% VAT, and generally supervise the process of sale until completion.

Legal fees vary according to the price of the property, but the fees of an experienced property solicitor are usually about 1%. An additional fee is charged in the case of application to obtain Permanent Residence Status.

CONTRACT OF SALE

The legal system in Cyprus is based on the British system. When purchasing a property, the contract you sign is a private agreement between you and the seller. All contracts of sale are in English, but we can provide with official translation in any language that you require.

FILING THE CONTRACT OF SALE TO THE LAND REGISTRY DEPARTMENT

Once the Contract of Sale is duly signed and stamped, your lawyer files a certified copy of the Contract at the Land Registry Office to secure the transfer of the acquired property into your name. After registration, buyers can legally sell the property (through an Assignment Agreement) even prior to the issuance of separate title deeds in their name.

SPECIFIC PERFORMANCE LAW

Safeguards a purchaser of a property from transaction between a seller and a purchaser, especially when the purchaser is not allowed to immediately transfer the acquired property into his / her name (until the issue of the title deed which takes normally 3-5 years). Filing a copy of the contract to the Land Regis- try gives the purchaser, according to the above law, the right to seek ‘specific performance’ of the terms and conditions of the contract and thus to register the property into the purchaser’s name. The contract of sale deposited with the Land Registry cannot be withdraw unless you give your written consent. The Cyprus Department of Land and Surveys established in 1858 and is one of the most effective and efficient land registry systems in the world. Therefore, purchasing a property in Cyprus is a very straightforward procedure.

STAMP DUTY

After the contract of sale is signed, the purchaser is liable for the payment of stamp duty. The contract stamp duty fees are 0.15% for values up to €170.860 and 0.2% for values thereafter. Payment is due within 30 days the signing the contract of sale.

TRANSFER FEES

Upon transfer of the property and registration in the purchaser's name, the district Land Registry Office will charge transfer fees, which are based on the market value of the property at the time of the purchase and are calculated as follows:

For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied on the amount shown above.

Transfer Fees Calculator: https://portal.dls.moi.gov.cy/en-us/Pages/CalculateTransferFees.aspx

VAT PAYABLE ON PROPERTY

All newly built properties are subject to VAT rate of 19%. For purchasers that buy their first/primary house in Cyprus a reduce rate of 5% applies. For resale properties and land VAT is exempt.

ANNUAL PROPERTY TAXES AND FEES

• REFUSE COLLECTION FEE
  Local Authorities charge €100 - €200 per annum for service provided such as refuse collection, street lighting and relevant community services. The fee depends on the size of the property and the municipality which normally charge less for an apartment and more for a house. The fees are payable to the local Municipality Authority.
• MUNICIPALITY PROPERTY TAX
  The registered owner of a property is liable to an annual Municipality Tax calculated on the market value of the property as at 1st January 2018. The rate is 0.1% - 0.2%. Municipality tax is payable to the local Municipality Authority. For example, for a 3-bed house the Municipality tax valued today at €300.000 will be about €150 per annum.
• SEWERAGE TAX
  The registered owner of a property is liable to an annual Sewerage Tax calculated on the market value of the property as at 1st of January 2018. The rates vary from 0.04% - 0.3%. Sewerage Taxes are payable annually to the local Sewerage Board of the community. For example, for a 3-bed house the Municipality tax valued today at €300.000 will be about €250 per annum.
• CAPITAL GAINS TAX
  A capital gains tax of 20% is imposed on the profit gained from the property disposal.
• IMMOVABLE PROPERTY TAX
  No immovable property tax. Abolished as of the 1st of January 2017.
• INHERITANCE TAX
  No inheritance tax applies as the estate duty was abolished in 2001.

* Sweet Home Estates does not have any responsibility for any of the above information. Please note that the content of this document is meant to provide a general guideline only and does not constitute legal advice.