Property Market in Cyprus: The Buying Process

The property market in Cyprus has been one of the most sought-after investment destinations for many years. The country offers endless opportunities to invest, but buying a property there is not without its challenges and there are precautions that you need to be aware of before diving into this adventure.

What is the process for purchasing property in Cyprus?

When it comes to acquiring property, there are many rules and procedures that vary from country-to-country. In Cyprus, the most common way of buying a house or flat can be found below: 

The Real Estate Agent

Most people looking to acquire real estate in Cyprus involve a professional agent. However, this is not mandatory and only depends on personal desires of the buyer/seller.

When it comes to real estate in Cyprus, agents are regulated by law and must be licensed. The fee for a license varies between 2-5% percent of the property’s purchase price, with both sides usually paying these expenses.

The help of a lawyer

The process of buying property is a great investment for anyone involved. However, it can be risky if done incorrectly. Fortunately, lawyers know a lot about local laws which will help minimize potential risks during your real estate transaction in Cyprus.

When it comes to real estate, you want the best for your business and yourself. That is why any property acquisition should include a thorough due diligence process that will protect both parties in case something goes wrong!

There are a few things that the lawyer will look for when purchasing property in Cyprus. The first is the title deed, which will be found with DLS records and can verify if an individual owns any claims or mortgages.

When the due diligence on a property has been completed, your lawyer will assist you in negotiating and drafting contracts for purchase. The agreement must be stamped by DLS within two months from signing; otherwise, it cannot take effect as specified under specific performance law.

Cyprus has been a popular destination for those seeking to invest their money in property. The country offers endless opportunities, but buying homes here comes with its challenges and there are precautions that you need to know before diving into this adventure.

Is it possible for foreigners to purchase real estate in Cyprus?

For EU citizens, it is easy to acquire properties in Cyprus without any restrictions. With a view to encourage investments, the government of Cyprus has made it possible for non-EU citizens who do not permanently reside in the country to purchase property. However, you may only own one apartment or house after receiving approval from ministers with their size limited at 4014 sq meters maximal per permit holder.

The transfer process of the title

If the title for the sought property does exist, it will be transferred onto your name upon full settlement of the purchase price. An additional condition is that the vendor has settled all fees, charges or taxes related to owning an immovable property before it is possible to finalize the transfer!

The following are examples of fees, charges, and taxes that may be charged:

-Urban immovable property taxes

-Capital gains taxes

-Immovable property taxes

-Inheritance taxes (in some cases)

The City also requires a certificate of payment for liabilities from the Sewage Board, which is composed of various fees.

For new developments in Cyprus, a developer must complete specific steps before they can issue a title. This is because during and after the project has been completed there are additional regulatory requirements which may take some time. In such cases, the buyer might occupy the property before the title has been transferred.

Is it possible to get financing in Cyprus?

There are many mortgages available for the financing of immovable property. Normally up to 70% may be purchased with this type of loan, and it’s often very easy to qualify for them too!

The bank will investigate the purchaser’s identity, origin of funds used to purchase property and kinds of transactions in which they are likely to engage. This process enables financial institutions to identify unusual or suspicious behavior which may indicate money laundering.

What costs should be considered beforehand?

Stamp duty

If the purchaser does not comply with the stamp duty provisions of the contract, it is responsible for paying stamp duty in the amount stipulated below:

-Up to €5,000: 0%

-From €5,001 – €170,000: 0.15%

-Over €170,000: 0.2%

Transfer fees

The total amount of tax is determined by the value of the purchased property and is generally paid by the purchaser.

-Up to €85,000 of the property value – 3%

-From €85,001 to €170,000 of the property value – 5%

-From €170,001 of the property value – 8%

Immovable property tax

There is no Immovable Property Tax. On January 1, 2017, the tax was terminated.

Capital Gains Tax

The Capital Gains Tax is a tax that applies to the sale of certain types of assets. The rate can go as high at 20%, and it is charged upon profits arising from these disposal transactions.

Most popular places to buy properties

Most of the CoS distribution in 2019 was Limassol at 33.9%, followed by Paphos with 25,4%. The next most popular locations were Nicosia (19,3%), Larnaca (15,1%) and Famagusta 6,3%.

Conclusion: Get to know the process!

When you are looking for a place to call home, it is important that the location is perfect. Luckily, there are many gorgeous properties with amazing views all over this island! But besides the personal preferences, you should look into the requirements and legal process of acquiring a property.