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[
Property
Ownership ] [
Property
Registration/ Transfer Fees ] [
Stamp
Duty ] [
Immovable
Property Tax ] [
Acquiring
the Title Deed ]
[
Residential
Permit ] [
Legal
Safeguards for Foreign Investors
] [ Selling
your Property ] [
Taxation
] [ Estimated
Savings ]
[
Tax
Benefits
] [
Duty
Free Privileges ] [
Simple
Guide ]
[ Check
List ] [
Residence
in Cyprus] [
Immigration Permit
]
Property
Ownership
Compared to many
other countries purchasing property in Cyprus by foreigners is
relatively simple.
Non Cypriots are permitted to purchase (for their personal use)
either:
an
apartment
a house or
a villa on a site
a piece of
land
The maximum allowed area is 4,013 square meters (an equivalent
of 43,195 square feet)
Offshore entities may also acquire property in Cyprus (for their
business purposes and/or for their employees' residential needs.
In certain circumstances a non-Cypriot may be given permission
to own a property that exceeds these dimensions.
Permission to transfer the property bought to the non-Cypriot's
name must be sought from the Cyprus Council of Ministers.
However this is granted more or less as a matter of course to
all bona fide purchasers.
In the meantime, purchasers may take possession of the property
without restriction. The application to the Council of Ministers
to acquire immovable property in Cyprus can be made within a
reasonable time after signing the contract of sale.
Property Registration/Transfer Fees
Real Estate Transfer tax-fees are necessary in order to transfer
FREEHOLD ownership to the name of the purchaser. This can be
done as soon as the relevant Government Authority has issued the
title deed and the purchase has been completed. The Transferee
is responsible for the tax payment. The rates are on a graduated
scale:
|
Value
of property in Cyprus Pounds |
Transfer fee rate
( %) |
|
Up to
50,000 |
3 |
|
From
50,000-100,000 |
5 |
|
Over
100,000 |
8 |
For
Example, if the purchase price is CY£
90,000:
|
|
Value |
Transfer Fee Rate |
Transfer Fee |
|
The
First |
CY£
50,000 |
3 % |
CY£
1,500 |
|
The
Next |
CY£
40,000 |
5 % |
CY£
2,000 |
|
|
|
|
Total:
CY£ 3,500 |
Should the
purchase be made in joint names (i.e. husband and wife, and
provided that the total purchase price is more than 50,000 CyP)
the calculation for the total transfer fee is as follows:
For
Example, if the purchase price is CY£
90,000:
|
|
Value |
Transfer Fee Rate |
Transfer Fee |
|
The
First |
CY£
45,000 |
3 % |
CY£
1,350 |
|
The
Next |
CY£
45,000 |
3 % |
CY£
1,350 |
|
|
|
|
Total:
CY£ 2,700 |
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Stamp Duty
Due at the time of signing the contract, stamp duty is levied at
the rate of C£1.50 per C£1,000 up to the value of CY£
100,000, and above that the rate is C£2.00 per C£1,000.
For Example, if the value (or purchase price) is CY£
150,000:
|
|
Value |
Stamp Duty
(% per
CY£1000) |
Stamp
Duty Cost |
|
The
First |
CY£
100,000 |
1.5% |
CY£
150 |
|
The
Next |
CY£
50,000 |
2.0% |
CY£
100 |
|
|
|
|
Total:
CY£ 250 |
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Immovable Property Tax
The annual
immovable property ownership tax is based upon the value of the
property. Certain immovable types of property are exempt.
|
Value of Property (in Cyprus Pounds) |
Annual Property Tax (rate per thousand) |
|
Up to
100,000 |
exempt |
|
100,001 to 250,000 |
2.0 |
|
250,001 to 500,000 |
3.0 |
|
Over
500,000 |
3.5 |
IMPORTANT: Immovable property tax is based upon the value of
the property in 1980 which is much lower than the current market
value. So there is no immovable property tax for the majority of
properties in Cyprus.
Local Authority Taxes and rates
Estimate roughly something between CY£ 50-150 per year
depending on the size of your property. This tax is for garbage
collection, street lighting, sewerage, etc...
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Acquiring the Title Deed
Transfer of ownership from vendor to purchaser is undertaken by
a simple procedure through the Cyprus Land Registry Office,
either by the buyer in person or by appointing a third party
(i.e. a Licensed Estate Agent ) with a Power of Attorney.
In the case of the non-Cypriot, a prerequisite of registration
is evidence that the property has been paid for with foreign
exchange.
When one buys a piece of land or a house, the seller as a rule
must have a title-deed in his own name which can be transferred
to the purchaser. However, if one buys a flat, especially one
still under construction, there is no title-deed in existence
for the flat and sometimes the seller does not have a title-deed
even for the land on which the building is being built because
it may still be in the name of the original owner from whom the
developer has purchased the property and to whom he stills owes
money. These are matters which the purchaser's lawyer must
consider and embody in the contract, as well as take such other
steps as may be necessary so as to safeguard the interests of
the purchaser.
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Residential Permit
Residential Permit is easily obtained for persons living in
Cyprus, who have purchased property
Temporary Permit: The granting of this permit
requires the existence of a bank account in Cyprus and a sales
agreement of the property purchased. Temporary residence status
can be from one to four years.
Permanent Permit: In addition to the above
requirements, the applicant must establish evidence of a secured
annual income of not less than CYP5 300 (five thousand three
hundred Cyprus pounds) for a couple.
Non-Cypriots wishing to reside permanently in Cyprus must apply
to the Committee of Aliens Control. To obtain residence
permission a Non-Cypriot should fall in the following
categories:
CATEGORY A: In this category are included people who are
interested to open an offshore office in Cyprus.
CATEGORY B: In this category are included self-employed
foreigners who are interested to open their own business in
Cyprus on the condition that their operations will not have
negative impact on the economy of Cyprus. Additionally the
minimum capital required is CY£150.000
CATEGORY C: In this category are included Non-Cypriots
who are interested to be employed in Cyprus by a Cypriot
employer. Permission is granted on the condition that their
employment will not lead to an increase in the local
unemployment in the profession they will practice.
CATEGORY D: In this category are included foreigners not
employed in Cyprus however would like to reside permanently in
Cyprus. Permission will be granted on the condition that they
have received from abroad and is no less than CY£3.800.
Non-Cypriots wishing to take up employment in Cyprus are
required to have a permit under the Aliens and Immigration Law.
Temporary residence is easy to obtain once the applicant fulfils
certain requirements. To apply for temporary residence a visit
to the local immigration office should be arranged and produce
the following documents
|
• A certificate from a local bank stating that the applicant
is a holder of an external account at that bank and stating
the balance of the account. Obviously, the larger the
balance, the more favorably the applicant will be seen
• Passport
• 3 photos
• CY£ 20,00
• Copy of Rental Agreement or Sales Contract
|
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Legal Safeguards for Foreign Investors
Contrary to the risks inherent in the purchase of property in
some countries, Cyprus has never been involved in the
nationalization of any sector of the economy, nor in the
expropriation of property owned by foreigners. Indeed the
Republic has often guaranteed foreign investments jointly and
severally with local participants - consistent with its efforts
to create a favorable climate for such investments.
Selling your Property
You can sell
the property at any time and with no restrictions. However there
are two different cases:
a) If the property is sold to a non-Cypriot who is paying
from external funds, then the whole amount can be repatriated
without any requirements.
b) If the property is sold to a Cypriot, who is paying in
Cyprus pounds then the seller is entitled to repatriate an
amount equal to: a) what he paid to buy the property, b) plus
any other (proved) costs involved with additions or extensions
of the property, c) plus the transfer fees, d) plus the
inflation, e) plus CY£ 50,000 (fifty thousand pounds) per person
per year.
Taxation
There are substantial tax advantages for U.K. citizens
retiring to Cyprus.
The U.K./Cyprus double taxation treaty, which is unique
in this respect enables United Kingdom pensioners to remit both
government as well as private sector occupational pensions to
Cyprus free of withholding taxes in the United Kingdom.
In practically all other United Kingdom double taxation treaties
government pensions are almost always subject to withholding
taxes at source. Hence the relief offered to British government
pensioners resident in Cyprus is unique to Cyprus and generally
not available elsewhere under the terms of other U.K. double
taxation treaties.
Similarly foreign retirees living in Cyprus are taxed at only
1/10th of the local rate, foreign retirees pay income tax at the
rate of 5% per annum on all imported pensions, with an annual
exemption of the first Cyprus Pounds 2,000.
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Estimated Savings
|
Assume United Kingdom pension of UK£ 20.000 per annum
United Kingdom withholding taxes would therefore be
£5.000
The above pension remitted to Cyprus income tax in Cyprus
would be only £875
|
|
Gross saving in
respect of United Kingdom income tax £4,125 |
Tax Benefits
The United Kingdom also maintains a reciprocal agreement with
Cyprus in respect of National Insurance pensions benefits which
in the hands of foreign retirees living in Cyprus remain index
linked.
Cyprus levies taxation only on a remittance basis, that is, it
taxes only assets that are brought into Cyprus, rather than the
more punitive system of taxation on world-arising income that is
practiced in may other countries including the U.K. and U.S.A.
as well as Spain and Portugal. Residents of Cyprus can thus
legally hold assets tax free in banks in tax havens such as the
Isle of Man and Jersey, and suffer no taxation on bank interest
or dividend income remaining outside Cyprus. No capital gains
tax is charged on the remittance of capital assets to Cyprus
such as money needed for the purchase of property and other
similar capital assets such as motor vehicles.
Increasingly, Cyprus is used as a residential base for former
residents of the U.K. Who wish to restructure their personal
assets in a favourable tax jurisdiction, where U.K. capital
gains tax and income tax exposure can be effectively and legally
minimized. The potential tax advantages for retirees are thus
truly substantial and the use of Cyprus as a fiscal base for
retirees of all nationalities should not be ignored.
Duty Free
Privileges
A duty free car is one example of the privileges available
to persons retiring to this lovely Island. A medium size saloon
car will cost just over half the U.K. price.
Personal effects, household goods and furniture can be imported
free of any taxes by immigrant retirees provided they are for
personal use and have been used for a while.
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SIMPLE GUIDE TO PURCHASING PROPERTY IN CYPRUS
Our Company will
guide you through purchasing a property in Cyprus both legally
and effectively.
1.
You will sign a Contract with the company that owns the property
you have chosen.
2. The Contract then needs to be stamped. This costs £1.50 per
£1000 of the Contract value. When the Contract has been
stamped, it will be deposited at the Land Registry within one
month. This process secures the Purchasers rights.
3. As a foreign investor you have to provide proof of
importation of foreign currency for the purchase to the (Cyprus)
Central Bank. (Providing this will enable the future
exportation of the funds) This proof may be obtained in two
ways. Firstly, if importing cash, this should be declared at
the airport or secondly, the funds may be transmitted through
normal banking channels into the Company's account.
4. Once the monies have been imported, approval will be obtained
from the Central Bank. This approval will also be required by
the Land Registry prior to the Title Deed of the chosen property
being registered in your name.
5. If the property is sold in the future, imported funds can
then be exported in total plus any profit to the value of
£10,000 per annum.
6. An application will need to be made to the Council of
Ministers for permission to own property in Cyprus. Transfer of
ownership (Title Deed) cannot take place until this is
received. This application will require details of the property
and the personal and financial status of each applicant. This
permit usually takes approximately six (6) months to complete so
it is advisable that the application is made in good time.
7. When the permit is received from the Council of Ministers and
assuming the Title Deeds are issued (in the case of new
property) then the transfer can take place. Transfer fee rates
are quoted on this Web page under TAXES/FEES (above)
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CHECK LIST
REQUIREMENTS AND STEPS TO BE TAKEN BY AN ALIEN ACQUIRING
IMMOVABLE PROPERTY IN THE REPUBLIC OF CYPRUS
-
Obtain
reliable and expert local advice.
-
Before
entering into a contract carry out a search at the District
Lands Office to check whether there is already a title-deed in
the name of the seller in respect of the property to be
purchased or, if not, whether the issue of such a title-deed
is legally feasible, as well as, in either case, whether the
property is encumbered in any way or not.
-
If the
property to be purchased is a piece of land, check
a) whether it has a road access (without it, building
is not possible)
b) if the land is included in any zone or area where
building is restricted and , if so, to what extent it is
restricted:
c) whether it is subject to any street widening scheme;
d) whether the supply of water and electricity is
possible and at what expense.
-
If the
property to be purchased is a house or a flat, check whether
there is a building permit and, if completed, whether a
certificate of approval for the building has been obtained
from the appropriate authority.
-
In any
case, check the possibilities and eventual availability of a
telephone connection.
-
Do not
enter into a contract before being assured by the lawyer that
the case is one in which the relevant permissions from the
authorities would, as a rule, be granted.
-
When
entering into a contract, check that there are ample and
proper provisions ensuring
a) the eventual transfer of the property and the issue
of a title-deed free from any encumbrances;
b) that the contract is subject to obtaining the
relevant permissions from the authorities (this is presumed in
law but it is advisable to refer specifically to it, inserting
provisions for the return of money paid if permission is not
obtained);
c) that possession is delivered to the purchaser upon
execution of the contract if the building is completed and, if
not completed, upon completion;
d) that in the case of a flat, there are general
conditions attached to the contract applicable to and binding
on all other purchasers and users of flats or shops in the
building, regulating their respective rights and obligations.
-
Ensure
that the contract is signed by the seller in the presence of
two witnesses, themselves competent to contract, who have
signed as attesting witnesses.
-
If the
seller is a company, ensure that all corporate actions have
been properly taken for the valid execution of the contract.
-
If the
seller is a person under legal disability or if a person signs
in a representative capacity on behalf of the seller, check
the proper authority and legal ability of the person signing
on behalf of the seller.
-
As soon
as practicable after the execution of the contract ensure
that:
a) an application is made in the proper form for
obtaining the permission of the Council of Ministers;
b) an application is made to the Central Bank of Cyprus
for an exchange control permit, unless the purchaser, though
an alien, is a resident for exchange control purposes and the
seller is also a resident;
c) a copy of the contract is deposited with the
District Lands Office within two months of its execution, thus
ensuring that the contract becomes a charge on the property
and that it may be specifically performed.
-
As soon
as practicable after the permission under 11(a) and (b) above
has been obtained, ensure the earliest possible transfer of
the title-deed though the District Lands Office, and if a
separate title-deed has not yet been issued ensure with the
seller that this is done as quickly as possible. In the case
of any breach in the contract ensure that legal action is
brought within six months from the date of the breach after
written notice.
All the above matters should, of course, be looked after by the
lawyer of the purchaser, but their enumeration and their
following up by the purchaser himself is advisable and useful.
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GENERAL
INFORMATION REGARDING ENTRY & STAY of ALIENS in CYPRUS
Visitor
Aliens may
enter Cyprus for a maximum period of 3 months provided they
possess valid national passports, return tickets to their
country of domicile and they are in possession of sufficient
funds for their maintenance during their stay in Cyprus.
The date of expiry of a visitor's permit in Cyprus is normally
stamped on the visitor's passport and visitors wishing to extend
their stay in Cyprus are advised to apply through the Aliens
Office of the District in which they reside. This should be
done at least two weeks before the expiration of their permit
and the application should be submitted on the prescribed form.
Employment in Cyprus
Applications for employment should be submitted not by the
person(s) concerned but by their prospective employers in Cyprus
to the Migration Department, Nicosia. Applications should be
submitted by the employers in Cyprus on the appropriate forms.
The latter are available from the Aliens Office of the District
of residence of the employer who should submit them together
with a covering letter and a copy of the offer of employment.
Entertainment of an application largely rests on its
contribution to the general economy of the island and its
non-competition with the local people. Each application is
treated on its own merits and no general rules for its approval
may be given in advance. Applications usually take 2 to 4 weeks
plus to be considered and the result in communicated to the
employer in Cyprus. Persons wishing to travel to Cyprus solely
for the purpose of employment are advised to ensure that an
employment permit has been secured beforehand.
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Permanent residence in Cyprus
Permanent
residence refers to residence of many years and possibly for
good. Certificates of permanent residence granted to aliens are
valid for an indefinite period and their holders are exempted
from the necessity of obtaining visas when entering Cyprus. The
alien in question must take up residence in Cyprus within one
year from the date of issue of the Immigration Permit.
Immigration Permits are classified under 5 categories
Applications should be accompanied by all relevant
documents regarding applicant's financial standing.
Applications are made on the appropriate form(s) and submitted
to the Migration Department, Ministry of the Interior, Nicosia,
Cyprus, for consideration.
Applications under Category F are usually made by persons who
wish to retire to the Island
Applicants under this category should be of independent
means of support and documentary proof of their income (from
Banks, Pension Funds etc) should be submitted together with
their applications.
Category
'A'
Farming
Category 'B' Mining
Category 'C' Trade and Business
Category 'D' Self-employment
Category 'E' Cyprus employer work
Category 'F'
Applicants of Independent Means:
This category is for persons who have a
secured annual income, high enough to give
them a decent living in Cyprus without
having to engage in any business, trade or
profession. Most applicants come under
this category, the majority being pensioners
or retired persons. The annual income
required depends on family size, as shown
below, but the Immigration Control Board
may demand additional amounts.
APPLICANT
ANNUAL INCOME
Single
Applicant
£3,800 CYP
Applicant and 1
Dependant £5,675 CYP
Applicant and 2
Dependants £7,550 CYP
Applicant and 3
Dependants £9,425 CYP
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APPLICATION
FOR IMMIGRATION PERMIT
UNDER
ANY OF THE CATEGORIES A to F (SPRING 2002)
I hereby
apply for a certificate under Category .............
A, B, C, D, E or F ............. Particulars are as
follows:-
1.
Full names of applicant
2. Address
3. Sex
4. Profession / Occupation
5. Married / Single
6. Place and date of birth
7. Religion
8. Nationality (at birth)
9. Present nationality or national status
10. Maiden name (if applicant a married woman)
11. Change of name by deed poll or otherwise
12. Particulars of passport held: Passport No.
............................................ issued
at......................................... on
....................................................................
valid until
..........................................................and
bearing visa for Cyprus No. ........................ or
endorsement granted by ........................... on
..................................
13. Particulars of persons dependent on and accompanying the
applicant:
|
Name (including maiden names of married, widowed or
divorced women) |
Age |
Sex |
Nationality |
Condition (single, married, widowed or divorced) |
Relationship |
|
14.
Particulars of persons dependent on and not accompanying
the applicant:
|
Name
(including maiden names of married, widowed or divorced
women) |
Age |
Sex |
Nationality |
Condition (single, married, widowed or divorced) |
Relationship |
15.
Particulars of previous residence in Cyprus (if any) by
applicant giving places of such residence and dates in full
16. Category A (Agriculture or Animal Husbandry)
Business proposed to be undertaken in Cyprus
17. Interest in land in the Island acquired / for the
acquisition of which permission has been obtained.
18. Capital sum held in applicant's own right and at his full
and free disposition and where situated.
(Documentary proof to be attached)
19.
Category B (Mining)
Type of mining in which applicant intends to engage in
Cyprus
20. Particulars as to prospecting right or license in possession
of / obtainable by the applicant.
21. Capital sum held in applicant's own right and at his full
and free disposition and where situated.
(Documentary proof to be attached)
22.
Category C (Trade or Business)
Trade or business which applicant intends to carry on
in Cyprus.
23. Particulars as to license (if license is necessary for
carrying on the trade or business) in possession of /
obtainable by the applicant.
24. Capital sum held in applicant's own right and at his full
and free disposition and where situated.
(Documentary proof to be attached)
25.
Category D (Academic Professions)
Qualifications of applicant
26. Capital or assured income of which applicant is in
possession and where situated.
(Documentary proof to be attached)
27.
Category E (Employment)
Nature of employment (not being temporary employment)
which the applicant has accepted in Cyprus.
(Documentary proof to be attached)
28. Particulars of qualifications.
29. Name and address of employer.
30.
CATEGORY F (Applicants of Independent Means)
Particulars of income and source from which derived.
(Documentary proof to be attached)
Date and
signature
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