3pl ~ news

Everything You Need To Know About Buying a Home in Cyprus
Cyprus has proved to be an increasingly popular place for retirement and/or for the acquisition of holiday houses by foreigners. Demand, which is continually increasing, has been driven upwards mainly from the European Countries, with the bulk (70%) comprising of UK citizens.
With Cyprus now a member of the EU, most of the procedural restrictions on property purchased by EU members will eventually be lifted, after April 2009. Until then, EU and non-EU citizens are entitled to free hold ownership of one property or piece of land up to 4,000 square meters. As the law stands now, EU nationals who live or work in Cyprus still need a permit to own any kind of immovable property. EU nationals who do not live or work in Cyprus need a permit to own a house or apartment, but they do not need a permit to own land.
The upsurge in demand for property by foreigners is attributed to many factors, including the relatively low cost of living and the high quality of lifestyle available. In addition, the unique hospitality of the local population, the attractive climate, the increasingly important role of safety (Cyprus is one of the safest countries in Europe with crime at a very low level) and security, have all played an important role.
Demand and market activity has caused local property values to show a steady and at times sharp appreciation, but this trend has now a slower pace. Good properties, especially re-sales, are still abundant, and local property prices are still much lower than those of other European countries.
Prices of holiday homes in Cyprus are on average 20% lower than in Portugal, 30% lower than in Spain and 50% lower than in Italy and France.

Buying Property as an Investment.
Local property values have shown a steady upward movement over the years and property, especially beach front property, has shown a considerable appreciation. Relative to equivalent property found in other Mediterranean and Southern European countries local property is believed to offer good value for money and the island’s increasing popularity by the international market further supports this.
As a general rule we could say that property income returns are in the region of 6% per annum on current values. In addition, the annual appreciation on real estate values are in the region of 10%-15% per year.

Legal Safeguards.
The legal system is Cyprus is largely based on the British equivalent and safeguards the purchaser’s rights in many ways. For the purchaser’s protection, once the sales agreement has been signed and a deposit paid, the Land Registry in Cyprus provides a simple and effective legal instrument called the “Specific Performance”. This procedure protects the purchaser’s owner ship rights until the title deeds are issued and transferred to their name. The contract in the hands of the Land Registry cannot be withdrawn by anyone; and therefore the property cannot be leased, sold, transferred or mortgaged. This status can only be altered by the purchaser himself.

Stamp Duty.
A one-off stamp duty is levied on the purchase of property in Cyprus. The rates are dependent on the contractual purchase amounts and payment is due within 30 days of signing the Sale Agreement. The amount is payable by the purchaser to the tax authorities.
Purchase Price in CYP Stamp Duty in %
Up to 100,000\\\\t\\\\t- 0.15
Over 100,000\\\\t\\\\t- 0.20

Transfer Fees.
The purchaser will be liable to pay the following transfer fees for the property acquired, when this is registered in his/her name at the Land Registry Office. The fees are charged on the property’s market value at the date of purchase. Property Value in CYP Transfer Fee (% on property value)
Up to 50,000\\\\t\\\\t- 3
50,001 - 100,000\\\\t- 5
Over 100,000\\\\t\\\\t- 8

Immovable Property Tax.
The registered owner is liable for this annual tax which is based on the value of his/her property as of 1 st January, 1980. Property with a value of up to CYP 100,000 is exempt from property tax. For property values exceeding this amount the rates are:

Taxable Value CYP Annual Tax (% on Taxable Value).
The stated rates for the Immovable Property tax are applicable only after seperate title deeds are transferred onto the names of the contractural purchasers through the Lands Department, and not before. The registered owner of the land reserves all rights.
Up to 100,000 \\\\t- Nil
100,001 -250,000 \\\\t- 0.25%
250,001 - 500,000 \\\\t- 0.35%
Over 500,000 \\\\t\\\\t- 0.40%

Capital Gains Tax.
Capital Gains Tax is levied at 20% on gains arising from the disposal of the property, however, for foreign owned property that is sold. The first £10,000- £50,000 in a private residence sale is exempt and there is also an indexation allowance. However, there is no tax to pay if the property was acquired between 1 August 1980 and 13 July 1990 with foreign currency imported into Cyprus.

Inheritance Tax.
Inheritance Tax has been abolished with effect 1 January 2000, and is no longer imposed.

Local Authority Tax.
Property taxes levied by the local authorities are in the range of CYP 30 - 100 per
annum, depending on the size of the property. The tax covers the cost of garbage disposal, street lighting, etc.

Communal Expenses.
Communal expenses cover an owner’s share towards the cost of cleaning and maintaining a project’s communal areas, gardens, swimming pool, management fees and repairs.
These are payable at fixed intervals through out the year and vary from development to development and from property to property.

Allowances.
The following allowances are available to individuals:
The first CYP 10.000 of gains arising from the disposal of any property.
The first CYP 50.000 of gains arising from the disposal of a house used by the owner for his/her own habitation.
An individual claiming a combination of the above allowances in only allowed a maximum allowance of CYP 50.000. Cyprus residents and companies registered in Cyprus are subject to Capital Gains Tax when disposing of their property, wherever it is,
Non-residents are only taxed when selling property situated in Cyprus. They can be to tally exempt from this tax if they can prove that they acquired the property in question by importing foreign currency between 1 August 1980 and 13 July 1990.