Residential Permit

Residential Permit can be easily obtained for persons living in Cyprus , who have purchased property.

Temporary Permit
In order to obtain this permit one needs to have 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 have evidence of a secured annual income of not less than CYP £5.600 per person plus CYP £2.700 for each dependent person. For further information you can apply to the Ministry of Interior, Nicosia .

Property Ownership

The process of purchasing property in Cyprus by foreigners is as simple as it gets.

Non-Europeans are entitled to a freehold ownership of a villa, an apartment or a piece of land, with maximum allowed extend of 4014 sq.meters (four thousand and fourteen square meters).

Europeans are entitled to a freehold ownership of a villa or an apartment. The above restriction, in respect of Europeans, will hopefully soon be abolished because Cyprus entered the EU. It is very possible that such a change in the legal system will increase demand of real estate sharply with the related reflection on property prices. In respect of plots of land, Europeans can purchase as many and for any extent. This was one of the changes which took place because of the entry of Cyprus to the EU.

Foreign companies can acquire premises for their business or for holiday home for their directors.

Europeans who acquire permanent or temporary permit can register in their name as many properties as they want provided that they sign a confirmation to the government that they will stay for the next five years in Cyprus .

Properties in Cyprus are on average 20% - 30% lowe r in prices than Portugal , 30% - 40% lower than Spain and 50% - 60% lower than Italy and France .

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 with a Power of Attorney.

The transfer of ownership requires a permit from the Council of Ministers.

Real Estate Transfer

Real Estate Transfer tax-fees are necessary in order to transfer FREEHOLD ownership to the name of the purchaser. The transfer fees will be paid when the transfer of the title deed in the name of the purchaser will take place. The Purchaser is responsible for the tax payment. The rates are on a graduated scale.

If the property is in joint names e.g. of a couple (husband and wife) or two individuals, then the purchase value is divided into two parts thus transfer fees are lower.

The following example clearly shows this

For property purchased for CYP 70.000 in one name, the fees payable are CYP 2.500.

For property purchased for CYP 70.000 in the names of two persons, the fees payable are CYP 2.100.

Property Taxes, Fees, Rates

Immovable Property Tax

The annual immovable property tax is calculated on the market value of the property as at 1st January 1980.

Capital Gains Tax
On disposal of the property, capital gains tax will be payable at the rate of 20% on the gain with the first CYP10.000 being exempt for each person. The gains are the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980.

On top of this allowance, the seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a dwelling house are exempt up to CYP 50.000 in total if the owner resides in it continuously for at least five years prior to disposal.

Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of 1.50 CY Pounds per thousand up to the value of 100.000 CY Pounds and thereafter at the rate of 2 CY Pounds per thousand.

This should be paid within 30 days of signing the contract.

For example if the purchase price is CYP 150. 000

Estate Duty
Estate Duty tax has been abolished as from the first of January 2000
(Statute No.78(1)/2000).

Local Authority Taxes & Rates
A rough guide could be approximately CYP 50 -150 per year depending on the size of your property.

This tax is for refuse collection, street lighting, sewerage, etc.

The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

VAT & Tax Advantages

VAT

Since 1/5/04 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%.

Tax Advantages

Cyprus is unique when it comes to the taxation aspects of living on the island.

The following income tax rates apply to individuals:

Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of 5% per annum while an exception for the first £2.000 is granted.

Additionally, Cyprus has Double Taxation treaties with many European and other countries, safe-guarding its residents from paying tax in both countries. This gives the option to the citizens of those countries to take advantage of the very low rate in Cyprus .

Double Taxation Agreements

Cyprus has double-taxation agreements with Austria, Bulgaria, Canada the People's Republic of China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, (Armenia, Belarus, Kurdistan, Moldova, Tajikistan, Turkmenistan and Ukraine) Slovakia, South Africa, Sweden, Syria, the United Kingdom, the United States, Yugoslavia (Serbia and Montenegro) and other countries.

The main purpose of these treaties is the avoidance of double taxation of income earned in any of the above countries. A credit is usually allowed against the tax levied by the country of the tax payer's residence for taxes levied in the other country.

Duty Free Privileges

Europeans who become permanent residents in Cyprus and were using in their country a car for at least six months, can bring their car to Cyprus and they will not pay import tax.

Furniture can be imported free of any taxes by Europeans or Non-Europeans who become permanent residents provided that they are for personal use and are not brand new.