Carry on with the steps
Purchase a property in Cyprus
The procedure for buying a property in Cyprus is similar to that in the United Kingdom, with a few nuances to be aware of. Like a result, just as you would in the UK when buying a property, you must retain the services of a renowned, independent solicitor.
- Permission to purchase a property must be obtained through a written application to the Council of Ministers. For British nationals, this authority is granted as a matter of course. If you buy a new home from a developer, they will usually apply for clearance on your behalf if you ask.
- It is customary to pay a deposit (up to roughly €2,500) when you find a property you want to purchase. After then, a contract is drawn up. When the buyer signs it, he or she pays a 10% deposit on the agreed-upon price, or 21-30% in the event of a new build property.
- Your legal representative should complete the transfer of ownership on your behalf. In order for new properties to be legally permitted for habitation, the authorities must conduct an independent inspection, after which a Final Completion Certificate is provided. Only when this is completed can the property’s title deeds be issued, and it is strongly advised that you keep the title deeds for the property yourself.
Take care of the property’s expenses, fees, and taxes
When buying property in Cyprus, a number of fees and taxes must be paid. These typically equal to 6 to 7% of the purchase price and include the following:
On the purchase of a new or resale property, transfer costs are 3% on the first €60,000, 5% on €60,000-€120,000, and 8% on amounts over that.
- Up to the value of €120,000, stamp duty is 0.15 percent of the purchase price, then 0.20 percent for every extra €1,200.
- Only new construction properties are subject to VAT (at a rate of 15%).
- The application fee to the Council of Ministers is €180.
- Allow 1% of the purchase price for legal fees.
- Fee for a surveyor (optional)
- The cost of a mortgage (if applicable)
- Costs of foreign exchange (if applicable)
Get a mortgage to help you buy a property in Cyprus
Buyers who require financing can choose between remortgaging their UK home and releasing equity, or establishing a mortgage on the Cyprus property. Remortgaging is frequently the preferred approach for buyers because releasing equity in a UK property allows for the purchase of a second house for cash, essentially eliminating the requirement for a second mortgage. Remortgaging may not be a feasible or practical choice for everyone in Cyprus, however, due to growing property prices:
- Euro mortgages are now accessible on the island of Cyprus, which has completely adopted the European currency. Many purchasers, particularly those who live on the island and receive their UK pension in local currency, will find a euro mortgage appealing.
You must pay taxes
Cyprus has a tax system that is comparable to that of the United Kingdom. The two nations have a double taxation agreement, which means that tax is paid in one of the two countries, not both, and usually in the country with the higher rate.
- Non-residents’ personal taxation
- Non-residents are only taxed on their income earned in Cyprus. This includes rental income, which is subject to progressive property rates of up to 30% depending on the amount. Depending on the conditions, non-residents may be subject to capital gains tax (CGT) on the profit from the sale of a property. The gain on property sales is subject to CGT at a rate of 20%, with the first €12,000 of the gain being excluded. Those who purchased property before January 1, 1980 are also free from paying capital gains tax.
- There is no gift tax or inheritance tax in Cyprus, for both non-residents and residents.
- Residents – A foreign individual who stays in Cyprus for more than 183 days during a tax year (1 January to 31 December) is deemed a resident for tax purposes. It is not necessary for the 183 days to be consecutive.
- On international income, residents of Cyprus are subject to progressive taxation.
- Amounts up to €12,000 are tax-free. Income between €12,000 and €24,000 is taxed at rates ranging from 20% to 25%. On earnings of more than €24,000, the highest rate is 30%.
- Other taxes apply to residents of Cyprus, including a payment for ‘passive’ income, such as rental income. Most commodities are subject to a 15% VAT rate; however, some products, mostly food and agricultural products, are subject to a reduced rate of 5% VAT.
- Local taxes – Depending on the value of the property, the annual Immovable Property Ownership Tax ranges from €60 to €180 sterling. Municipal authorities may also levy an annual tax of €24-€36, as well as a sewage tax of €24-€48. Tax advantages Personal things, such as household goods and furniture, are allowed to be imported by immigrant retirees if they are for personal use and have been used (i.e. are not brand new). Furthermore, no duty is levied on the importation of an automobile, and immigrants over the age of 65 are exempt from paying duty on two cars.
Be aware of the monetary system
On January 1, 2008, Cyprus adopted the Euro as its official currency, bringing it in step with the rest of Europe and making Euro mortgages the norm on the island.
- In bigger cities and tourist resorts, banks, bureaux de change, and ATMs are available. Monday through Friday, 8:30 a.m. to 12:30 p.m., as well as 3:15 p.m. to 4:45 p.m. on Mondays.
- Major credit cards, as well as travelers’ checks, are generally accepted. To avoid further currency rate charges, it is best to carry the latter in pounds sterling or US dollars.
Obtain all required passports, visas, and residency permits
- Passports and visas – British citizens must have a passport that is valid for the duration of their stay in Cyprus. It is not necessary to obtain a visa.
- Residency – EU residents (including British nationals) are not required to have a residence permit in Cyprus. They can, however, be used as formal proof of residence in some instances (for example, when applying for a driver’s license or for tax purposes). A resident permit is available to non-Cypriots who own property in Cyprus. One will be given without trouble if he can demonstrate that he and his family are self-sufficient.
Become acquainted with the many modes of communication accessible
- Telephone – Telephone service in Cyprus is generally excellent, both for landlines and mobile phones. In most towns and post offices, public telephones are available. Cash and phone cards, which can be purchased at retail stores and post offices, can be used to make calls. +357 is the national dialing code.
- Internet connectivity is available in Cyprus via dial-up service, cable modem, dedicated lines, and DSL. Broadband is becoming more commonly available in both the home and the workplace. The country code for Cyprus is.cy.