1. What is the common type of ownership or method of owning real estate in Cyprus?
Freehold, the land and building are owned outright in perpetuity. Leasehold is not common apart from a small number of large developments. Leases can be short term or long term.
2. Can I be a co-owner of Cyprus real estate?
Yes, one can be a co-owner. Certain restrictions apply to foreign nationals.
3. What taxes do I have to pay when I purchase Cyprus real estate?
Stamp Duty on the contract of sale or assignment agreement.
VAT if it is a new property for which the planning permission application was filed after 1.5.2004 and has not been used. If it is a resale there is no VAT on the purchase price.
Transfer fees are payable, currently at a reduced rate of 50%, if the purchase was not subject to VAT. If VAT was paid on the purchase price, currently no transfer fees are payable. Transfer fees are payable at the time of accepting the title deed in your name. If no title deed is available because the real estate is new or still under construction then transfer fees are not payable at the time of purchase but at a later stage.
4. Can I reduce the transfer fees payable, if applicable?
Yes, if the real estate is purchased in two or more persons names then the purchase price is divided according to the number of owners and the transfer fees are calculated per person starting from the lower rate.
5. Is the purchasing process of Cyprus real estate complicated?
If you are advised by independent and competent lawyers the process should be simple and safe.
6. What do I need to look out for when purchasing real estate in Cyprus?
One may most likely not be able to determine any risks without obtaining independent and reliable legal advice as buying property in Cyprus may appear to be straightforward where in fact it may not.
Lack of thorough due diligence which could affect the buyer’s rights detrimentally.
Poor draftsmanship of agreements concerning the conveyance.
A lack of balanced terms in the contracts.
Biased opinions of third parties which may have a bearing on the decision making of the buyer or seller.
Non-disclosure of important and relevant information concerning a development, or the specific residential property.
Absence of guarantees to secure the buyer’s investment.
Defects in land or the structure of the property which may become apparent after the sale is concluded.
7. What taxes are payable if I decide to sell the real estate?
The sale of real estate in Cyprus is subject to capital gains tax at the rate of 20% on the gain (which is calculated by taking certain expenses into account). Once-in-a-lifetime allowances are provided to individuals, which can be used to effectively reduce the amount of tax paid.
8. Is the use of a real estate agent a requirement in the sale and purchase of real estate in Cyprus?
No, it is not a legal requirement but a qualified licensed estate agent may be able to assist in the presentation of real estate options which should be independently examined by qualified and experienced real estate lawyers.