Cyprus: Guide to Buying Costs and Procedures
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Total transaction costs are moderate
How high are realtors’ and lawyers’ fees in Cyprus? What about other property purchase costs?
Transaction Costs |
||
| Who Pays? | ||
| Transfer Tax | 3% - 8% | buyer |
| Legal Fees | 0.10% - 1.0% | buyer |
| Stamp Duty | 0.15% - 0.20% | buyer |
| Agent Fee | 5% | seller |
| Costs paid by buyer | 3.3% - 9.2% | |
| Costs paid by seller | 5% | |
| ROUNDTRIP TRANSACTION COSTS | 8.3% - 14.2% | |
| See Footnotes Source: Global Property Guide |
||
How difficult is the property purchase process in Cyprus?
Foreigners can buy one home in Cyprus, and are entitled to hold land freehold, but there is a maximum limit on land ownership of 3 donums (4,014 sq m). A permit to register a property is needed from the government, but can easily be obtained through a lawyer. However since Cyprus’ accession into the EU on 01 May 2004, there have been plans to ‘de-restrict the housing/property sector. The plans target to allow unencumbered property acquisition by 2011.
Before the EU negotiations, no foreigners could rent out property. Even today, non-EU property owners cannot rent out property.
After the offer is accepted, a nominal deposit is made which can be as low as CY£ 2,000. This deposit is binding, so there is no gazumping. The contract is then drawn up, and on signing, the buyer has to pay 20% to 30% of the value of the property, the remainder being payable according to the contractual terms agreed. The contract must then be deposited at the land registry, within two months of signing.
A non-Cypriot buyer must then make an application to the Council of Ministers to acquire immovable property – largely a formality - including bank reference, criminal records, the size of the land, and a statement that this is the only home he will hold in Cyprus. Though the procedure can take up to one year, there is meanwhile no restriction on using the property, and in the unlikely event that approval is not granted, the buyer can re-apply, and anyway has 17 years in which to sell the property. Nor does lack of approval affect inheritance rights.
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.
Currency:
Exchange rate as of 16 Feb 2007: 1 € = 0.578449 CY£.
Transfer Tax:
The transfer tax is based on the open market value of the property as determined by the Land Registry department. The transfer tax is based on a progressive sliding scale. If the property is in joint names, the value is halved. Transfer fees are payable at the time of issue of title deeds, which can take 3 - 5 years after the final delivery of the property.
TRANSFER TAX |
|
| PURCHASE PRICE, CY₤ (€) | TAX RATE |
| Up to 50,000 (€86,438) | 3% |
| 50,000 - 100,000 (€172,876) | 5% |
| Over 100,000 (€172,876) | 8% |
Legal Fee:
Services of solicitors are not required by highly recommended, Legal fees are generally negotiable, between €865 and €1,730.
Stamp Duty:
Stamp duty rates depend on the purchase price of the property. The first CY£100,000 is charged 0.15%, and over CY£100,000 is charged 0.2%.
Agent's Fee:
Real estate agents typically charge 5% of the purchase price as their commission. By law, minimum agent's fee is 3%.
Cyprus - more data and information
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