Cyprus is an attractive location for immovable property investments for many reasons. On the one hand, the considerable law taxation schemes, the reliable legal framework and the straightforward bureaucratic procedures motivate business people to invest in real estate in the Republic of Cyprus. On the other hand, the warm climate and the quality of life attract individuals, pensioners and families looking for a holiday house or a new working environment, to buy immovable property on the island.
I would like to underline that Cyprus has a well-developed legal system which regulates the purchase of immovable property and it is harmonised with the European legislation. All the matters related to real estate are regulated through a set of legislations, often amended based on social and economic conditions.
The Immovable Property Law, Cap. 224 regulates all the matters related to tenure, registration and valuation of immovable property following the principles of the Cyprus Land Registry, in which immovable property is defined, recognised and valued.
In this article, I will point out the main aspects that you should take into consideration in case you are planning to buy or sell immovable property in Cyprus. The Cyprus Constitution safeguards the protection of ownership for everybody, regardless of nationality. That is to say, Cypriots and foreigners have equal rights related to ownership of their property without any interference from the government or any other individual.
ACQUISITION OF REAL ESTATE IN CYPRUS
As it has been mentioned, Cypriot and non-Cypriot citizens, permanent residents of the Republic of Cyprus have the right to acquire any property without restrictions. The residential status is accredited by district offices. An individual is considered as a permanent resident of the Republic of Cyprus if he or she resides on the island for at least 185 days per year. In this point, it should be highlighted that foreigners and EU citizens who are not permanent residents of the Republic of Cyprus and they would like to acquire immovable property in the Republic of Cyprus, they are obliged to follow some specific formalities. However, foreign purchasers should take into account some restrictions as well.
In this point, it should be clarified that non-Cypriot citizens living or working on the island for many years may acquire a second house in the Republic of Cyprus. Once, foreign buyers obtained the necessary permission and the property has been registered in the name of the buyer, there are no further restrictions. Therefore, the foreign buyer is the owner of the real estate located in the Republic and he or she may sell or dispose it as he or she wishes. I would like to emphasise that the heirs of the foreign owner are not obliged to get a permit from the Council of Ministers in order to proceed with the transfer of property on to their name.
SALE OF REAL ESTATE IN CYPRUS
The Sale of Immovable Property (Specific Performance) Law of 2011, (N. 81(I)/2011), provides the necessary protection to buyers regarding the purchase of real estate in Cyprus. Specifically, the provisions of this particular legislation impede the developer from transferring the property elsewhere or charging it for the time period that the contract is valid and legally effective. In case the vendor does not transfer the property to the buyer then the buyer may apply to the Court.
- If the value of the property is less than 85.430 Euro then the transfer fee is 3%.
- If the value of the property is between 85.431-170.860 Euro then the transfer fee is 5%.
- If the value of the property is more than 170.861 Euro then the transfer fee is 8%.