The Legals and Buying procedure

Compared to some countries the buying procedure in Cyprus is quite straightforward.

A deposit of Cyp £2.000 withdraws the property from the market. Within 5 weeks the contract must be
signed and a deposit of 30% paid. At this time the contract is lodged with the Land Registry and the client
becomes the beneficiary owner of that property. The outstanding balance is then divided into instalments
paid according to the progress of the construction, such as;

20% on completion of the foundations 20% on completion of the brickwork and plastering 20% on
completion of the flooring 10% on delivery According to Cyprus Law, the Contract exists in written format
and it should be registered at the Land Registry Office within two months from the date of signature to
guarantee the protection of the legal rights of the purchaser, in the event of nonobservance of the
Contract. Once the Contract of Sale is signed and registered at the Land Registry the ownership of the
purchaser is protected until the Title Deeds are issued and transferred to his name.


Cyprus is a very tax-efficient country in which to either invest or to have as a permanent place of
residence. Despite recent tax reforms due to Cyprus’s accession to the EU, taxation in Cyprus is still low
in comparison to other European Countries.

Cyprus has a double taxation treaty with the UK. The main purpose of this is the avoidance of double
taxation on income earned
If you reside in Cyprus for more than 183 days a year, you are considered a resident and you will be
subject to taxation on your worldwide income as follows:
Up to CY£ 10,000 nil
CY£ 10,001 to CY£ 15,000 20%
CY£ 15,001 to CY£ 20,000 25%
Over CY£ 20,000 30%
Pension Income from abroad is taxed at the rate of 5% on amounts that exceed CY£2,000.
Capital Gains Tax – this applies to income gained by the sale of immovable property and the rate is 20%.
However, there is an indexation allowance and other generous exemptions.
Inheritance Tax – this tax was abolished in January 2000
If you are trading in multiple properties or contracts then a Cypriot Limited Liability Company is a very tax-
efficient method of conducting this business with Corporation Tax on the profit at 10%.
We strongly recommend taking advice from an accountant or Independent Financial Advisor to ascertain
the best strategy to take.

Stamp Duty is then due on the property as follows:

1. Up to CYP 100,000 0.15% (CY£1.50 per 1000)
2. Over CYP 100,000 0.2% (CY£2.00 per 1000)

For example: Purchase Price of CYP 180,000
1. Up to CYP 100,000 CY£ 150
2. CYP 100,001 to 180,000 CY£ 160

Total Stamp Duty CY£ 310

Property Transfer fees are necessary to transfer the property to your name as soon as the government
authority has issued the Title Deed and the purchase has been settled.

Transfer Fees are as follows:
a. Up to CYP 50,000 3%
b. From CYP 50,001 to 100,000 5%
c. Over CYP 100,000 8%

For example:
Purchase price:CYP 180,000
up to CYP 50,000 CYP 1,500
CYP 50001-100,000 CYP 2,500
CYP 100,001- 180,000 CYP 6,400

Total CYP 10,400
Ensure that you have full ownership of the property upon completion, and that the relevant documents are
available for the lender.

With newly constructed properties, ensure that you know the date that the property will be registered to
you. The lender cannot lend on the security of the property until it has registered.

Due to the Cypriot legal and administrative system, there may be slight delays on securing your loan,
despite the fact that all reasonable steps will be taken to avoid this. So be prepared.

Make sure you have researched every possible cost that you may incur, whilst purchasing a property in
Cyprus . Note, you may be charged by the government in addition to the lenders legal costs (the Lenders
costs however are usually specified when the Lender offers you the mortgage).

•  Unless you are very experienced in purchasing abroad, it is very important that you seek some sort of
legal advice before signing the contract for a property or paying a deposit. The Lender will require a copy
of these signed documents together with an application form, however you will be able to sign these
documents 'subject to mortgage finance', once the contract is signed it is legally binding, so if you do not
state this and the Lender does not wish to do business with you, this could be a huge problem

•  Legal advice may be costly, so ensure that you receive a complete quote, incorporating all costs, before
applying for a loan.

•  A Cypriot bank account will be required.

•  It is advisable that a life assurance policy is set up on all mortgages.

•  Properties in Cyprus can be purchased by an individual or in joint names.
Reg.No. 100940
Reg.No. 247479
Reg.No. 247508
Reg.No 247856
Reg.No 247447
Reg.No. EE20532a
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Y. Kallis Group