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The process of buying property in Cyprus

Compared with other countries, the sale procedure of property in Cyprus is quite simple.

Do not Cypriot citizens have the right to purchase the following:
• An apartment or a house
• The house is under construction at the site no more than 4.012,5 m2 or
• The plot size is no more than 4.012,5 m2 with a view to the construction of houses within a reasonable period of time

For citizens of European Union countries, these restrictions are removed in 2009.

For the acquisition of real estate does not require any special permits.

However, to transfer ownership titles to their name, are not EU nationals must obtain permission from the district council. It's pretty simple formal procedure. Typically, this has been the client's lawyer. Deny Only for serious reasons (eg, criminal history), but even in this case, the client has the right to issue title to another person such as a relative.

Reservation

The process of buying property in Cyprus is simple and transparent.

Firstly, the buyer is coming to Cyprus, examining objects and choose one you like. After a preliminary oral agreement between the parties executed Reservation Agreement, and the buyer pays a small deposit for the developer to remove the object from the market and fix the price of the transaction. This will give a little time lawyer for all the necessary checks for the presence of real estate liens and encumbrances, preparation of necessary documents for the signing of the contract, and provide the client time to organize his finances. Using an independent lawyer is recommended. The approximate cost of a lawyer of 1% of the transaction amount.

agreement

After the lawyer had all the checks executed contract of sale. In addition to standard items, the contract includes the financial conditions of the reservation agreement. For the signing of the contract the buyer must pay at least 30% of property value. Payment Plan balance depends on the construction phase of the object, as well as agreements between the parties. The contract can be signed by the client or the lawyer on the basis of a power of attorney from the client.
It is worth mentioning that Cyprus is very often clients draw up a power of attorney in the name of a lawyer to perform actions in his absence. This is a very convenient procedure, relieves the buyer from having to come to Cyprus for the decision "bureaucratic" procedures. It is also safe: a lawyer can perform the items specified in the authorization, only with the written permission of the buyer.
If the customer prefers to sign a contract (or other official documents) itself, thus being outside of Cyprus, he can do it in Cyprus embassy residence.

Once the contract is signed, it must be registered in the tax department. When you register you must pay stamp duty, which is calculated as follows (from the amount of the transaction):

• The first € 5.000 - 0
• € 5.001- € 170.000 - 0,15%
• More than € 170.000 - 0.2%

Registration of the contract shall be made not later than 30 days from the date of signing to avoid penalties.

After payment of the first installment (at least 30% of the cost) to the developer, the contract shall be deposited in the cadastral division of the Department of land for the purpose of specific performance. This procedure is customer protection. After the deposit of the contract the seller will not be able to sell the property to someone else, or in any other way to dispose of it. He also will not be able to lay it without the buyer's knowledge or impose other burdens. This must be done within 2 months from the date of signing the contract. The contract can be zadeponirovan the buyer or his representative on the basis of power of attorney (usually a lawyer). deposit of the cost of € 100.

VAT
New property, applications for building permits which filed after May 1, 2004 (when Cyprus joined the EU), is subject to VAT, the rate of which at present is 19%. VAT is not levied on objects permissions before 1 May 2004, land and secondary real estate.

If the property is acquired for their own use, it is possible to obtain special permission for reduction of VAT to 5%.

Reduction of the VAT levied on the first 200 square meters of covered area of ​​property, the amount of which no more than 275 sq.m. If the family 3 children, the size of m increases by 15 for each child.

If you received a VAT reduction owner sells the property before 10 years, it must inform the VAT Department within 30 days and return the saved state tax (part of which is proportional to 10 years). Reduced VAT can be obtained by only one property.

Normally, an application for reduction of VAT is applied immediately after the signing of the purchase contract and approval takes 2-3 weeks.

The transfer of property for use
After completion, you will come to Cyprus to conduct property inspections for compliance with its contract signed and the attached specifications. You will pay the balance of the world and will transfer water and electricity in your name. Connecting the water and electricity will cost you about € 200-300. Our after-sales service department will provide you with full support. We pozhem buy furniture, electrical equipment, curtains and other furnishings, buy a car, equip land, caring for garden and swimming pool.

FEES, TAXES AND OTHER COSTS

Transfer fee
Fees charged by the Department of land in the translation of the title of the owner. If the purchased finished housing with the title, then at closing. If this facility is under construction, then in 2-4 years when the document will be prepared by public authorities. The amount of fee is calculated as follows:
Cost of ownership € €% Tax rate of the cumulative collection €
Up to 3 85.430 2.563 2.563
85,431 - 170.860 5 4.272 6.835
Over 170.860 8


Collect calculated per person. If, for example, the property value of € 170.860 sold a pair, the tax will be € 5.126, ie, 3% per person.

In order to stimulate sales, the Cypriot government has granted a special promotion by the buyer of a new property, make purchases up to December 31, 2016. If they become VAT taxable property (ie, a new real estate), it will not pay VAT. If the property is not subject to VAT (eg, resale, or land), the amount of tax will be reduced by 50%.

Property tax - annual
Property tax is calculated on the value of the property as at 1 January 1980 (which is well below this value). They are subject to all real estate listings. Real estate tax in 2015 calculated sdeduet way:
Property value (at 1 January 1980) € Rate% cumulative tax €
The first 40,000 0.6 * 240
40,001 - 120,000 0.8 880
120,001 - 170,000 0.9 1,330
170.001 - to 300.000 1,1 2.760
300.001 - to 500.000 1,3 5.360
500.001 - to 800.000 1,5 9.860
800.001 - to 3.000.000 1,7 47.260
Over 3,000,000 1.9

Real Estate, the estimated value of which on 01.01.1980 below € 12.500 per person, are not taxed.

Most 1-bedroom apartments have an assessment on the 1980 below € 12.500 and, accordingly, are not taxed. Tax villa with 3 bedrooms is approximately € 300-400 per year.

Municipal property taxes - an annual
Each registered Cyprus property owner is obliged to pay an annual municipal tax on real estate. He also calculated the value of the year 1980. The rate is 0.1-0.2%. This tax is paid in local government. On the property, which has no separate ownership titles, the payment is made to the developer, which in turn makes the payment to the municipality.

Tax sewers (SBP) - the annual
This tax is levied in order to collect funds for the construction and expansion of the central sewage system, and does not depend on whether your property is connected to the central sewerage system. The tax is 0.5% of the assessed value for the year 1980. On the property, which has no separate ownership titles, the payment is made to the developer, which in turn makes the payment to the municipality.
In some parts of central sewerage has not been carried out, but it should not scare you. Each house has a septic tank and a collection for which you want to fill in a few years. called special service for cleaning.

City tax - annual
The collection, which includes garbage collection, street lighting, sewerage use. It is an annual, and the amount varies depending on the locality. It is about € 80 to € 170 per year.

Capital gains tax If the owner decides to sell his property, in accordance with the Cypriot law, the amount for which he bought it, and the first € 17,086 of income (per person) are not taxed. Income is taxed more than 20%. If the property was used as a place of residence, the amount of income to € 85.430 (per person) can be exempted from this naloga.Pri deducted from gross proceeds acquisition costs and improve the property, adjusted for inflation up to the date of sale in accordance with index of consumer prices in Cyprus. Costs associated with the acquisition and sale of real estate (eg, fees for transfer of property rights, legal costs), can also be deducted from the tax base subject to certain conditions.
From the capital gains tax exempt property owners, purchased with the period from August 2015 until December 2016, in accordance with the special benefits from the government of Cyprus, aimed at stimulating the real estate sales, regardless of when the property is sold.

Inheritance tax
Inheritance tax in Cyprus canceled.

Payment of water and electricity
Water and electricity are charged according to consumption, so the cost varies. The approximate cost of water is 20-50 Euros every 3 months. Electricity is charged every 2 months, in accordance with the hours of about € 50- € 100 per month per family.

Gas
Currently there is no central Cyprus gas, however, detached houses in used cooking plate powered by gas cylinders. Gas bottle 10 kg costs about 11 euros.

Maintenance of the common areas
Maintenance of the common areas is paid annually in the form of pre-payment. The amount depends on the size of the property and the total area, availability of infrastructure and the total number of real estate. The service includes cleaning and minor repair of common areas, cleaning of private streets, caring for a garden, water and electricity for the common areas, replacing light bulbs, etc. The amount of each particular item is available from the developer or management company. € 40-120 per month.

Insurance
During the construction period the property is insured by the company. Since the transfer of the property for use, insurance payment made by the buyer, and is organized by the builder, in reputabelnoy insurance company and at a reasonable price. Upon receipt of the individual titles of the owner, the owner has the right to arrange insurance himself. The cost of insurance depends on the value of the property. Insurance Furniture and furnishings - personal choice of the owner.

PROCESS FOR SALE - Summary

The client chooses the property.
The customer pays the reservation fee (from € 5,000 + VAT, depending on the value of the object) and signed the reservation agreement, which specifies the basic parameters of the transaction (price, date and amount of payments is included in the price). On reservation, we will remove the object from the sale for up to one month. This time is sufficient for the signing of the contract and the client organization of the first installment.
At this stage, usually connected lawyer who checks the property (encumbrances and the corresponding permits).
Attorney checks contract developer or offering your parties come to a mutual agreement regarding the conditions.
The client and the developer signed a contract.
The client makes the first payment in the amount of not less than 30% of the cost.
The lawyer registers the contract in the tax and pay the stamp duty.
Counsel submits an application for reduction of VAT from 19% to 5%, if the client gets the first property for their own use.
A lawyer shall deposit contract in the cadastral chamber.
The developer completes an object, the client pays in stages, in accordance with the timetable spelled out in the contract.
The client receives the property and makes the final payment. If you purchased the finished object, the entire amount disburse simultaneously with the signing of the contract.
The client takes the water and electricity in their name.
After 2-4 years after the completion of the client translates the title to his name.