Buying a house or property in Cyprus

Buying a property in Cyprus

Buying a property in Cyprus is extremely popular with Britons and has become the fifth most popular foreign destination attracting 60,000 foreign property buyers. As well as lots of sunshine Cyprus has an extremely good infrastructure including roads, hospitals and shops. Perhaps a larger incentive though is the 5% flat tax rate.

Properties in Cyprus are mostly new houses and apartments. Most older properties are in the established towns and rural renovation projects are hard to find. Prices are climbing fast particularly in the tourist resorts such as Paphos.
By joining the EU it is now easier to 'buy to let' and this will fuel the rise in property prices in Cyprus.

The legalities of buying a property in Cyprus.

As with most countries you will decide an area that you want to buy a property and then view relevant properties. Once you have found a property that you want to buy you make an offer and at that point a deposit of between CY£1,000 and CY£2,000 is required to reserve the property. CY is Cypriot Pound, the currency of Cyprus.

The next stage of buying a property in Cyprus is to sign a contract to purchase and to pay a 20 or 30% deposit. A completion date is then agreed when the balance is paid and the property ownership is transferred.

There were certain restrictions for property purchases in Cyprus but many of thes ehave been lifted now that Cyprus has joined the EU.

Transfer taxes on the purchase of a property in Cyprus are 3% on the first CY£50,000; 5% on CY£50,001-100,000; and 8% on CY£100,001 and over.

Stamp duty is levied at CY£1.50 per CY£1,000 on the purchase price up to the value of CY£100,000, and thereafter at CY£2 per every additional CY£1,000.

An annual property tax of 2-3.5% of the market value of the property is also levied. When a property in Cyprus is sold Capital Gains tax is payable at the rate of 20% on the gain, although the first £10,000 gain is exempt.