FAQs

Acquisition of immovable property by foreigners in Cyprus

Cypriots and EU citizens:
According to the Cyprus Law, Cypriots and EU citizens, Cyprus may acquire any property without restrictions.

Non-EU citizens:
For non-EU citizens, there are restrictions on the type and size of real estate they are allowed to buy. Precisely, non-EU citizens may purchase a house/a flat/ a building plot/land up to 4.014m2. It should be underlined that non-EU citizens may also buy a shop under the condition that the shop will be used only for business purposes. Additionally, it should be highlighted that Cyprus Companies whose shareholders are non-EU citizens may obtain business offices and residence for their foreign employees given that they maintain a fully-fledged office.

According to the provisions of the Acquisition of Immovable Property (Aliens) Law (Cap.109), non-EU citizens wishing to buy immovable property in Cyprus must submit an application to the District Office of the District where the property is located.

The Applicant should submit together with the Application the following documents/details:

  • Form Comm 145 completed and signed;
  • Contract of sale;
  • Financial standing (i.e. a bank statement);
  • Particulars of the property and of the current owner;
  • The terms of payment and the way of acquisition;
  • A copy of the Applicant’s and the spouse’s passport. In case the spouse does not have the same surname as the Applicant then a marriage certificate needs to be submitted;
  • Copies of the governmental survey plans;

The letter of approval/refusal by the District Office may take approximately up to six months. Nevertheless, the Applicant may in the meantime take procession of the immovable property he/she bought.

Transfer Fees of Immovable Property

All taxes and duties regarding the property bought, due at the date of the transfer, are payable by the owner (Vendor). The only taxes payable by the purchaser simultaneously with the transfer of the property in his name are the transfer fees which are payable on the market value of the property at the date of the contract, as valued by the District Land Officer, and not on the purchase price if it is lower.

The rates on the market value are:

Value of Property

Transfer Fee Rate

Up to €85,000

3%

From €85,001 to €170,000

5%

More than €170,000

8%

 

If for example, the purchase of a property made in joint names (i.e. husband and wife, and provided that the total purchase price is more than Euro €85,430) the calculation for the total transfer fees are as follows:

 For Example, if the market value is € 153,800:

Value

Transfer Fee Rate

Transfer Fee

The First

€76,900

3%

€2,307

The Next

€76,900

3%

€2,307

Total

€4,614

 

For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied.​

In the case of free transfers of property between the following parties, the transfer fees are calculated on the value of the property as of 1 January 2013 at the following rates:

  • from parents to children 0%
  • between spouses 0,1%
  • between third-degree relatives 0,1%

Exemptions from transfer fees

The following transfers are exempt from transfer fees:

  • under a qualifying reorganisation
  • under a qualifying loan Restructuring (note 10)
  • in the context of bankruptcy, liquidation, disposal of mortgaged immovable property by the lender, where the sales proceeds do not exceed the amount of €350.000 per owner
  • Transfers that are subject to VAT
Immovable Property Tax

The Immovable Property Tax has been abolished since 1st January 2017.

Stamp duty

“The Cyprus Stamp Duty Law (the “Law”) provides that stamp duty is payable on any document which concerns any property situated in the Republic of Cyprus or matters or things to be executed or done in the Republic of Cyprus, irrespective of the place of execution of the document. The Cyprus Stamp Duty Law has been amended by Law 173(I)/2012 and it is effective since 1st March 2013.

Rates:

Value Contract

Stamp Duty (% per €)

Up to €5,000

0%

€5,000 – €170,000

0,15%

Over €170,000

0,2% but capped at €20,000

If on an agreement or memorandum of agreement and all documents embodying any agreement there is no specific fixed value, then the stamp duty is €34.17. The stamp duty is payable at once.

Personal Income Tax

The tax rates for individuals are as follows:

Taxable Income

Tax Rate
%

Tax Amount

Cumulative Tax

0 – 19.500

0

19.501 – 28,000

20

1.700

1.700

28,001 – 36,300 25

2.075

3.775

36,301 – 60,000 30

7.110

10.885

Over 60,000 35

For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied.​

In the case of free transfers of property between the following parties, the transfer fees are calculated on the value of the property as of 1 January 2013 at the following rates:

  • from parents to children 0%
  • between spouses 0,1%
  • between third-degree relatives 0,1%

Exemptions from transfer fees

The following transfers are exempt from transfer fees:

  • under a qualifying reorganisation
  • under a qualifying loan Restructuring (note 10)
  • in the context of bankruptcy, liquidation, disposal of mortgaged immovable property by the lender, where the sales proceeds do not exceed the amount of €350.000 per owner
  • Transfers that are subject to VAT
Capital Gains Tax

Capital gains tax (CGT) is charged at the rate of 20% on gains arising from the sale of immovable property in Cyprus or the sale of shares of companies that own immovable property in Cyprus.

Allowances

Individuals are entitled to deduct from the capital gain the following lifetime allowances:

  • Disposal of principal private residence (subject to conditions) €85.430
  • Disposal of agricultural land by a farmer €25.629
    Other disposals €17.086
Corporation Tax

Companies and semi-governmental organisations are subject to corporate tax at a rate of 12,5%.

VAT on immovable property

Sale of non-developed building land VAT at the rate of 19% must be charged on the sale of non-developed building land, as of 2 January 2018. Non-developed building land is defined as any land intended for the construction of one or more structures in the course of carrying out a business activity. No VAT will be imposed on the purchase or sale of land located in a livestock zone or areas which are not intended for development such as zones/areas of environmental protection, archaeological and agricultural.

Imposition of the reduced rate of 5% on the acquisition and /or construction of residences for use as the primary and permanent place of residence.

The reduced rate of 5% applies to contracts that have been concluded from 1 October 2011 onwards provided they relate to the acquisition and/or construction of residences to be used as the primary and permanent place of residence for the next 10 years. For contracts concluded up to 30 September 2011 for the acquisition and/or construction of residences for use as the primary and permanent place of residence, the eligible person must apply for a grant.

The reduced rate of 5% applies for the first 200 square meters. The standard rate applies to the remaining square meters.

The reduced rate is imposed only after obtaining a certified confirmation from the VAT Commissioner. The eligible person must submit an application on a special form, issued by the VAT Commissioner, which will state that the house will be used as the primary and permanent place of residence. The applicant must attach a number of documents supporting the ownership rights on the property and evidencing the fact that the property will be used as the primary and permanent place of residence.

As of 8 June 2012 eligible persons include residents of non-EU Member States, provided that the residence will be used as their primary and permanent place of residence in the Republic.

The documents supporting the ownership of the property must be submitted together with the application. The documents supporting the fact that the residence will be used as the primary and permanent place of residence (copy of telephone, water supply or electricity bill or of municipal taxes) must be submitted within six months from the date on which the eligible person acquires possession of the residence.

A person who ceases to use the residence as his primary and permanent place of residence before the lapse of the 10-year period must notify the VAT Commissioner, within thirty days of ceasing to use the residence, and pay the difference resulting from the application of the reduced and the standard rate of VAT attributable to the remaining period of 10 years for which the property will not be used as the main and primary place of residence. Persons who make a false statement to benefit from the reduced rate are required by law to pay the difference of the additional VAT due. Furthermore, the legislation provides that such persons are guilty of a criminal offence and, upon conviction, are liable to a fine, not exceedingly twice the amount of the VAT due, or imprisonment up to 3 years or may be subject to both sentences.