The Buying Process

Buying a property in Cyprus is very similar to that in the UK. When you have found your new home you will be required to provide a deposit of between CY£2,000-3000 (approx. £2400 - £3600) to reserve the property. In Cyprus, unlike the UK, this process is legally binding thus avoiding further third-party interest. Signing the contract, can sometimes be completed very quickly (a few days is possible) but normally the process takes about 4-6 weeks. At this stage you will be required to pay around 30% of the value of the property; the remaining sum is paid in stages according to the terms agreed with the developer. With a resale, 10% is paid on exchange of contracts, the balance payable upon completion, again within about 4-6 weeks.

Having signed a contract it is necessary that foreign buyers seek the approval of the Council of Ministers in order to acquire immovable (freehold) property. This is a routine procedure controlling issues set by government. Approval is not guaranteed but refusal for a UK citizen is almost unheard of.

Your Money

The Cypriot currency (CY£) has been historically strong and is now on a path of convergence with the Euro which is most likely set to replace the CY£ during 2007 providing additional convenience for the tourist, European traveler and business community. Expect property prices to rise significantly pre-convergence as parity is sought with general property values throughout the rest of the European Community.

As with the UK in Cyprus there are a number of unavoidable costs associated with the purchase of property and as these are sliding scales based on the purchase price it is difficult to give a general 'rule of thumb', However our consultants will be able to calculate a approximate guide figure for you based upon your budget expectations. The basic list of fees are as follows;

Legal Fees: (including search fees and the application to the Council of Ministers) usually around CY£1,000 - 1,200.

Stamp Duty: The duty will be paid within 30 days of signing the contract and the contract should be signed accordingly to avoid penalties.

Property purchase price                 Rate of duty
Up to CY£100,000                           CY£1.50 per 1000
From CY£100,001                            CY£2.00 per 1000

VAT: The rate of VAT on property is currently 15%. Applicable to property where building permits were issued after 1st May 2004.

Property transfer Tax: Provision will need to be made to pay this tax when the title deeds are secured. With new projects this could, be several years down the road. The transfer tax is on a sliding scale based on the property value as follows:

Property value                                               Tax rate (%)
On the first CY£50,000                                         3
On the second CY£50,000 or part thereof              5
On any additional amount above CY£101,001           8

Running Costs: These take into account services like electricity, water, sewerage and in the case of a community development the service charge for the maintenance of the common area, pool etc. Generally the annual running costs will be in the region of CY£400 for a Villa and CY£550 for a community home. Of course these figures can vary subject to individual usage. In addition there is an annual tax Immovable Property Tax based on the property value which again operates on a sliding scale of:

Property value                                 Tax rate (%)
Up to CY£100,000                                 Exempt
CY£100,001 - 250,000                          CY£2.50 per 1000
CY£250,001 - 500,000                          CY£3.50 per 1000
CY£500,001 and above                        CY£4.00 per 1000

Total Purchase Costs: It is difficult to arrive at total costs due to the impact of the sliding scales, but as a 'rule of thumb' we would suggest that costs will be approximately 5% of the purchase price for a property valued at CY£75,000 up to 8% for a property valued at CY£750,000.

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