The process of buying property in Cyprus: A beginner’s guide

Cyprus offers an enticing blend of a high standard of living and favorable business costs, with distinctive locales such as the lively and cosmopolitan Limassol, the charming and archaeologically significant Paphos, the historically rich and transportation hub Larnaka, and the vibrant and culturally rich Nicosia.

Acquiring real estate in Cyprus is a simplified and stress-free procedure if the right assistance and consultation by the expert professionals is obtained. Below you will find the simple steps to be followed, for a successful transaction.

Property Reservation

An offer to acquire a property at an agreed-upon price, where the purchaser pays a non-refundable reservation fee, and the seller temporarily take the property off the market for an agreed duration. This duration is generally agreed at the 30- 45 days from the signing of the reservation.

The Reservation fee is relevant to the purchase price but it is usually between 5,000-10,000 euros. This amount is withheld either by the Estate Agent or the lawyer of the Seller and upon the signing of the Sale Agreement, it is considered as a payment towards the Purchase Price.

Appointment of Lawyer as your legal representative

While it is not mandatory to appoint a legal representative, it is recommended to appoint a lawyer. Using a knowledgeable and independent lawyer in Cyprus can protect you with the dealings with estate agents, the buyer’s lawyer and making the Cyprus conveyancing process faster. The Lawyer can assist you in:

(1) evaluating the estate agent appointment contract:
(2) Conduct due diligence on the property, review and advice on any possible risks,
(3) liaising with the estate agent and the other party’s lawyer in negotiate the terms of the Sale Agreement without feeling pressured.

Conveyancing and due diligence

Conveyancing is the essential procedure for transferring real estate from the seller to the purchaser. This process can be characterized as complicated due to the necessity of preparing and filing pertinent documents, and it mandates the involvement of legal representation to conclude the process.

It is highly recommended that due diligence be completed prior to contract signing since i.e. If the property does not yet have separate title deeds, the Lawyer can contact the relevant authorities to confirm that all permits for planning and construction are in place. If the seller is a company, your lawyer can also conduct a search at the Registrar of Companies.

Sale Agreement – Negotiation of the Terms and Conditions

Negotiating the terms and conditions of the Sale Agreement is essential to protect the interests of both the buyers and the sellers. Important provisions and mechanism have to be in place to regulate clauses for the purchase price, payment terms, deposit requirements, completion dates, and any specific restrictions, obligations, covenants or contingencies.

Registration of the Sale Agreement with the Land Registry Office

The registering of a contract for the sale of an immovable property at the Lands Registry is done by completing and submitting Form ΔΕ 129. The Contract of Sale, can be deposited within a certain deadline imposed by law (six months from the date of signing the Sales Agreement).

If the above deadline passes a Court Order can be issued, allowing for the deposit of the Contract of Sale after the deadline. Either party in the transaction can deposit the Contract of Sale, but the Contract of Sale can only be withdrawn from the Lands Registry Office by the Purchaser.

Property in Cyprus

Council of Ministers application to acquire an immovable property in Cyprus

Citizens of the EU are permitted to purchase real estate in Cyprus without any limitations. Non-EU citizens can purchase immovable property, nevertheless, permission must be sought from the Council of Ministers by written application, which must be submitted by the non-EU citizen purchaser after the contract of sale is signed.

The application is submitted along with the signed Sale Agreement and approval is typically granted within a period of 2-3 months. The Council of Ministers’ approval is not a pre-condition to take possession of the Property.

Transfer of Title Deeds

After registration of the contract of sale in the Land Department of his city, the buyer receives permission from the Council of Ministers to transfer the Title. After receiving a letter of authorization, the buyer visits the Land Department again, pays taxes and receives Title.

To complete the property transfer process, you’ll need to provide the property’s initial Title Deed along with receipts confirming payment of various taxes associated with the property transfer. These taxes include Immovable Property Tax, Capital Gains Tax, Sewerage Board Tax, and local property taxes paid to the Community/Municipality.

Additionally, during the transfer, the buyer is obligated to pay Property Transfer Fees, which can be likened to the UK’s Stamp Duty Land Tax (SDLT). These fees are calculated based on the Department of Lands and Surveys’ assessed market value of the property at the time of the sale.

If the property is purchased in joint or multiple names, these transfer fees are reduced because the purchase value is divided among each share owner. You can estimate the approximate Property Transfer Fee through the Department of Lands and Surveys website.

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Property Taxes

Immovable Property Ownership Tax

Cyprus no longer imposes immovable property tax as of January 1, 2017.

Local Authority Fees

Local authorities charge an annual fee, ranging from €85 to €256, based on your property’s size, for services like refuse collection, street lighting, and sewerage. Communal services fees vary depending on the property type and size. For properties within projects offering amenities like swimming pools or spas, communal fees cover maintenance and are typically higher, ranging from €30 to €50 per month for small multi-residential complexes.

Municipality Tax

As the property owner, you’re obligated to pay an annual Municipality Tax, determined by the property’s market value as of January 1, 1980. Rates typically range from 0.001‰ to 0.002‰, payable to your local municipal authority.

Sewage Tax

Property owners must also pay an annual Sewerage Tax, based on the property’s market value as of January 1, 1980. Rates vary from 0.03‰ to 0.035‰, and these taxes are payable annually to your local sewerage board.

Other Utilities / Insurance Rates

Utility costs are relatively low, with competitive telecommunication rates, an average annual electricity cost of €500 (based on consumption), and water rates around €200 annually (based on average consumption). These costs are typically paid monthly or quarterly and vary by development and property type. Property insurance is priced at 1.65% of the property’s current value, and contents insurance is typically calculated at 2% of their total value.

Inheritance Tax

Cyprus does not impose inheritance tax since 2000, which makes a very appealing destination for foreign citizens to own assets that can be passed on to their heirs. However, these must pay a transfer fee with the tax authorities.

Tax Advantages

Immigrant retirees can import personal effects, household goods, and furniture duty-free, provided they are for personal use and have been used for approximately one year. There is also no duty on cars, and retired couples can enjoy two duty-free cars.

Pensioners receive withholding tax exemptions and may be taxed at a nominal rate of about 4% or less depending on their income. Cyprus has Double Taxation treaties with various countries, preventing residents from being taxed in both countries.


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