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LCN DEVELOPERS Financial & Legal Info
The following information is offered as a general guide about property investment in Cyprus.Cyprus is the most popular overseas destination for real estate purchases in the Mediterranean. The legalities for property purchases are relatively simple. A governmental approval for buying property is required for foreigners, which is granted as a matter of routine to all bona fide purchasers, if the following are met:
- No criminal record
- Annual income of 12,000.00
- One house or one apartment
- Building plot not exceeding 4,000m2
- An apartment or
- A house or
- A plot of land,
Procedures:
A written application must be submitted by the non European purchaser to the Council of Ministers to grant permission for acquiring immovable property in Cyprus. The application should be submitted after signing the contract of sale. The approval is granted to all bona fide purchasers as a routine procedure.
Nominal application fee is 150,00 payable when permission is granted.
Acquiring the title deed:
Transfer of ownership from vendor to purchaser is accomplished through the Cyprus Land Registry Office by a simple procedure, either by the purchaser in person, or by appointing a third party with a Power of Attorney.
For a non Cypriot purchaser, the prerequisite for registration is to provide evidence of payment for the property with foreign exchange, as well as the signed contract of sale.
Upon the issuance, the title deed will be registered in the name of the purchaser, and will be recorded in the Government archives, which are confidential and inaccessible.
Taxation:
Transfer Fees based on property's value:
- Up to 50,000.00 3% fees
- 50,001.00 - 100,000.00 5% fees
- Over 100,000.00 8% fees.
Purchase price: 85,000.00
- Fees: First 50,000.00 � 3% = 1,500.00
- Next 35,000.00 � 5% = 1,750.00
- Total Fees: = 3,250.00 (3.82%)
Stamp Duty:
Stamp duty is due upon signing the contract.
Stamp duty rate:
- Up to the 100,000.00 1.5%
- Over 100,000.00 2 %
Purchase price: 150,000.00
- Stamp Duty; First 100,000.00 x 1.5% = 150.00
- Next 50,000.00 x 2% = 100.00
- Total Fees: = 250.00
Immovable Property Tax: per annum, pounds per thousand
- Up to 100,000.00 exempt
- 100,001.00 - 250,000.00 2.5 %
- 250 001.00 - 500,000.00 3.0 %
- Over 500,000.00 3.5 %
This levy is an annual property tax at the rate of about 20.00 - 40.00 per year for refuse collection, street lighting, sewerage etc.
Capital Gains Tax:
According to Cypriot Law, should the purchaser decide to resell the property at a later stage, the full amount paid in foreign exchange may be transferred abroad, as well as the equivalent of the full purchase price and any increase in value of the property. In addition to this allowance, the seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house. Property sales are subject to Capital Gains Tax at the rate of 20% on the gain, however, the first 10,000.00 are tax exempt.
Gains from a disposal of a dwelling house are exempt up to 50,000.00 if the owner resides in it continuously for five years prior to disposal.
Tax Privileges:
Personal effects, household goods and furniture can be free of import duty, provided that they are for personal use. There is also an allowance for a duty free car, and retired couples enjoy the additional concession of two duty free cars.
Retirees who become residents in Cyprus are taxed on their pension from abroad at the rate of 5% for amounts exceeding 2,000.00 annually. There is 0% on investment income (i.e. dividends and interest) brought into Cyprus. In special circumstances exemptions totalling up to 4,000.00 per person or 8,000.00 per couple may apply. Consequently, the total tax burden on alien residents is in practice often only 3%. Their total annual income up to 10,000.00 is tax exempt, as for all Cypriots.
Additionally, Cyprus has Double Taxation Treaties with many European and other countries. The main purpose of these treaties is the avoidance of double taxation of income earned in any of these countries.
Cyprus has double taxation treaties with: Austria, Belgium, Bulgaria, Canada, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, Sweden, UK, USA and Yugoslavia.
Property Ownership
