The immovable property market in Cyprus is one of the core industries which is increasingly becoming complex and investors are advised to seek independent advice as to their rights, protection and obligations. Real estate in Cyprus has been a key driver of economic prosperity.
Our team, consisting of real estate evaluators, attorney’s, capital gains experts and real estate agents, can be of valuable importance for future investments, whether it be private or commercial real estate acquisition or sale. Our firm has a proven record of successful acquisitions of complex real estate assets and property transaction services.
Before Buying – Immovable Property Due Diligence
There are some things to look out for during the property buying process and actions to take to help you avoid pitfalls.
Our team of experts, can provide a real estate due diligence report prior to the acquisition of the immovable property, which will allow you to reach to a concrete decision with all the pros and cons of the local real estate market as well as the property itself.
The due diligence report (non-exhaustive) may consist of:
- Land Registry Search about the property title and whether it is free from any encumbrances and unpaid mortgages
- Pending Utility bills, such as
- Outstanding Municipality Charges
- Outstanding Water Board Fees
- Outstanding Sewer Fees
- Outstanding Electricity Fees
- Information on Previous and current owners
- Inspection on building and planning permits
- Whether there are Tenancy Agreements in place
- Whether the property may have a VAT charge upon Sale
Submission of Sale-Purchase Agreement (SPA) to the Land Registry
Once the buyer and seller reach to an agreement the Sale-Purchase agreement will take place. It is important to note that the buyer, in order to gain full legal protection and to be able to raise an issue before a court in Cyprus, must submit the SPA to the Land Registry, within 6 months from the date of signature.
1. Sale Agreement Deposit Fees
A fixed €50 rate is payable to the District Land Registry Office when depositing the Sale Agreement with the Land Registry Office.
2. Capital Gains
Capital Gains on Immovable property carry a 20% tax on the value of the sale. If, however, the property is bought from a Banking Institution or from a third-party who has a Non-Performing Loan, the capital gains may be adjusted significantly, once a capital gains’ ruling is secured. Our experts may prepare and submit the ruling to the Tax Department.
3. Stamp Duty
Varies between 0.15% and 2% depending on the value of the property;
- No stamp duty applies for selling properties worth less than €5,000.
- For purchases up to €170,860, stamp duties are calculated at 0.15% of the Purchase Price.
- For properties with a value over €170,860, 0.20% of stamp duty applies.
4. Transfer Fees:
Vary between 3% and 8% depending on the value of the property:
PROPERTY VALUE IN €
Up to 85.000 –> 3%
85.001-170.000 –> 5%
Over 170.001 –> 8%
The current VAT rate in Cyprus is 19%. VAT generally applies to newly developed residential properties, commercial properties and plots of land with no lodgings (exceptions may apply). A specific application must be submitted to the VAT Authorities.
- Preparation, Review and Execution of Sale-Purchase Agreements
- Real Estate Due Diligence Reporting on property
- Land Registry Support & Appearance
- Capital Gains & Tax Advisory
- Stamp Duty services
This article is for informative purposes only and it is not to be taken as a legal advice. For more information please contact Mr. Andreas Christoforou ([email protected])