Mortgages and Bank accounts:
For all your mortgage requirements, we can arrange meetings with English speaking Mortgage Brokers. We now offer a variety of mortgages, including low start, interest only and Mortgages can be offered in a variety of currencies including Swiss francs, euros, Cyprus pounds, sterling – whatever your requirements. The process of obtaining a mortgage is a simple procedure and mortgages for your property can be arranged for up to 85% of the purchase price. We can now obtain mortgages with deferred payment which is especially helpful on a new build property - payments can be deferred for up to two years!! So buy your off plan property with complete confidence that once your deposit is paid, you will not pay anything else until you take possession of your brand new holiday home in cyprus. All lenders are familiar with the workings of staged payments for the developers, therefore please do not let this be a concern to you, as they will liaise with the developers on your behalf regarding the payment in stages, once you have decided which new build property you will be purchasing. They will also offer the same percentage, 85% of the property value, for all resale properties. Also, we can offer assistance in opening both UK and Cypriot bank accounts for all clients.
Legalities of Purchasing Immovable Property in Cyprus:
· Purchasing property in Cyprus - Compared to many countries, purchasing an immovable property in Cyprus by foreigners (aliens) is relatively simple. Non-Cypriots are permitted to buy, for their personal use, either:
a) A villa or apartment or,
b) A house on a building site not exceeding 3 donums (4,012.5 sq. meters) or
c) A piece of land not exceeding 3 donums for the purpose of erecting a house within a reasonable time.
· Seeking permission to buy Immovable Property - Permission to buy property must be sought from the Council of Ministers by in writing, which must be submitted by the non-Cypriot purchaser after the purchase contract is signed. Your solicitor will normally arrange this for you. However, this permission is granted more or less as a matter of course to all legitimate purchasers. However, whilst waiting for permission to be granted, purchasers may take possession of the property without restriction. The application to the Council of Ministers to acquire immovable property in Cyprus can be made within a reasonable time after signing the contract of sale.
· Title Deeds - Transfer of ownership from vendor to purchaser is accomplished by a simple procedure through the Cyprus Land Registry Office, either by the purchaser, in person or by appointed third party like your solicitor. In the case of a non-Cypriot, evidence of payment for the property with foreign exchange must be provided as a requirement for registration. The contract of sale must be in writing, and it is advisable that such contracts be registered at the District Land Registry Office within sixty days from the contract date. This protects the buyer's rights to the property and provides additional safeguards. When issued, the title deed will be registered in the name of the buyer, and will be recorded in the Government archives. The Government archives are confidential and will not be published or made accessible under any circumstances. Please be aware that Title Deeds can take up to five years to be registered in the purchasers name but this does not prevent the purchaser reselling the property in that time. At any time after the purchase, the buyer may sell or dispose of the property at will, provided that he/she has a valid contract.
· Fees and Taxes - The transfer of title can be effected once the Council of Ministers’ permission has been obtained and the Central Bank of Cyprus confirms receipt of the foreign funds. Upon transfer of the property and registration in the purchaser's name, the District Land Registry Office will charge Transfer Fees, which are on the market value of the property at the time of purchase, and are calculated as follows;
Value up to - CY£ 50.000 3%
CY£50.001 - CY£100.000 5%
CY£100.001 and above 8%
· Stamp Duty - Stamp duty is due at the time of signing the contract. Stamp duty is levied at the rate of CY£1.50 per CY£1,000 up to CY£100,000 and thereafter at the rate of CY£2 per CY£1,000,000. The purchase contract must be stamped within 30 days of its dated signature, and if this is not completed, then a fine may be imposed on the prospective purchaser
· Immovable Property Tax and Services Tax - An annual immovable property tax imposed by the government is payable and will be approximately CY£60-CY£120 per year, depending on the value of the property. The local Municipality also levy an annual property tax at the rate of about CY£20-CY£30 per year. Other authorities may also impose a sewage tax of CY£20-CY£40, depending on the value of the property.
· Capital Gains Tax - Should the purchaser decide to sell the property at a later date, Cyprus Law allows that the full amount paid for it in foreign exchange may be transferred abroad at the time of the resale. The equivalent of the full purchase price and any increase in value of the property may be transferred immediately. Property sales in Cyprus are subject to Capital Gains Tax at the rate of 20% on the gain, however the first CY£10,000 are exempt from this tax.
· Inheritance Tax – There is no Inheritance Tax imposed on immovable property
· Taxation Privileges - Personal effects, household goods and furniture can be imported duty free by persons retiring to Cyprus, provided they are for personal use and have been used for a reasonable period of time, normally six to twelve months. Also, there is no duty on a car, and retired couples, residing permanently in Cyprus, have the additional concession of two duty free cars
· Communal charges - These are usually payable monthly or quarterly in advance. They vary from development to development and depend on the area and type of the property. They cover an owner's share of the cost of cleaning and maintaining common areas and gardens, swimming pool expenses, electricity in common areas, management fees, rubbish collection and repairs. The estimated total is in the region of CY£150 - CY£300 per year. These charges are not always imposed and it depends on the type of property you purchase. They are more common in apartment blocks.
· Electricity, Water and Other Municipality Charges - Charges for utilities are payable to the respective authorities at regular intervals throughout the year. They are only based on your actual consumption. Costs may vary from property to property but as a rough guide it could be between CY£180 to CY£200. The local municipality or other authorities are responsible for the regular collection of rubbish. Depending on the area of the property the cost is from CY£40-CY£50 per year.
· Tax Advantages- Retired people drawing a pension in Cyprus are exempt from withholding taxes at source, and may be taxed at the nominal rate of about 4% or less depending on income. Additionally, Cyprus has Double Taxation treaties with many European and other countries, safeguarding its residents from paying tax in both countries.
