The legal system in
Cyprus
is based on the British system. It protects the purchaser’s rights in many ways. For the purchasers protection the
Cyprus
land registry provides a simple and effective legal "instrument specific performance”. Once the contract of sale is signed and the deposit has been paid, the contract is registered at the land registry. This protects the ownership rights until the title deeds are issued and transferred to the purchaser’s name. Once the contract is lodged with the land registry it cannot be withdrawn by anyone. The property cannot be leased, sold, transferred or mortgaged unless by the purchaser.
Title Deeds
When acquiring title deeds, transfer fees must be paid to the Cypriot Government. In cases where the property is part of a project under construction, the purchaser must expect the separate Title Deed to be issued in approximately 3-4 years from the date of delivery. The transfer fees will be paid by the purchaser at that time to acquire it.
Value CYPPercentage%Transfer FeesCumulative fees
1-50.0003%
50.000-100.0005%
100.000 upwards 8%
Two purchasers buying one property will pay less in transfer fees as the first CYP50.000 per person is 3% and the second CYP50.000 per person is 5%. If your contract of sale is in joint names, for instance husband and wife, the lower rates are granted to both parties.
Note: in order to protect your interests between the time of signing the contract and the time youbecome the owner, your contract should be deposited at the District Land Registrys office for specific performance within 60 days of you signing your contract. This prevents the person from whom you are buying from, selling it to someone else.
Since Cypruss accession in the E.U. the island has become a tax haven for many European citizens. U.K. citizens who became a Cyprus tax resident can receive up to 70% reductions on their income tax bill. When you choose to declare your income in Cyprus, the U.K. government cannot ask you to pay more tax. Individuals that choose to be a Cyprus tax resident are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals that are not tax residents are taxed on income derived from sources in Cyprus.
An individual is a tax resident in Cyprus if he or she spends more than 183 days in any one year in Cyprus.
Income tax rates:
Chargeable Incometax rateaccumulated tax:
0-10.000 NIL
10.001-15.00020%
15.001-20.00025%
over -20.00030%
Foreign pension is taxed at the rate of 5% with an annual exemption of CYP 2.000.
Exemptions:
Any income that is received from interest or dividends is exempted entirely from income tax.
The Cypriot government offers a preferential low rate of 5% to any EU nationals retiring in Cyprus. Your pension can be paid gross to you at home and declare your pension in Cyprus and pay local tax (5%).
On disposal of a property, there will be capital gains tax at the rate of 20% on the profit. The first CYP10.000 (or CYP50.000 in the case of ones private residence) is exempt.
Important note: while every attempt was made to ensure the accuracy of the information provided, it is always advisable to seek legal advice before proceeding in any matter.
