The Buying Process & Legalities
Step One
Reservation Agreement
The prospective buyer has 2 options when he/she decides to purchase property in Cyprus:
1. To sign a Reservation Agreement (Option to Buy) or
2. Sign the Contract of Sale.
This will take the property off the market for a specified period of usually one month. Within this holding period, the solicitor who is acting on behalf of the purchaser will carry out all the necessary inquiries that are required, at the Districts Lands’ Registry Office.
Reservation Fee
The fee must be paid which is usually 1% of the property price or £CY1000, however this will be fully defined to the prospective purchaser at the outset of each property enquiry. Searches before Exchange of Contracts including a Planning Department search and a Company Search relating to the property developer will then be undertaken.
Step Two
Signing of the Contract of Sale
Upon signing the Contract of Sale, the purchaser(s) has a grace period of one month to pay the first instalment to the vendor. If the purchaser fails to do that, then the contract can turn void and the deposit is not refundable.
When the Contract of sale is signed by both the vendor and the purchaser, the Stamp Duty has to be paid within thirty days form the date of signing. The amount of the payable stamp duty depends on the value of the purchased property and will be fully defined to the purchaser at the outset of each property enquiry.
After the stamp duty is paid, a stamped copy of the Contract of Sale is usually lodged at the Lands Registry office (by the purchaser’s solicitor) within 60 days from the day of signing.
Step Three
Possession of the property
Possession of the property will be completed when the property is actually delivered to the purchaser. As from the date of delivery, the purchaser pays all the utilities to be connected. Additionally it is advisable to make insurance for the property and its contents.
Step Four
Transfer of title deeds
If the property title exists, then both parties proceed to transfer of title deeds to the new owners, provided the purchase price has been fully paid. If the property purchased is new, then the title will take approximately four years to be issued by the official authority. (This period is a standard procedure) Thus the remaining amount owed is repaid to the vendor with the delivery of the property.
Important Information: Property taxes, fees and rates
Real Estate transfer tax-fees
Real Estate Transfer tax-fees are paid once to the land registry and are necessary in order to transfer freehold ownership to the name of the purchaser. The transferee is responsible for the tax payment. The rates are on a graduated scale.
This can be done as soon as the relevant Government Authority has issued the title deed and the purchase has been completed.
| Value of property CY Pounds (CYP) | Transfer tax-fees (per hundred %) |
| Up to 50,000 | 3 |
| From 50,000 - 100,000 | 5 |
| From over 100,000 | 8 |
Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of £CY1.50 per thousand up to the value of £CY100,000 thereafter the rate is £CY2.00 per thousand.
This should be paid within 30days of signing the contract and usually this is paid by your solicitor on your behalf.
Immovable Property Tax is based upon the value of the property. For an average sized villa of three bedrooms for example, the immovable property tax will be approximately £150 per annum.
Local authority taxes and rates
A rough guide could be approximately £CY £50 - £CY150 per year depending on the size of your property. This tax is the effuse collection, street lighting, sewerage, ect.
The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.
Capital Gains Tax
Capital Gains Tax in Cyprus (in case of a sale of immovable property) is 20% on the profit made. There exists a tax free profit of £CY10.000 per person into the name purchaser.
