After EU accession, Cyprus has become attractive to foreign investments, especially in immovable property.
EU citizens residing permanently in Cyprus and EU registered companies having their registered office, central administration or place of business in Cyprus are allowed to acquire immovable property without any restrictions.
The Cyprus legislation regulating the sale of immovable property is extensive and complex, imposing certain formalities which must be complied with within strict time limits, something which renders it necessary to obtain legal assistance at the very beginning of the transaction.
The vendor or purchaser of immovable property needs to seek legal advice in order to ensure that the sale agreement covers all main aspects relating to the sale of immovable property in Cyprus. The sale agreement must be duly stamped and filed with the District Land Office so that the purchaser acquires the right to specific performance. Stamp duty and transfer fees are calculated on the purchase price. Any capital gains tax due by the Vendor, must be paid before the transfer and registration of the property takes place.
It is important to note that there are restrictions on the acquisition of immovable property by non Cypriots or EU Citizens not residing permanently in Cyprus. These restrictions are now regulated by the Acquisition of Immovable Property (Amendment) Law of 2003 which has been in force as from the 1st of May 2004. The main provisions are the following:
Ü A permit by the Council of Ministers is required in relation to EU citizens not residing permanently in Cyprus or EU registered companies having their registered office or main place of business or central administration in an EU member state, if the property is acquired for secondary use. These restrictions are expected to remain in force until 2009.
Ü A permit by the Council of Ministers is also required in relation to non–EU citizens, legal entities registered in non-EU countries, legal entities registered in Cyprus but controlled by shareholders who are non-EU citizens and trusts with non–EU citizens as beneficiaries. If the property concerned exceeds 4.012sq.m, then approval may be granted only under certain circumstances.
Where a permit is required, an application to the Council of Ministers (through the District Officer) must be filed, accompanied with certain documentation, a service which our firm provides.
Note: All of the above restrictions do not affect in any way the right of any person to purchase immovable property for investment purposes and file the relevant sale agreement with the District Land Office to acquire the beneficial interest of specific performance, but the transfer and registration of the title deed shall only take place under the conditions explained above.
Please read more for the relevant duties, fees and taxes when buying or selling property in Cyprus.
For more information contact Helena Andreou at helena@antonisandreou.com