Frequently asked questions your ultimate guide to provide with answers to common questions or concerns you may have.
Frequently Asked Questions
Frequently Asked Questions
What does the process of purchasing real estate in Cyprus look like for an foreign citizen?
1. Legal inspections
We will make sure that the property has a title deed detailing the land registration number, the building registration number, the registration number of the specific apartment, the owner's name and notes if there are construction anomalies or illegal construction.
We will check the existence of a land registration deed, that contains details such as the lease on the property, mortgages, obligations towards government bodies if they exist, or if the lease was registered in favor of another buyer. After completing these tests, we will review the contract.
2. Contract and Payment
The contract is divided into two payments for the purchase of the property. The first payment is made at the signing stage (30%-40%) and the second payment is made at the stage of transferring the property and receiving a title deed in the name of the investor.
After that, we will fill out an income tax declaration for exemption from withholding tax paid to a foreign party and transfer the payment as stipulated in the agreement. We will report the agreement to the tax authority in Cyprus and pay a fee called stamp duty (200-400 euros depending on the purchase price of the property). We will wait two business days until the agreement comes back from the tax authority before we proceed to the deed to register the property.
3. Registration and Transfer of Ownership
We will make sure that the property has a title deed detailing the land registration number, the building registration number, the registration number of the specific apartment, the owner's name and notes if there are construction anomalies or illegal construction.
We will check the existence of a land registration deed, that contains details such as the lease on the property, mortgages, obligations towards government bodies if they exist, or if the lease was registered in favor of another buyer. After completing these tests, we will review the contract.
2. Contract and Payment
The contract is divided into two payments for the purchase of the property. The first payment is made at the signing stage (30%-40%) and the second payment is made at the stage of transferring the property and receiving a title deed in the name of the investor.
After that, we will fill out an income tax declaration for exemption from withholding tax paid to a foreign party and transfer the payment as stipulated in the agreement. We will report the agreement to the tax authority in Cyprus and pay a fee called stamp duty (200-400 euros depending on the purchase price of the property). We will wait two business days until the agreement comes back from the tax authority before we proceed to the deed to register the property.
3. Registration and Transfer of Ownership
- A non-European citizen cannot purchase more than two apartments in Cyprus under his name, but establishing a Cypriot LLC for this purpose will exempt him from this restriction.
- After receiving the purchase approval and the required approvals, we will deposit all the documents and get a date for the meeting to transfer the title deed. The investor will attend the meeting or ask the legal department to transfer the property in his name according to a power of attorney.
- We will sign the deed, and make it official that there are no complaints against the buyer and the full payment has been received.
- We will pay the purchase tax that varies according to the price of the property and the number of buyers.
In order to encourage apartment investors to purchase properties, Cyprus has introduced a legal provision that allows a discount on purchase tax. If the property is not under construction; the investor is not the first buyer from the contractor who built the building; or the contractor has already paid the VAT for the purchase - the investor will pay a reduced purchase tax at a rate of 50%. This discount is intended to make buying a property in Cyprus more affordable.
Examples of real estate reduced purchase tax in Cyprus, based on a total purchase price of 300,000 euros:
Single buyer:
Joint purchase of spouses/partners:
Examples of real estate reduced purchase tax in Cyprus, based on a total purchase price of 300,000 euros:
Single buyer:
- Purchase price: 300,000 euros
- Original purchase tax before discount: 17,200 euros
- Final purchase tax after discount: 8,600 euros
Joint purchase of spouses/partners:
- Purchase price: 300,000 euros
- Purchase tax is calculated separately for each buyer based on a purchase price of 150,000 euros
- Original purchase tax before discount: 5,800 euros per buyer
- Final purchase tax after discount: 2,900 euros per buyer
- Final purchase tax for both buyers together: 5,800 euros (instead of 8,600 euros if one person bought alone)
To answer this, we will compare the purchase of real estate in the nearby Israeli market, and in Cyprus. For example, a retiree who saved 250,000 Euros, may not be able to find real estate to purchase or receive financing for any property in Israel. Renting the property out in Israel will yield an annual return of only 2%-3%, which is very low.
On the other hand, in Cyprus (and specifically Limassol), there are properties for 250,000 Euros. A property of such value will usually be in the city center and close to the beach. Long-term rental of the property can potentially yield a much higher return - around 7%-8%, resulting in an annual income of 20,000 Euros to 30,000 Euros, before taxes.
On the other hand, in Cyprus (and specifically Limassol), there are properties for 250,000 Euros. A property of such value will usually be in the city center and close to the beach. Long-term rental of the property can potentially yield a much higher return - around 7%-8%, resulting in an annual income of 20,000 Euros to 30,000 Euros, before taxes.
Cyprus' economy is a service-based economy with significant contributions from the finance, tourism and shipping sectors. The country is strategically located between Europe, Africa and Asia, making it an important center for trade and investment.
The financial sector is particularly significant, as the country has a developed banking system that serves as a regional financial center. The government has implemented economic reforms to improve the country's competitiveness, and there are opportunities for further growth in sectors such as renewable energy, technology and real estate. Overall, the Cypriot economy remains an important player in the Eastern Mediterranean region.
The financial sector is particularly significant, as the country has a developed banking system that serves as a regional financial center. The government has implemented economic reforms to improve the country's competitiveness, and there are opportunities for further growth in sectors such as renewable energy, technology and real estate. Overall, the Cypriot economy remains an important player in the Eastern Mediterranean region.
Of course! Our Pre-investment Visit to Cyprus package includes accommodation in one of the island's best apartments or hotels, travel and transfers. During your stay, you will have the opportunity to see the island while getting to know Cyprus' real estate market.
Our contacts:
Interested in investing? Have any questions? Want to talk to us directly? Leave details below, and one of the company managers will contact you as soon as possible.