cyprus law

The structure of Government is similar to other western democracies where human rights, political pluralism and private property are safeguarded. There is a multi-party system of democracy based on proportional representation.

The legal system is based on the same principles as those applicable in the United Kingdom and all statutes regulating business matters and procedures are based essentially on English law, which makes property purchase and other legal transactions understandable to most expatriates. The Continental system of administrative law, according to which the legality of administrative decisions can be judicially controlled, has been introduced and applied by virtue of the constitution.

AMENDMENT TO LEGISLATION

Cyprus became a full member of the EU on 1ST May 2004 resulting in many changes for EU Nationals planning to purchase property in Cyprus:-

1. An EU National resident in Cyprus is allowed to buy as much property in Cyprus without restriction and does not need to obtain approval from any authority. To prove residency in Cyprus an EU National must apply to the District Administration for certification of his residency by presenting personally to the District Administration his passport and pink slip (residency), which has already been obtained from the Immigration Department, together with Cy.£5.00 in cash.

2. EU Nationals who are not resident in Cyprus are permitted to buy as much land as they wish but are restricted to purchase one house or one apartment for which approval from the Council of Ministers is required.

3. In order to comply with the idea of free movements of people and goods certain restrictions have been lifted. Citizens of the EU may enter Cyprus without restriction even with only their National identity card, provided there is a photograph.

4. Exchange control restrictions are no longer in force and it is no longer necessary to prove that property was purchased from External Funds.

5. Cyprus Investment Policy is liberal and allows 100% foreign participation in all sectors of the economy, not only for EU Nationals but also for investors from third countries, unless otherwise stated in the legislation; e.g. the acquisition and development of land.

COUNCIL OF MINSTERS APPLICATION

For transfer of the property into an alien's name, (non EU National who is resident in Cyprus) permission from the Council of Ministers is required. The Council of Ministers has authorized the District Officers to grant approvals on its behalf. The criteria taken into consideration in the process of examining an application for the purchase of property include, inter alia, the applicant's family status, financial situation, occupation, the purpose of acquiring the property, its location, etc. Approval is granted in all bona fide cases.

Applications for the acquisition of more than one residence in Cyprus are not approved, except under very exceptional circumstances.

SEEKING EXPERT ADVICE

Expert advice should be sought before entering into any transaction for acquiring property in Cyprus. However the following points shall be noted:

• A search with the Lands Office must be made to ensure that the seller has a valid title to the property and that there are no mortgages over the property which would present problems with the transfer of ownership.

• In the cases of property under construction it must be checked that the planning and building permits can be obtained and separate title deeds can be issued. In the contract provisions must be made to provide for remedies in the failure of the Vendor to do so.

• A foreigner, other than EU Nationals can buy land for building, up to the extent of three donums. A permit to buy land outside the development area will probably be refused.

• It must be ensured that the land is suitable for building purposes i.e. zoning restrictions, building regulations, access to an official road, and availability of water supply, electricity and telephone lines.

• A married couple can only buy one house between them, not one each. (Not applicable for EU Nationals who are residents in Cyprus)

• A foreigner wishing to rent property for periods of 33 years or more requires the approval of the Council of Ministers.

• A foreigner can sell his house and buy another. Any bona fide repeat purchases will be granted a permit.

• A foreign purchaser may let their property only to residents of Cyprus (not short lettings).

• Any contract in the purchase/lease, etc. of real estate is valid, even if the Council of Ministers rejects the foreigner's request. As such, when purchasing property ask for legal advice in order to ensure that the contract includes a provision for such an event so as to secure a refund or other remedy to cover such an unlikely occurrence. The time period required for obtaining an answer from the Council of Ministers, provided all documentation is in order is approximately six to twelve months.

TRANSFER FEES

The purchaser will be liable to pay the following transfer fees for the property acquired, when this is registered in their name at the District Lands office. The fees are charged on the property's market value at the date of purchase.
Value of Property Cy£ Transfer Fee Rate % on property value
Up to £50,000 3.0%
£50,001 - £100,000 5.0%
Over £100,000 8.0%

For example:-

Transfer fee of a property valued at CY£130,000, provided such property is in one name the transfer fee will be:-

3% for the first CY£50,000 = CY£1,500
5% for CY£50,000 to CY£100,000 = CY£2,500
8% for CY£30,000 CY£2.400
Total Transfer Fee CY£6,400

Should the property be in joint names the transfer fee will be:-

3% for the first CY£50,000 X 2 = CY£100,000 = CY£3,000
5% for CY£30,000 = CY£1,500
Total Transfer Fee CY£4,500

IMMOVABLE PROPERTY TAX

The registered owner of the property is liable to an annual immovable property tax calculated on the market value of the property as at 1 January 1980. The tax is imposed on the value of the whole of the immovable property someone owns, so a Purchaser may have to pay immovable property tax prior to the transfer of the property to his name which can be claimed back with the actual transfer of title deed to his name.
Market Value CY£ Annual Tax Cy£ per thousand
Up to £100,000 Zero
£100,001 - £250,000 £2.5
£250,001 - £500,000 £3.5
Over £500,000 £4.00

DECLARATION OF TRANSFER OF IMMOVABLE PROPERTY (Law 9/65)

Transfer of immovable property means the passing of the title of immovable property from one person to another by the voluntary act of such persons.

Transfer Requirements

a) Completion of Form N270 (Declaration of Transfer of Immovable Property). The certificate of registration (title) of the immovable property, which is to be transferred, must be attached thereto. Where the transfer of the property takes place at a Lands Office other than the Lands Office of the District where the property is situated Form N270 must be completed in duplicate.
b) Completion of Form N.313.
c) Production of the receipts of payment of all fees, charges and taxes payable for the property under transfer. Such fee, charges and taxes are:
i) Immovable Property Tax,
ii) Immovable Property Town Tax,
iii) Capital gains tax,
iv) Estate Duty Tax (receipts of payment for all the above taxes and duties may be obtained from the Internal Revenue Department).
v) Sewerage Board Tax (receipt obtained from the Sewerage Board)
vi) Town rate (receipt obtained from the municipality in whose boundaries the property is situated)
vii) Communal rate (receipt obtained from the community in whose boundaries the property is situated).

Transfer

All documents mentioned above must be completed and signed by the interested persons and deposited with the Lands Office accepting the transfer.

All District Land Offices are open to the public on all working days (Monday 0 Friday, 8:00 a.m. – 12:39 p.m.),

Acceptance of Transfer

The acceptance of the transfer is effected by order or priority. Both parties must appear either in person or by agent and produce their identity card or other documents proving the same before the Lands Officer accepting the transfer.

- Disabled persons must be represented by their lawful agent or any agent appointed by the Court or any other person.

- Corporate bodies are represented by those persons who manage their affairs in accordance with the statutes, the law or any regulation.

Time require for completion of the procedure

Transfers without particular problems may be completed within one hour. In this case the registration of the immovable property and the delivery of the titles to the parties may be made on the same day, provided all interested parties appear at the Office on time. If not, the title is issued on the day following the transfer.


	akdevelopers@cytanet.com.cy