Buying property in Cyprus
 
A Sale Agreement must be duly stamped and deposited with the Land Registry Office (this procedure is legally called "Specific Performance"). The purpose of which is to ensure that the registration of the separate Title Deeds will be transferred promptly into the name of the Purchasers.
 
With the deposition of the Sale Agreement with the Land Registry Office the Company does not have the right to transfer the Title Deeds into the name of any other person than the Purchasers and/or either the Vendors or any other third person is allowed to lodge memo or mortgage. Their rights to become the registered owners of the property are fully secured. The specific performance procedure is similar to mortgage which is an encumbrance following the property not the person.
 
Furthermore an application has to be submitted on behalf of the Purchasers to the Council of Ministers which is indispensable for the acquisition of immovable property in Cyprus by a foreigner.
 
Contract of Sale and Leases
 
Under the Cyprus Law such contracts must be in writing. It is also advisable that contracts of sale be deposited in the relevant District Lands Office within two months after the signing of the contract, so that the purchaser's right to pursue the remedy of specific performance in the event of breach can be protected. Leases exceeding 15 years can be registered and registration should be affected within 3 months of the signing of the lease. Ownership in Cyprus is denoted by title deeds, issued by the District Land Office. All contracts must therefore provide for the transfer and registration of the property in ones name and for obtaining a title deed.
 
Acquisition
 
Under the Immovable Property Acquisition (Aliens) Law Cap. 109 no alien may acquire immovable property in Cyprus, other than by reason of death, without the prior permission of the Council of Ministers, after written application has been made on a specified form. Such permission is required both on purchase of freehold and on leases exceeding 33 years. Normally such permission is granted to bona fide alien individuals to acquire a flat, house or a piece of land for the erection of a house not exceeding three donums (4000 sq.mtrs.). This restriction will be abolished for E.U.-Citizens from 2009 as a consequence of Cyprus accession to the E.U.
 
In view of the use in the Law of the words "otherwise than by reason of death" it is submitted than alien may acquire immovable property in Cyprus without permission from the Council of Ministers, if he has inherited it as a legal heir or if it has been bequeathed to him as a legatee in a will.
 
The same individual cannot obtain permission for more than one property. Once permission is granted and the property is registered in the name of the alien, there is no restriction on the alien selling the property or disposing of it by will.
 
Transfer of the Title Deed
 
Transfer can be affected once permission to acquire has been granted by the Council of Ministers. Transfer fees are payable by the purchaser to the Land Registry Office on the sale price of the current market value as follows:

 
Capital Gains Tax
 
As from 1 August 1980 Capital Gains Tax is levied at the rate of 20% on gains arising from the disposal of immovable property by individuals. Gains arising on disposal of immovable property by individuals are exempt as follows:
 

CY£ 10.000 on disposal of any property.
CY£ 15.000 on disposal of Agricultural land
CY£ 50.000 on disposal of residence
 
The allowance granted is one of a lifetime benefit, unless it has not been exhausted at the first sale in which case the balance in your favour is carried forward.
 
Immovable Property Tax
 
This tax is imposed annually at the following rates on the current market value as at 1.1.1980 of immovable property situated in Cyprus and owned as at 1st January each year.
 

VALUE OF PROPERTY		RATE %
0	£ 100,000	Nil
£100.001	£ 250,000	2.5
£250.0001	£ 500,000	3.5
OVER	£ 500,000	4

The above rates apply to both legal persons and individuals.