Again, there are several choices for you concerning acquiring a Mortgage. Many of the Developers recommend certain financial institutions but in the main they normally have "Loan agreements" in place of their own with the Cyprus banks which serve as a way to construct the houses and developments you are looking to buy.  It, therefore, makes sense to recommend you go to the same places - the Cyprus banks.

If we are asked, we also suggest the banks and will suggest a couple of the "popular" choices when you are with us. When a loan is secured in Cyprus you will be spoken to in English and you can be assured of a good service. Very often they will look at various currency solutions as well as your own thus helping and avoiding certain exchange rates. We will gladly accompany you should you wish.

At the moment, non-Cypriots must apply to the "Council of Ministers" to buy a property in Cyprus. This is done through the "District Administrative Officer" of the district in which the property is situated and is usually handled by Lawyers or other Professionals. Non E.U Citizens are restricted to the purchase of 1 property.

For E.U. Citizens there are no longer any restrictions and no limit regarding how many properties can be purchased.

Cyprus operates a very unique way in purchasing property called "Specific Performance". Under this law a purchaser of immovable property may secure the remedy of specific performance, by depositing a duly stamped copy of the contract with the Land Registry within 60 Days from the date of signing the contract, thus preventing the vendor from transferring property elsewhere for as long as the contract is valid and legally effective.

Often just referred to as RRET the Real Estate Transfer Tax is charged when the Title Deed is available for collection from the Government Authority; normally about 4 or more years after you purchased the property. It is a necessary requirement that transfers freehold ownership into the name of the purchaser.

Real Estate Transfer Tax is a personal tax and the amount payable is reduced if two people register as co-owners - see example of joint names below. The purchaser/s is responsible for the tax payment, and rates are on a graduated scale as shown below:

Working Example

If a person buys a property for €200,000 their RRET will be calculated as follows: 3% up to €85,450 = €2563.50, 5% on next €85,450 = €2563.50 and 8% on the remainder (200,000 minus 170,900) €29,100 = €2328.00. So The Total RRET Payable would be €7455.00

However, because Real Estate Transfer Tax is a Personal Tax, the cost will be reduced if the property is bought in joint names.

Example

First €85,450 at 3% = €2563.50
Second Co-Owner €85,450 at 3% = €2563.50
Remaining €29,100 now at 5% = €1455.00

Total Payable would be €6582 - The principle continues if you add a 3rd or 4th purchaser etc

The purchaser is liable for the payment of Stamp Duty at the rate of 0.15% up to the value of €170,800. Thereafter, the rate is 0.2%. This should be paid within 30 days of signing the contract or a monetary penalty is applied.

For example, Property worth €200,000 in Cyprus, stamp duty is calculated as follows:

€170,800 x 0.15% = €256.20
€29,200 x 0.2% = €58.40

Total Stamp Duty payable in this case is : €314.60

As a rough guide, Local Authority Tax would be approximately €80 - €250 Euros per year depending on the size of your property. This tax is for refuse collection, street lighting, sewerage, etc. The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

In addition, the prices are calculated differently from one area to the next.In Cyprus, the local "Municipality" would set the prices based on their costs and services which might be very different to other towns etc.

Capital Gains Tax will be payable at the rate of 20% on the net profit - i.e. the difference between the purchase price plus inflation adjustment, transfer tax, and any proven additions / improvements to the property, and the selling price.

However, when you sell a property in Cyprus, even though it may be your main residence, you are liable to pay Capital Gains Tax which is charged on its disposal.

Subject to certain conditions, individuals may claim the following deductions:

• €17,086 as the entry level amount
• €85,430 if the property has been the main residence of the tax payer for a minimum period of five years (land must not exceed 1500m2).

• Income between €00,000 to €19,500 is tax-free
• Income between €19,501 to €28,000 is taxed at a rate of 20%
• Income between €28,001 to €36,300 is taxed at a rate of 25%
• Income of €36,301 and over is taxable at a rate of 30%

Those that have income from pensions pay a flat rate of 5% Income Tax. However, individuals can choose to register under general income tax rules if beneficial.

Personal Allowance for a Retired Individual:

• Pension Income between €0 - €3420 = 0%
• Pension Income over €3420+  = 5%

The rate of VAT in Cyprus is currently 15%. The Government of Cyprus imposed the Vat on all properties for which the applications for permits are submitted to the Authorities after the 01/05/2004.

VAT is not applicable for properties with permits before /01/05/2004.