In Cyprus like most democratic states, the right of ownership in immovable property is constitutionally protected as one of the fundamental human rights. According to Article 23 of the Constitution, clearly underlying the right of each person to acquire, possess, enjoy or dispose of any movable or immovable property and to demand of others to respect this right.
It is worth pointing to mention that aliens owning immovable property in the Republic of Cyprus have access to the same rights and remedies as the citizens of the Republic of Cyprus in the event that any of their property rights have been infringed upon.
The Contract Law: The Contract Law regulates commercial transactions at large.
VAT Law of 2002, (as amended): Under the VAT law, a purchaser of property may apply to receive a refund of 14% on the applicable VAT of 19%. The refund of 14% is applicable on the first 200 square meters of any new dwelling home and it is applicable to one property per applicant and it is subject to the property being the dwelling home of the applicant.
It is to be noted that subject to further conditions, VAT at the rate of 19% is applicable on land which is purchased for development or commercial exploitation.
VAT shall be paid by the buyer.
Stamp Duty Law: The Stamp Duty Law enunciates, inter alia, the stamp duty which is payable on contracts relating to the sale and acquisition of immovable property and this is as follows:
It is to be noted that the failure to pay the stamp duty does not render a contract of sale void but such a contract can neither be used in Court proceedings nor for the transfer of ownership of the immovable property in the Land Registry until the appropriate stamp duty is paid.
Stamp duty shall be paid by the buyer.
Acquisition of Immovable Property (Aliens) Law Cap 109 as amended (“AIP Law”): The AIP Law sets out some limitations for the acquisition of immovable property by aliens. The term alien is defined as any person not being a citizen of the Republic of Cyprus and includes a local company controlled by non-residents, a foreign company, and a trust which has been created in favour of an alien person. It does not, however, include citizens of member states and companies incorporated according to the laws of an EU member state.
Under the AIP Law no alien can acquire immovable property unless the prior permission of the Council of Ministers has been obtained by submitting the relevant application before the District Officer. Applications to secure a permit by the Council of Ministers must be filed with the District Office of the city where the property is located. The consent of the Council of Ministers is granted easily, provided that the applicant submits the following documents:
Sale of Land (Specific Performance) Law Cap 232 (“Specific Performance Law. Under the Specific Performance Law, a purchaser of immovable property may secure the remedy of specific performance by depositing a duly stamped copy of the contract of sale of land with the Land Registry within six months for the date of its execution, thus preventing the vendor from transferring the property to another person or mortgaging it in favour of any financial institution.
Capital Gains Tax Law52/1980. Capital gains tax is levied at the rate of 20% on gains realised from the sale of immovable property, and this includes gains from the disposal of shares in private companies which own immovable property. The Capital Gains Tax Law exempts, inter alia, the following categories of disposals from Capital Gains Tax:
Gifts between relatives up to the third degree of kindred Gifts to limited companies whose shareholders are family members of the donor and remain as such for at least five years after the gift was made.
Gifts by family companies to their shareholders, provided that the property given was originally acquired as a gift.
Gifts made to charitable institutions or to the Republic of Cyprus Exchange of immovable properties.
Capital Gain Tax shall be paid by the seller.
TRANSFER OF OWNERSHIP:
The transfer of ownership of real estate property is conducted at the Department of Lands and Surveys. The following documents need to be submitted:
Transfer fees are payable by the purchaser to the District Land Registry Office based on the market value of the property at the time of purchase as follows:
| VALUE OF PRPERTY | € | RATE % |
| Up to | 85.430 | 3% |
| Over | 170.860 | 5% |
| Up to | 85.430 | 8% |
It is worth to know that no transfer fees are payable if VAT is applied at the time of purchase of the immovable properties and also it is reduced by 50% if no VAT is applied at the time of purchasing.
Further to the above, there is no transfer fee apply when transferring from parents to children. 0.01% rate applied between spouses, 0.01% rated applied between third degree relatives and EUR50 fixed fee when transferring to the trustees.
Transfer fee shall be paid by the buyer.