Property Purchase Laws – Legal Advice on Real Estate

Without a doubt this is an important chapter in the Cyprus economy. With multimillion deals taking place daily, Cyprus has been and still is, in the top ten lists of investors from all over the world. Our Firm has acquired substantial experience in this sector and with its trustworthy partners and affiliates, has managed to provide, what we like to call, a ‘full package’ offered to our clients.

From a simple sale or purchase or rental agreement, to a multimillion property investment, we are in a position to provide you with any legal advice you may need. We can supervise the whole transaction and recommend trustworthy constructors, architects, surveyors or even agents, according to your needs. Our experienced lawyers on the matter, can also provide legal advice for disputes our clients may have concerning commercial or residential property.

Latest Developments

A recent unique service offered by our Firm, which is actually created by the many requests we have been receiving from our clients, is the immediate assistance and monitoring of the sale of your Property in Cyprus. The global economic recession has been forcing many investors and home owners to have to sell their properties at the earliest opportunity.

We have been therefore studying this trend very carefully and have drafted a new service with which the property owner can allow us to handle the problem he is facing, liaise on the owner’s behalf with our affiliate broker firms in Cyprus and guarantee an agreed price for the immediate sale of the said property. We then carry out the complete procedure of marketing and selling the property with the careful execution of the terms of the agreement with the property owner.

Investing in Immovable Property in Cyprus

Cyprus Property Law: Immovable Property Acquisition Regulations

Cyprus has become an attractive place for property purchases from all countries around the world because of low taxation, low costs, high standards of living, the hospitality of local population, the excellent all year around climate, safety and security. The island has one of the most advanced and reliable Land Registry Offices in the world and a banking system equal to other developed European countries. Cyprus maintains an effective Land Registry system in which all “immovable property (a term that includes both land and property) is registered.   Each piece of immovable has an associated:

  • Registration Certificate (also known as a Title Deed) containing information such as the owner(s), its size and location and the Land Office reference.
  • An accompanying Site Plan that situates the land on a map.

The acquisition of immovable property (Aliens) (Amendment) Law 54(1)/2003 brought about some changes to the old policy relating to the acquisition of immovable property by EU nationals or legal bodies.

Procedure for acquiring property in Cyprus

Buying Property in Cyprus: The Legal Process

Nationals of EU Member States are permitted to own as much ‘immovable property’ (a term that includes both land and property) as they wish. Once the Title Deeds for the property they are buying become available, they are required to provide proof of their citizenship by taking their passport to the District Lands office when they pay the Property Transfer Fees.

A NATIONAL OF A NON-EUROPEAN UNION COUNTRY must seek the approval of the Council of Ministers before they can own any type of immovable property. Furthermore, unless there are exceptional circumstances, their ownership will be limited to:

  • An apartment
  • A house
  • A building plot or land up to approximately 4,014 sq.m.

In exceptional circumstances, the Council of Ministers will grant permission to own more than one building, for example, if you’re property developer and wish to take over a hotel.

Obtaining Council of Ministers approval

 To get Council of Ministers approval to own property in Cyprus our firm will complete an application form and submit it, together with information about yourself and details of the property you want to buy, to the local District Office.

The District Officer makes further enquiries and prepares a report that is submitted to the Council of Ministers for their consideration. In the meantime, any contract you have signed and deposited at the Land Registry for Specific Performance to purchase a property remains valid and you may take possession of the property while your case is being considered.

The Council of Ministers advises the District Officer of its decision. In turn, the District Officer sends you a letter of approval (a permit) or refusal. The approval process may take between three to six months.
It is unusual for the Council of Ministers to refuse permission to bona fide foreign nationals.
When applying to the Council of Ministers, the following documents & information must be submitted:

  • Survey plan.
  • Copy of the title of ownership.
  • Copy of the building permit for the erection of the house/block of flats or for the residential development of estates. If separate titles of ownership have been issued for the flats of the block or if the house is mentioned on the title of ownership, applicants need not submit a copy of the building permit. For plots under division, applicants must submit a copy of the division permit.
  • Copy of the deed of sale.
  • Sectional view of the building or the flat. Very old houses mentioned on the title of ownership are exempted. A division plan must be submitted in the case of division of plots. In areas of residential development, the plan must be submitted showing the position of the house on the entire holding.
  • Area in square meters of the plot which is to be acquired.
  • Documents proving the financial situation of the applicant(s).
  • Copies of the pages of the applicants’ passports and those of their spouses (the pages containing the data and the photo of the holders and stamps of arrival to and departure from Cyprus).
  • Copy of residence permit and work permit of the applicants in Cyprus.
  • Application COMM 145, completed clearly and in full.
  • If the applicant is a company or a shareholder in an offshore company, it is necessary to submit the certificates of registration, of shareholders and of the registered offices of the Company.
  • If the applicant is a Company, a copy of the company’s Articles of Association must be submitted and written information must be furnished on the company’s activities in Cyprus and the staff it employs, both Cypriots and foreigners with the social insurance number.

Parparinos Milonas Corporate & Legal Consultants offer the following services:

  • Confirm that the person selling the property is its legal, registered owner.
  • Confirm that the property is free from any claims/encumbrances (such as a mortgage) and prohibitions. If the lawyer finds any encumbrances or prohibitions, they should advise buyers of the risks they present and possible steps that may be taken to protect their interests.
  • Confirm that the vendor is in a position to deliver title of the property to the buyer.
  • Ensure there is free and legal access to the property from a public highway/road.
  • Deal with buyers’ obligations to pay property taxes in a fair manner.
  • Draft and finalise the legal contracts.
  • Arrange for the payment of Stamp Duty and the stamping of the contract at the tax office.
  • Deposit the signed contract at the Land Registry for Specific Performance.
  • Ensure that the vendor pays any taxes due by him, thereby ensuring that a tax clearance certificate to be issued.
  • Check that the property is not affected by town planning proposal. Unlike the UK, getting a formal written statement from the planning authority is not possible. The best that can be expected is an informal, non-binding, off-the-record comment from one of the officers. A lawyer will be able to advise buyers about the zoning of the area, the building capacity and density, but not if a neighbour has applied for permission to start up a pig farm! And as the zoning may change, a lawyer would not be able to offer guarantees on this aspect of a purchase.
  • Facilitate the transfer of ownership of the property from seller to buyer and the payment of Property Transfer Fees.

For property that is bought before it’s been built or during construction, our firm will establish the credentials and credit worthiness of the developer and will confirm that the necessary town planning permission and the building permits have been issued for the construction of the property.

For resale of property our firm will ensure that the property is shown on the Title Deed and will obtain a structural survey and professional opinion on the asking price from a RICS surveyor.

For purchasing land, our firm will:

  • Establish the precise location of the land
  • Establish that the land may be used for the buyers intended purpose. As planning applications can only be submitted by the legal registered owner of the land, all that can be expected is an informal, non-binding, off-the-record comment from one of the planning officers
  • Obtain a survey of the land to assess its suitability for the buyers intended purpose.

For properties sharing common facilities such as entrance halls, stairways, exterior walls, swimming pool, tennis courts, gardens, etc. our firm can:

  • Determine whether the required administrative committee for the management of the common areas has been established.
  • Draft and finalise the legal contracts associated with the payment of management fees and insurance of the common facilities. (This only applies to resale property as there cannot be a management committee for properties that do not exist. For off-plan purchases, provision should be made for the establishment of such a committee with responsibility for common areas resting with the developer until such time as the committee is formed).

An IBC may also purchase premises for business purposes and for the residence of their foreign employees provided that they have a fully-fledged office within the Republic. The Council of Ministers (now the District Officer) may at times approve the acquisition of larger piece of property by foreigners subject to the land being used for tourist development and/or if this property is in an area where the State intends to promote the tourist industry. This approach is also adopted by the Republic within the Industrial sector.

Central Bank Exchange Control Regulations

From the 1st of February 1997 and onwards, the acquisition of property in Cyprus by foreigners and IBCs is not subject to the foreign exchange control. Thus, on disposal of the property the whole amount can be exported (after the tax obligations have been met). The Banking Law 1997 as amended, which establishes the legal framework within which banking business can be pursued, reflects the principles and rules of the EU directives on credit institutions. Furthermore, in accordance with the Prevention and Suppression of Money Laundering Activities Laws 1996 – 2004, the Central Bank is the supervisory authority for banks in this respect. In this connection, the Central Bank has issued a series of directives to banks concerning strict customer identification procedures, record keeping, recognition and reporting of suspicious transactions, the appointment and duties of money laundering compliance officers, and education and training of bank employees in anti-money laundering matters and in combating the finance of terrorism.

Land Registry Fees

Buying property in Cyprus

Land Registry Fees are levied by the Department of Land and Surveys upon the purchaser on the transfer of immovable property and are as follows:

At completion, you are required to pay Transfer Fees and in return, the District Lands’ Office issues a Title Deed bearing your name as the property’s legal and registered owner. At the time of writing, the fees are as follows:

  • 3% – on the first € 85,430
  • 5% – on the next € 85,430
  • 8% – beyond €170.000

Therefore for a home costing € 200,000, the Transfer Fees would be € 9,165.60; for a home costing € 400,000, the Transfer Fees would be € 25,165.60
If your Contract of Sale is in joint names (e.g. a husband and wife), the Property Transfer Fees are calculated as if you’d both bought a property of half the value.

Immovable Property Tax

Cyprus Property Law: Purchasing immovable property in Cyprus

Under the Cyprus ‘Immovable Property Tax’ laws all property owners, regardless of whether they’re resident in Cyprus or not, are liable to pay an annual tax based on the total value of all the immovable property registered in their name.

Cyprus’ property tax is calculated on the market value of the property as at 1st January 1980 and is paid annually to the Inland Revenue Department.

The tax is payable on the 30th of September of each year. Natural and Legal persons are both liable to this tax.

Calculating your Immovable Property Tax liability

If you have set up a company (a legal entity) to own a number of properties, the nil rate does not apply anymore. Below you can see the property tax rate table for the period 2008 until 2013 which is applicable until the moment of writing.

Year 2008-2011 From €0 Until €170.860,14 0‰
From €170.860,15 Until €427.150,36 2,5‰
From €427.150,37 Until €854.300,72 3,5‰
From €854.300,73 4‰
Year 2012 From €0 Until €120,000 0‰
From €120,001 Until €170,000 4‰
From €170,001 Until €300,000 5‰
From €300,001 Until €500,000 6‰
From €500,001 Until €800,000 7‰
From €800,001 8‰
Year 2013 From €0 Until € 40,000 6‰
From € 40,001 Until € 120,000 8‰
From € 120,001 Until € 170,000 9‰
From € 170,001 Until € 300,000 11‰
From € 300,001 Until € 500,000 13‰
From € 500,001 Until € 800,000 15‰
From € 800,001 Until €3,000,000 17‰
From €3,000,001 19‰

Capital Gains Tax

Cyprus Tax Laws

Any Capital Gain is liable to be taxed at the rate of 20%. Subject to certain conditions, individuals may claim the following deductions:

  • Up to €85,430 if the disposal relates to a private residence.
  • Up to €25,629 if the disposal is made by a farmer and it relates to agricultural land.
  • Up to €17,086 on any other disposal.
  • These deductions are granted once in the lifetime of the individual, until fully exhausted and if an individual claims a combination of them, the maximum deduction granted cannot exceed €85,430.


Under the law, certain disposals are not subject to Capital Gains Tax:

  • Transfers arising on death.
  • Gifts made from parent to child or between spouses or between up to third degree relatives. (A third degree relative is one with whom an individual shares about one-eighth (12.5%) of their genes. Third-degree relatives include your great-grandparents, great-aunts, great-uncles, and first cousins).
  • Gifts to a company where the company shareholders are members of the donor’s family and the shareholders continue to be members of the family for five years after the date of the transfer.
  • Gifts by a family company to its shareholders provided such property was originally donated to the company. The property must be kept by the recipient for at least three years. For gifts that were made by the company to its shareholders that took place before 28 May 1999, the exemption applies irrespective of how the immovable property was originally acquired by the company.
  • Gifts to charities and the Government.
  • Transfers as a result of reorganizations.
  • Exchange or disposal of immovable property under the Agricultural Land (Consolidation) Laws.
  • Expropriations (for example, if the property is compulsory purchased).
  • Exchange of properties, provided that a number of conditions are met:
    1. The Land Registry determines that the two properties are of identical value;
    2. The whole of the gain made on the exchange has been used to acquire the other property. The gain that is not taxable is deducted from the cost of the new property, i.e. the payment of tax is deferred until the disposal of the new property;
    3. The parties wishing to exchange have their Title Deeds;
    4. The exchange between the parties has to be simultaneous.

Property exchange is complex, and should not be attempted without professional assistance.
The base date for calculating the acquisition cost of property is 1st January, 1980. If the property was built after this date it is calculated backwards.


Under the law, the chargeable gain as adjusted for inflation, but certain lifetime exemptions apply to individuals for the disposal of their main residence:

Further allowances are granted for ‘Allowable Expenses’:

  • Property transfer fees.
  • Stamp duty.
  • Estate agent’s commission – but only if the estate agent is licensed by the Cyprus Real Estate Agents’ Association.
  • Legal fees.
  • Accepted capital additions and improvements – planning permission where necessary.

Indexation can be applied to the above expenses as well as the initial purchase price and must be submitted with invoices and receipts for the costs incurred.

Additional allowable expenses are also granted for:

  • Immovable Property Tax.
  • Interest on loans used to buy the Property, assuming that the interest payments have not been used to offset other tax liabilities; e.g. Income Tax.

These expenses cannot be indexed.

Stamp Duty

This is payable by you when you sign the contract – the rates are as follows:

Contracts with a fixed amount

As from 1 March 2013:

– the first €5.000                                                                                 0%

– between €5.001 – to €170.000                                                         1.5%

– above €170.000                                                                                2%*

*Capped at a maximum of €20.000 as from March 2013.

So as an example, for a property costing € 256.290 the Stamp Duty payable by you is € 427,58.

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