Cyprus is situated at the crossroads of Europe, Asia, the Middle East and Africa making its location highly favourable as an ideal business centre. Furthermore as of May 1st 2004 Cyprus is a full member state of the E.U. has a safe and protective legal system, excellent infrastructure and extensive use of the English language are only some of the reasons that established Cyprus as favoured location for both business and pleasure and thus attracted to the island a considerable number of individuals and foreign investors interested in immovable property.
The legal system in Cyprus is generally based on the common law and our legislation is, to a large extent, modelled on the respective English legislation. However, in the field of Immovable Property, Cyprus Legislation and the legal system in general is considerably different from the one applied in the U.K.
The protection of ownership is safeguarded by the provisions of the Consitution, the ultimate Law of Cyprus, which establishes the equality of all persons and the respect for human rights, including the right to ownership, without discrimination.
According to Cyprus Law, Cypriots as well as foreigners can enjoy all rights relating to ownership of their property without any interference either from the State or from individuals.
Acquisition of Immovable Property
Under Cyprus law, Cyprus citizens as well as EU citizens who have their permanent residence in Cyprus are allowed to acquire any property without any restrictions.
The residential status is ascertained by the district offices and is obtained when a person resides in Cyprus for a total period of 185 days per year or more.
Foreigners and E.U. citizens who are not permanent residents in Cyprus, wishing to purchase immovable property in Cyprus, are obliged to adhere to special formalities and are restricted by certain regulations.
For foreigners living or working in Cyprus for a long period of time a permit to acquire a second house can be granted.
After the permission has been obtained and the property is registered in the name of the purchaser there are no other restrictions for the foreigner who is the owner of immovable property in Cyprus and he or she may sell or dispose of the property as they wish. The foreign owner of the immovable property can sell it and buy another as any bona fide repeat purchaser will be granted a subsequent permit.
Furthermore, the legal heirs of the said owner are not required to obtain a permit from the Council of Ministers in order to transfer the property on to their name.
Approval by the Council of Ministers
According to Cyprus law, foreigners must obtain the permission of the Council of Ministers prior to the acquisition of real estate property. Recently these powers have been assigned to the pertinent authorities of every district in order for the procedure to become speedier.
A foreigner, the law uses the term “alien”, is any person who is not the citizen of the Republic, including an alien controlled company. The term does not include the non Cypriot spouses of the citizens of the Republic.
Acquisition of real estate property includes:
Transfer of title deed;
Long lease for periods of more than 33 years;
The acquisition of shares in a company that owns immovable property, if such an acquisition results in the company becoming controlled by foreigners;
The establishment of a trust or any type of set-up which is connected with the ownership of the real estate, for the benefit of a foreigner, including tax benefits;
Although the proceedings for the obtaining of the permission might need a considerable amount of time to be fulfilled, purchasers are entitled to occupy their properties until then.
In addition to that, any contract for the purchase or lease of property is valid even if the pertinent authority rejects the foreigner’s request for a permit. As such, when purchasing a property it is advisable for the relevant contract to include provisions for such an event so as to secure a refund of any money paid or any other remedy.
The application to the pertinent authority requires information about the personal details and financial standing of the applicant and particulars of the property and its present owner. Also it must be accompanied by a number of legal documents.
As a general rule permission is granted to bona fide applicants provided they have:
No criminal record in their country or in Cyprus.
The financial means to support themselves in Cyprus.
- For registering the property under his/her name the purchaser is liable to pay the following transfer fees, calculated according to the property market’s value:
Market value (EURO)
|1. Up to EUR 85.430||3%|
|2. From EUR 85.431 to EUR 170.860||5%|
|3. Over EUR 170.861||8%|