Cyprus - Cyprus

Article Date: 2007-11-26

Cyprus is known for its traditionally warm and welcoming residents who have a gift for hospitality and who reside on an island encompassed by beauty, splendour and genuine relaxation. Cyprus boasts a remarkably low crime rate and this makes visitors feel easily at ease. The pace is leisurely and it is a viable and a fruitful option if one is searching for relaxation. The climate is a welcoming feature as it averages temperatures of between 21C minimum and it boasts 300 days of sunshine per year.

Whilst there are no hard and fast rules governing the purchase method of property in Cyprus, one will typically buy through an agent or developer, or a partnership of both. Agents typically charge the buyer a commission of 5% - an extra 3% may be charged if a developer is also involved. Fees do become more negotiable when the market subsides.

Obtaining finance for a property purchased in Cyprus is straightforward. Most banks speak fluent English and will lend between 60% and 80% of the value of the property with the term usually fixed at seven to ten years, although longer repayment periods can be negotiated. It is generally difficult to obtain a Cyprus mortgage from a non-Cyprus bank. The country's accession to the EU means in theory that any restrictions on capital transfers or interest rates should no longer apply.

There are a number of taxes that are associated with the purchase of property in Cyprus. First, there is a Real Estate Transfer Tax. This is necessary to transfer the freehold into the name of the buyer and is levied on a progressive scale up to 8%.

For residents there is an Immovable Property Tax based on the value of the property at a rate of 0.2% between CYP100,000 and CYP250,000; 0.3% up to CYP500,000; and 0.35% over CYP500,000. The first CYP100,000 is exempt. The buyer is also liable for stamp duty. Depending on the size of the property, local authority taxes per annum vary, and cover refuse collection, sewerage, street lighting etc. When the time comes to sell, capital gains tax is charged on disposals of real property in Cyprus and shares in companies owning real property in Cyprus.

There are no fixed rules governing the purchase of property, although one will typically buy through an agent or developer, or a partnership of both. Agents typically charge the buyer a commission of 5%, although an extra 3% may be charged if a developer is also involved. The land registry system is somewhat bureaucratic and best tackled by a professional representative. Hence, it is more advisable to work through an agent. It also enhances one's piece of mind when all the legal bases are covered and one can rest assured in the knowledge that you'll soon be a part of the furniture in the villa!

Written by Janine B © Asset-Property.com

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