Purchasing real estate in Cyprus is becoming an increasingly popular choice among foreign citizens. In 2024, interest in the island continues to grow due to its favorable climate, low taxation, and stable economy. The process of buying property in Cyprus is straightforward, but it is important to consider all the details.
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Step 1: Choosing a Property
The first stage is to decide on the type of property. Cyprus offers apartments, houses, villas, and land plots. It is important to take into account not only your financial capabilities but also the location of the property. Prestigious areas like Limassol and Nicosia offer luxury properties, whereas Paphos or Larnaca may have more affordable options. You should also pay attention to infrastructure and proximity to beaches, which can affect living comfort or potential rental income.
Step 2: Finding a Realtor
It is recommended to seek a professional agent for property search. A licensed agent will help find a property that meets your requirements and ensure the legal integrity of the deal in cooperation with a lawyer. Many agencies in Cyprus specialize in working with foreign buyers. They provide support at all stages, from initial viewing to handing over the keys.
Step 3: Legal Aspects
The legal verification of property in Cyprus is a crucial step, involving several key points. It is essential to request the Title Deed from the seller, which confirms that the property is officially registered with the Cyprus Land Registry in the name of the current owner. The absence of this document may indicate potential issues with the property.
The next step is to check the property with the Land Registry. You must ensure that there are no encumbrances, such as mortgages or legal claims, that could prevent the transfer of ownership.
If the property is under construction, the title may only be issued 1-3 years after completion. Until then, the primary document confirming ownership is the sale contract, which is certified by the Land Registry.
Assistance from a licensed lawyer at this stage is crucial. They will help ensure the legal soundness of the deal and identify potential risks.
Step 4: Formalizing the Deal
After selecting the property and verifying the legal documents, the deal can be formalized. For purchasing real estate in Cyprus, it is recommended to open a local bank account and transfer the funds for payment. However, this step can be bypassed if you are purchasing new property from a developer, where funds can be transferred directly to the developer’s account from your foreign bank account.
Step 5: Payment and Registration
After signing the main contract, the buyer is required to make the payment for the property. When buying new property in Cyprus, VAT is applied. The standard rate is 19%, but a reduced rate of 5% can be applied to the first 130 square meters of property if the value does not exceed 350,000 euros and the total area is no more than 190 square meters. If the limits on area or value are exceeded, the standard VAT rate of 19% applies.
After all procedures are completed, the purchase is registered with the Land Registry. The stamp duty and transfer tax are paid only on secondary properties. The rate varies from 1.5% to 4%, depending on the property’s value.
Step 6: Obtaining Permission to Purchase
Foreign citizens need to obtain permission to purchase property in Cyprus. This is a standard procedure that requires submitting an application to the Council of Ministers. The process takes from 2 to 6 weeks.
Step 7: Taxation
When buying real estate in Cyprus, the buyer faces several types of taxes and fees. Key among them are the transfer tax and stamp duty, which are calculated based on the value of the property. Additionally, VAT applies to new housing, which can be reduced to 5% under the conditions mentioned above. VAT does not apply to secondary housing.
Why Should You Buy Property in Cyprus in 2024?
Cyprus continues to attract foreign investors thanks to its favorable conditions for living and doing business. In 2024, demand for housing on the island is expected to remain stable, ensuring good prospects for property price growth. Moreover, the mild climate, high quality of life, and convenient geographical location make Cyprus an ideal place for permanent residence or seasonal vacations.
Thus, while the process of purchasing real estate in Cyprus may seem complex, by following all the steps and with the help of knowledgeable professionals, the transaction will proceed smoothly. Cyprus continues to be an attractive investment destination, offering comfortable conditions for living and conducting business.
