Contract of sale
The lawyer is responsible for preparing the contract of sale and is obliged to enter the terms, conditions and terms of the contract in a fair manner in order to protect the interests and rights of the client and to ensure the accuracy of the property information and documents by inquiring about the legal documents of the property. . The lawyer is obliged to ensure that all the details in the document match the details of the property and also to make sure that the property can be sold to the buyer. Once the draft contract has been prepared with the buyer’s consent and approval, it will be signed by the buyer himself or by a lawyer who has a power of attorney. Granting a lawyer power of attorney enables him or her to complete all stages of the transaction, including additional actions and other documents.
Once the contract is signed, the buyer is responsible for paying the tax stamp duty. For example, if the contract value is € 300,000:
- There is no stamp duty fee for the first 5,000 euros.
- The next € 165,000 is calculated at a rate of € 1.50, ie € 247.50 = 1,000 ۵ 1.5x 165,000
- The next € 130,000 is calculated at a rate of € 2,000, ie € 260.00 = 1,000 ÷ 2.0x 130,000
These costs must be paid within 30 days of signing the contract to avoid being fined.
Registration of the sales contract in the Real Estate Registry
From the date of signing the contract, the buyer has the right to register the contract with the Real Estate Registry within 6 months, this is due to the existence of the law “Special Performance Objectives”. This is very important for the protection of the buyer’s rights, and there are two main reasons for doing so: By registering a contract with the Real Estate Registry, the buyer prevents the transfer of immovable property to third parties and gains the right to search the special performance system. Also, even if the seller does not want to participate in such processes, the right to transfer real estate to the buyer is reserved.
Property units that received their license before May 1, 2004 are exempt from VAT. Since Cyprus joined the European Union, VAT, which currently stands at 19%, has been paid when a buyer buys land or a house.
However, buyers who buy a home will be required to pay 5% VAT if they meet the following conditions:
- The license application was made after 01/05/2004.
- The buyer uses the purchased property as her main and permanent residence in Cyprus and does not own any other property in Cyprus.
- 5% VAT is applied only for the first 200 meters of the property.
Total area: means the total area of the property, including the engine room, parking lot and balcony.
In real estate transactions, the transfer of ownership is done through a simple registration process at the Real Estate Registry and the buyer is responsible for paying the transfer fee.
- Buyers who are subject to VAT and pay it are exempt from paying the transfer fee.
- Transfer costs for buyers who are not subject to VAT on real estate will be reduced by up to 50%.
Up to 85,000 euros, 3% € 85,000.01 to € 170,000.00, 5% 170,000.01 and up, 8%
Capital Gains Tax
Any financial gain resulting from the sale of real estate in Cyprus must be subject to a 20% capital gains tax, with an initial exemption of € 17,086 per person. Profit is the difference between the sale price and the original price of the property. If the property was purchased before January 1, 1980, the profit is the difference between the sale price and the market price of the property on January 1, 1980.
The seller has the right to include the annual inflation rate and any additional costs imposed on the home in its price, depending on the transfer costs paid.
Profit from the transfer or sale of private property in which the pre-sale owner resides for 5 years and is permanently exempt from capital gains tax of up to € 85,430.
Inheritance tax is obsolete in Cyprus.
Cost of local references
Depending on the size of your property, local authorities may charge between € 85 and € 500 a year for garbage collection, street lighting, sewage and similar services. You can pay for public services to your local municipality.
As a registered owner, you must pay an annual fee as municipal tax, which is calculated based on the market value of the property on January 1, 1980. Rates vary from 1 to 2 percent.
You can pay municipal taxes to your local municipality.
As a registered owner, you must pay an annual fee as a sewage tax, which is calculated based on the market value of the property on January 1, 1980. Rates vary from 3 to 7 percent.
You can pay the sewage tax to your local municipality.