Legal & Financial
The Central Bank of Cyprus requires that acquired property must be paid for with external funds. Bank transfers and personal cheques are accepted.
As a company, we are happy to discuss the individual needs for each prospective buyer with regards to methods of payment. Demonstrating maximum flexibility, Chrysostomou & Theocharous Developers can propose a method of payment that matches your circumstances. In-house financing with long-term payment schedules can also be discussed.
Chrysostomou & Theocharous Developers can arrange foreign currency loans for non-Cypriot citizens. Loan Conditions vary slightly from one bank to another, but generally, a loan for 70-80% of the property's value is granted, with a maximum repayment period of 15 years.

Legal Safeguards
The legal system in Cyprus is largely based on the British equivalent and safeguards the purchaser's right in many ways. Above all, for the purchaser's protection, the Land Registry in Cyprus provides a simple and effective legal instrument called the "Specific Performance". Once the Sales Agreement is signed and a deposit paid, the contract is registered at the land registry office. This procedure protects the purchaser's ownership rights until the title deeds are issued and transferred to their name. The contract, once held by the Land Registry, cannot be withdrawn by anyone, and therefore the property cannot be leased, sold, transferred or mortgaged. Only the purchaser is able to alter this status.
Transfer Fees

Transfer fees are a one-off payment borne by the purchaser and payable to the land registry in the district of your property’s location. The amount is based on a sliding scale as shown in the table below, and depends on the market value of your property on the date of purchase. The fee is due in cash when the title deeds are transferred into the purchaser’s name.

STAMP DUTY
One-off payment payable to the land registry in the district of your property’s location. Your lawyer will ensure this is transferred on your behalf. It is due within 30 days of registering the contract with the land registry.

Tax & Duties
Immovable Property Tax.
The registered owner is liable for this annual tax which is based on the value of his/her property as of 1st January, 1980. Property with a value of up to CY£100,000 is exempt from property tax. For property values exceeding this amount the rates are:

Stamp duty
A one-off stamp duty is levied on the purchase of property in Cyprus. The rates are dependent on the contractual purchase amounts and payment is due within 30 days of signing the Sale Agreement. The amount is payable by the purchaser to the tax authorities.

Capital Gains Tax
It is levied at the rate of 20% on gains arising from the disposal of immovable property.
As a general rule, the gain is the difference between the sales proceeds adjusted by a cessation allowance, less the original cost of the property, capital improvements and transaction costs of the sale. Generous exemptions also in place, e.g. net capital gains up to CY£ 10,000 earned from the disposal of your residence. 

Estate Duty / Inheritance Tax
These were abolished as of 1st January, 2000.

VAT
The VAT rate is 15% as of January 1st, 2003. 15% VAT is applied on Real Estate as of May 1st, 2004. 

Local Authority Tax
Property taxes levied by the local authorities are in the range of CY£ 30.00 - CY£ 100.00 p.a., depending on the size of the property. The tax covers the cost of refuse disposal, street lighting, etc.

Communal Expenses
Communal expenses cover an owner's share towards the cost of cleaning and maintaining a project's communal areas, gardens, swimming pool, management fees and repairs. These are payable at fixed intervals throughout the year and vary from development to development and from property to property. They are estimated to be in the region of CY£ 400.00 p.a.

Electricity & Water Supply
Utility bills for these services are payable to the appropriate authorities at fixed intervals throughout the year. They comprise a small standing charge and the individual consumption per household. For electricity this is CY£ 1.65 every 2 months plus 5.5 cents per kW/hr. Whilst the cost per property will vary, a rough guide for both might be approximately CY£ 300.00 p.a.

Foreign Direct Investment:

(a) Non - EU Citizens
The Government has in the past years relaxed the rules governing foreign non-EU citizen direct investments in Cyprus. The new regulations allow foreign participation up to 100% and provide a simple administration procedure and straightforward eligibility criteria, whereby in most cases applications for inward investment are reviewed by the Central Bank.

The industrial sector, the wholesale and retail trade sector, and the services sector are all open to non-resident investors. For the industrial, wholesale and retail trade sectors, the Central Bank handles applications where foreign participation is below 50%. Where foreign participation exceeds 50%, or the investment is more than CY£750.000, applications are handled jointly by the Central Bank and the Ministry of Commerce, Industry and Tourism. For services, up to 100% foreign participation is allowed and the Central Bank handles the applications. Services have been split into two categories depending on the minimum capital required for each company to be formed. The minimum capital can be either CY£50.000 or CY£100.000.
Investments in tourism are subject to the tourist policy applicable at the time. At present, this policy provides for up to 49% foreign participation in hotels, tourist villages, villas, etc., while 100% participation may be allowed for projects that enrich tourism, such as golf courses, theme parks, marinas etc..

(b) EU-Citizens
On January 7th of 2000, all the maximum allowable percentages of foreign participation as well as minimum levels of foreign investment in any enterprise in Cyprus (described above) were abolished, provided the foreign investors are citizens of EU member states. This new policy does not touch upon limitations applicable under other laws or regulations (e.g. this liberalization does not apply for the acquisition of immovable property). In addition, the maximum foreign equity participation of 50% in the banking sector remains.

(c) Fiscal and other incentives for foreign direct investors
Low Corporation Tax: Net profits are taxed at a rate of 20% for chargeable income up to CYP 40,000 and 25% for that in excess of CYP 40,000.

Low Income Tax: Expatriates employed in IBCs are charged low rates of income tax.
No Withholding Tax: Dividends paid by resident companies to foreign incorporated companies are exempt from withholding tax. In the case of physical persons, the tax withheld is credited against their own tax liability.

No Capital Gains Tax on profits generated by the sale of shares of companies listed on the Cyprus Stock Exchange (This applies until the end of the year 2001).

10-Year Tax Holiday: Profits resulting from the operation of auxiliary tourist projects such as golf courses, health centres, theme parks etc., are exempt from corporation tax for a 10-year period.

Equipment Tax Allowances: There are investment allowances for equipment and machinery used in the manufacturing sector and considerable wear and tear allowances covering both machinery and certain categories of hotel buildings.