yprus Property Law – Conveyance
In search of confidential, high quality, prompt and cost-effective legal services
Fitzgerald’s have been active in the Cyprus property market for many years. Purchasing or selling immovable in Cyprus, requires working closely with a legal professional to assist and advise the client. In the course of our business we have come to know many law firms throughout Cyprus who provide confidential, high quality, prompt and cost-effective legal services that meet the demands of the modern specialized legal practice.
Whilst Cypriot Law is based on English law, remember that you are in a different jurisdiction and although the law is similar buying property in Cyprus or selling property is Cyprus, apartment or villa for example, the working practices are inevitably very different. Often, there is a serious time constraint to gain relevant advice on sale of purchase so it is imperative to deal with a super responsive, knowledgeable, and proactive Cyprus legal professional to step in to assist. After all, property transactions are one of the most important undertakings for many people and getting it right is absolutely imperative.
Fitzgerald’s has specialized in resale properties with Title Deeds for many years and for very good reasons. The collapse of the Cyprus property bubble has amply demonstrated the value and importance of ’good’ legal advice and ‘good’ legal guidance is when buying or selling property. Cyprus property law is complex and there are also relevant constraints imposed by the legal system and/or allied agencies or Government Departments that need to be addressed. This makes it very important to appoint a legal professional to expedite the process efficiently and effectively and protect your interests when buying or selling property in Cyprus.
The individual feedback from our clients over time also confirms our opinion. Of course you are free to appoint any lawyer you wish, we merely want to assist you as much as possible so that your experience of property transactions in Cyprus is seamless, stress-free and rewarding.
Permanent Residency & Citizenship
Q. After obtaining permanent residency what are the conditions that need to be fulfilled before the person is entitled to become a national citizen?
A. A foreign national may obtain nationality either by marriage to a Cypriot national, Investment( in a nutshell €5.00 million and €0.5 million residence) or naturalization.
Obtaining Citizenship by naturalization means that the foreign national must actually reside in Cyprus for 5 years out of 7 years and that last year must not exit Cyprus, . 5 years out of 7 years mean 5 x 365 days.
Here follows an extract from the relevant application:
a) I have resided in the Republic of Cyprus or have been in the Public service of the republic, or partly the one and partly the other, throughout the period of twelve months immediately preceding the date of this application, and
b) during the seven years immediately preceding the periods of 13 months have whether resided in the republic or been in the Public service of the republic, or partly one and partly the other for the period amounting in the aggregate to not less than 4 years.
Visa requirements when travelling through Europe
Q. With permanent residency is it necessary to have a visa to enter Cyprus? If/when Cyprus joins the Schengen Zone, will the person need a visa to enter the Zone from a third country from Cyprus?
A. Once you are granted the PR Certificate you can freely enter Cyprus.
Once Cyprus joins the Schengen Zone, the usual Schengen Zone rules apply. Theoretically, you could enter ANY country within the Schengen Zone from a third country.
Permanent Residency and social welfare
Q. With permanent residency are they entitled to social welfare? What welfare, if any, are they entitled to?
A. Permanent Residency (PR) holders are not entitled to free medical care nor social welfare as theoretically they are of independent financial means and can support themselves without having to work in Cyprus.
Fixed Deposit requirement
Q. It is understood that a 30,000EUR deposit in a Cypriot account is necessary to secure permanent residency AND that the deposit is guaranteed under EU law. Is it possible to withdraw the amount, risk free, after a certain time limit?
A. The €30.000.00 three year fixed deposit requirement applies to Fast Track PR Applications under Rule 6.2. If the Clients are purchasing resale properties they would be applying under Category F. There is no Fixed Deposit requirement there but they should deposit an amount of €50.000.00 if we have a family of three people in a current account in Cyprus. These funds should stay in Cyprus during the duration of the examination of the application i.e. 8-12 months. There are no restrictions to movement of such funds after the PR is granted. €100.000.00 per depositor within one Banking institution is guaranteed by the Country in which the Bank is based.
Q. Besides the municipal monthly fee on the property is there any other taxes that need to be paid?
A. Refuse Collection, Immovable Property Tax, annually. Sewage Board annually in certain areas only.
Q. How is inheritance tax determined in Cyprus?
A. Inheritance tax in Cyprus has been abolished
Q. How is capital gains tax determined in Cyprus
A. the CGT rate is set at 20% of the chargeable gain realized from the sale of a property as adjusted for inflation, certain lifetime exemptions and other allowable expenses.
The profit is calculated as the difference between the sale price and the purchase cost less any interest paid on payments (e.g. housing loans) in the course of acquiring the property, the inflation rate as published by the government, services of registered estate agents, the costs of any approved additions to the property and certain personal allowances.
(A) Personal allowances which are provided and deducted at the time of calculating the gain made by selling the immovable property. These lifetime personal allowances are basically twofold. On the one hand everyone is entitled to the first €17.086.01 of profit from the sale of any property free of any imposition of CGT. However, under certain conditions if the property was in use by its owner(s) for a continuous and uninterrupted period of five years prior to its disposal and exclusively used for residential purposes and given that it is sited on land which does not exceed 1500 square meters, the maximum lifetime allowance is €85,430.07.
(B) Inflation: under normal circumstances, is entitled to an inflation allowance if the property was purchased after 01/01/80. For calculation purposes the consumer price index (CPI) is used for the month preceding the disposal of the asset and the month of acquisition. Inclusion and thus deduction of the relevant inflation allowance is normally done automatically by the tax officer at the time of his/her calculating the liability for CGT.
(C) Other allowable expenses: interest on loan used for the acquisition of the property, estate agents’ fees/commission (but only registered estate agents), professional charges, additions or improvements to the property after acquisition and before disposal of the asset.
On calculation of all allowances any gain above the maximum profit allowed, attracts 20% CGT.