Buying a property
Specialists of Crona property will help you go through all stages of buying a property. We will tell you in details how you can make a sale transaction of a property in the Cyprus market and will answer all your questions.
1. In order to be sure that the object you have chosen will not be sold to another person, the Buyer should make a deposit,
after which the object is withdrawn from sale and reserved for the buyer for 1 month.
2. The buyer makes a contract to accompany the transaction with a Cypriot lawyer, after which he can easily go home,
while the lawyer will complete the transaction:
- Check all documents
- Organize the release of apartments from taxes (if any)
- Prepare a contract and confirm it with both parties.
3. The lawyer will inform the buyer about all the details of a deal, and with full agreement, the buyer must return, for the final signing of the contract of sale and purchase and make the first payment. If you issue a general power of attorney to a lawyer, then he can finish all the steps himself.
4. Crona Property together with a lawyer makes all necessary payments and when the contract is deposited,
the lawyer prepares an application for VAT benefits and an application for permission from the Council of Ministers of
the Republic of Cyprus to purchase real estate.
5. After receiving all permits and approving benefits (if any), the buyer pays the remaining amount and receives the keys
of his new property.
6. After verifying all documents, the Land Committee issues a Certificate of Ownership to the new owner.
Depending on the conditions and wishes of the buyer, the points of transaction can be different if:
- The purchase of real estate is carried out on credit.
- Buying a property under construction.
VAT on the purchase of real estate in Cyprus
When buying a new Cyprus property VAT payment is required. The VAT rate in the territory of the Republic of
Cyprus is 19%. Since November 18, 2016, a preferential rate is 5% for the first 200 sq. m. living area, according to the architectural plan approved by the official authority of the Republic of Cyprus.
You can also get a reduced VAT rate if you meet the following criteria:
- The buyer must be an individual (not a legal) entity who has reached the age of 18.
- Purchased real estate should be the main place for the applicant's residence in Cyprus.
- The applicant is not required to have property acquired earlier at a reduced VAT rate.
- This property will be used only for the residence of the applicant, and not for the purpose of deriving income (for example, from renting).
- A buyer applying for a benefit must sent an application to the VAT Department for the VAT exemption. Together with the application, it is stated that previously they did not acquire another property in Cyprus at a reduced VAT rate.
- In case the applicant is married, the spouse must also submit a similar application and a declaration.
LIST OF DOCUMENTS FOR OBTAINING A BENEFICIAL VAT RATE
- Contract of purchase / sale of real estate
- Copy of the applicant's passport
- Copy of the spouse's passport if the applicant is married
- Certificate of marriage if the applicant is married
- Architectural plans for real estate
- Declaration confirming the appropriate size of the property, endorsed by the architect, or civil engineer
- Certified copy of building permits
Documents confirming that the applicant uses the property as the main residence in Cyprus:
- Copies of electricity bills
- Copies of water bills
- Copies of telephone bills (Internet)
- Copies of municipal tax bills
- Any other documents confirming the use of this object, as the main residence in Cyprus
The above-mentioned documents can be submitted to the VAT Department not later than six months from the date of
their issue and are part of the application for the VAT exemption.
There are also additional taxes.
Tax on transfer of ownership (Transfer Fee)
In order for the buyer to become a registered owner of real estate, the State must issue a Title Deed to the purchased real estate and then transfer it to the buyer's name.
This process is accompanied by the payment of tax to the state, which is called Transfer Fee. The tax is calculated from the value of the property specified in the contract (excluding VAT).
The real estate price, €
VAT rate, %
from 85.001 to 170.000
Tax on the transfer of ownership should be paid, only in case of buying a secondary real estate. For primary real estate (taxable VAT), Transfer Fee is not charged.
Stamp duty is a state duty for the purchase of real estate and is paid out one-time within thirty days from the date of signing the contract of the purchase of real estate.
Stamp duty is 0.15% of the amount of the contract (excluding VAT), not exceeding € 170.000, and 0.2% of the amount exceeding € 170.000. For the first € 5,000 The stamp duty is not levied.
Annual Property Tax
Since the beginning of 2017, the Annual Property Tax has been completely abolished.
Electricity in Cyprus
The Electricity Authority of Cyprus (EAC) is an institution that organizes electricity supply in Cyprus and establishes unified tariffs for electricity on the island.
There are two types of tariff: one-rate and double-rate. At the first tariff, the cost of electricity during the day is the same. In the second variant, electricity is more expensive during the day, and at night - cheaper.
Kilowatts are taken in calculation, and bills are received every 2 months. At your request, the EAC office will send you bills every month (this is especially convenient for those who plan their monthly budget). Except the kilowatt you consume, VAT and fixed rates will be included in the bill.
On average, if you calculate VAT, fixed rates and home billing, 1 kW of electricity costs 0.2 euros (approximately). With a high electricity consumption, the cost per 1 kW decreases.
Electricity bills are sent by regular mail or by e-mail (at their request). You can pay bills in cash, by check or by card - at the bank, at the ATM, at the EAC office, and, of course, via theInternet.
Water in Cyprus
Water supply issues on the island are handled by the Cyprus Department of Water Development, but each district has its own department, which assigns its own water tariffs.
Bills received every quarter and sent by post. You can pay bills in cash, by check or by card - in the bank, ATM, in the water supply office. Tariffs for water will vary depending on the area.
The approximate cost is about 0.9 euro per 1 m3, but with increasing consumption, the cost increases. This information applies only to cold water, because there is no central supply of hot water on the island. Special equipment is installed on the roofs, in the form of two tanks for cold and hot water, as well as additional devices. In the hot season, water is heated only by the sun. In the cold period, when the intensity of sunlight is not enough to heat water, it is heated with a boiler.
TELEPHONE AND INTERNET
There are several companies that provide telecommunications services in Cyprus, such as CYTA, Primetel, MTN.
Subscription fee for using the services of these companies is approximately 50 euros per month.
HEATING AND AIR CONDITIONING
In Cyprus, the rooms need to be heated for 3 - 4 months. During this period, electricity is needed for heating the water. Heating can be done both with electricity and with gas.
The hottest period in Cyprus is from June to September. It turns out that during this time it is necessary to put an air condition at the rooms. The cost of heating and air conditioning is quite individual.