BUYing a property in cyprus
Crona Group specialists will help you go through all the stages of real estate purchase. We will tell you in detail how you can make a transaction for the sale and purchase of a property on the island of Cyprus and will try to answer all your questions.
- In order to be sure that the object you have chosen will not be sold to others, the Buyer should pay a deposit, after which the object is removed from the sale and reserved for the buyer for 1 month.
- The buyer enters into an agreement to support the transaction with a Cypriot lawyer, after which he can safely leave home, while the lawyer will complete the transaction:
- check all documents;
- arranges tax exemption for housing (if any);
- prepare a contract and coordinate it with both parties.
- The lawyer will inform the buyer about all the details of the transaction, and with full agreement, the buyer must return, for the final signing of the sales contract and making the first payment. If you issue a general power of attorney for a lawyer, then he can complete all the stages on his own.
- Crona Group together with a lawyer makes all the necessary payments and when the agreement 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.
- After obtaining all permits and approval of benefits (if any), the buyer pays the remaining amount and receives the keys to his new property.
- After checking all the 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 the transaction may differ if:
- Real estate purchase is carried out on credit;
- Property being bought is currently under construction.
VAT on the purchase of real estate in Cyprus. Cyprus property taxation
When buying a new property in Cyprus, you must pay VAT. The VAT rate in the Republic of Cyprus is 19%. From November 18, 2016, a reduced rate of 5% applies for the first 200 m2 of living space in accordance with the architectural plan approved by the authorities of the Republic of Cyprus.
On June 16, 2023, the Cabinet of Ministers changed the law on a reduced preferential VAT rate of 5%, according to which a preferential rate of 5% applies to the first 350 thousand euros of the value of real estate, while its total value should not exceed 475 thousand euros. The preferential rate also applies to the first 130 sq.m. real estate area, while its area should not exceed 190 sq.m.
These rules on areas and prices do not apply to buildings for which an application for urban planning was submitted before October 31, 2023, and the corresponding application for a preferential VAT rate was submitted within 3 years from the date of adoption of the new law (i.e. until 06/16/2026 ). In this case, another rule applies, namely: a preferential rate of 5% applies to the first 200 sq.m. real estate area, regardless of its price and area
The requirements for the property and the Applicant/Buyer to receive the preferential VAT rate must meet the following criteria
- The buyer must be an individual (not a legal entity), have reached the age of 18.
- The property being bought should be the main place to live applicant in Cyprus.
- The applicant must not own real estate previously acquired by preferential VAT rate.
- This property will be used exclusively for the applicant’s residence, and not for the purpose of generating income (for example, from renting out).
- A buyer claiming a benefit must submit to the department
- VAT application for the application of VAT exemption. Together with the application is submitted declaration that he has not previously acquired other property in Cyprus at a reduced VAT rate.
- If the applicant is married, the spouse will also must submit a similar application and declaration.