Frequently Asked Questions
So you want to sell your Cyprus home?
Whether it is your family residence that is being upgraded, a work-related relocation that caused the need to move or a pre-planned financial profit opportunity that suddenly materialised – there are ample reasons you may wish to sell your property in Cyprus. Here we will introduce some important considerations for you to ponder, in order to make the process most efficient and least stressful.
The legal system of the island is based on the British Common Law. Nevertheless, the need to hire a professional is real, as there are distinct differences in legislation nowadays and taxes are calculated very differently.
Thankfully, the island boasts a large number of professionals of the highest caliber that we would be delighted to introduce you to. You will find the qualifications outstanding and the fees reasonable, of that we are sure.
Your selected professional will walk you through the proper calculations of the market value of your property, ensure that the sales contract does not infringe upon your rights, navigate you around the various authorities’ intricate requirements and ensure that your tax base is adequately derived and any duties are paid promptly.
Once the sale contract is concluded and the price is agreed and settled, there comes a need to deal with the most bureaucratic part of the sales process, the transfer of the legal title to the property, i.e. Title Deed.
This step presumes that all taxes, fees and charges have been settled and thus, requires proof of such settlements. Namely, you would need to satisfy the authorities that the following payments to the authorities have been settled up until the date of transfer:
- Immovable property tax
- Local taxes (e.g. refuse collection, sewerage board fees and community/municipality rates)
- Capital gains tax
- Land Registry Fees.
All of the above are typically upon the Seller to settle up until the property passes on to the new proprietor and proof of such settlements must be presented to the Land Registry, in form of receipts and special forms (e.g. Declaration of Transfer of Immovable Property Form N.270 and Completion of Form N.313 for everything else).
Clearance certificates are then issued and the sales purchase contract is lodged with the Land Registry, along with such certificates, as well as the new Title Deeds, formally securing the transfer of property.
Though the above process is not too complicated, as far as bureaucratic procedures go, it is common to appoint an attorney to finalise the procedures, via a Power of Attorney. This saves queuing times at the Land Registry and trips to various government institutions, including local authorities of your particular district, for the necessary paperwork.
Formally the Department of Land and Surveys is essentially a knowledge base for all immovable property in Cyprus. It is a publicly accessible database, so anybody that is considered an “interested person” is likely to get easy access to the information they require, after paying a nominal fee. This list of interested persons will include:
- Proprietors
- Potential owners
- Beneficiaries or legal attorneys of proprietors/potential proprietors
- Persons engaged in a lawsuit with proprietors
- Valuation experts
- Financial institutions that hold properties, as collateral.
Hence, it is crucial to keep in mind that forgoing the transfer of Title Deeds processes is neither advisable nor possible, in practice.
Potential buyers would typically gain access to such information by way of written authorisation or confirmation from sellers or by depositing a contract of sale at the Land Registry. As such, they can easily find out about any charges or mortgages on the property, which is important to keep in mind.
Speaking of mortgages, securing financing on your property without the proper lodging of Title Deeds at the Land Registry is impossible, so there is something to consider for future buyers.
Failure to properly record the transfer of the property at the Land Registry may make the Seller responsible for local taxes and collections payments even after the sale.
The Land Registry has a set of charges for information to be provided but should such charges not be explicitly priced, there is a flat rate of EUR15 per hour to obtain it.
A. Capital Gains Tax – 20%
As you would expect, the 20% is levied on the taxable base of the profit made on sale. That means that there are a number of allowances that can be deducted from the sales price, namely:
- Interest paid on any mortgages on the property
- Inflation, as published by the government, if the property was purchased after 01/01/80
- Cost of acquisition
- Cost of any approved addition/improvement to the property
- Fees of registered real estate agents
- Personal allowances, including:
- Universal first deduction of €17.086.01 from the amount of profit
- Total of €85,430.07 deducted from profit, if the property was a personal residence for over 5 years and occupied less than 1,500 m² of land.
B. Transfer Fees for Immovable Property – between 3-8%
There is a calculator for the approximate fees on the official government website but care must be taken not to rely on it entirely, as a number of concessions exist, depending on VAT payments and date of acquisition. For example, see below:
The fees charged by the Department of Land and Surveys for the transfers of immovable property are:
| Property Price | Rate | Fee | Cumulative Fee |
|---|---|---|---|
| First €85.000 | 3% | €2.550 | €2.550 |
| €85.001 to €170.000 | 5% | €4.250 | €6.800 |
| Over €170.000 | 3% |
Properties purchased between the 2nd of December 2011 and 31st December 2016, which are subject to VAT will be exempt from the above transfer fees. Properties not subject to VAT will be eligible for a 50% exemption from the above transfer fees. For instance:
| Example 1 | Example 2 | ||
|---|---|---|---|
| No transfer fees payable for properties with VAT | 50% transfer fees payable for properties w/o VAT | ||
| Property Price (net of VAT) | €500.000,00 | Property Price | €500.000,00 |
| Transfer fee | €33.200,00 | Transfer fee | €33.200,00 |
| Transfer fee now | €0,00 | Transfer fee now | €16.600,00 |
| Saving | €33.200,00 | Saving | €16.600,00 |
First and foremost, you need to select a good partner to help you navigate all of the above intricacies.
At The Property Shop we offer you a “turnkey” solution to all your concerns with respect to the sale of your property. Let our qualified staff inspect your premises and identify the strengths, weaknesses and “to-do” items prior to the listing.
We will inspect the outdoor areas, check the pool and garden to ensure they make the right impression. We will assess the front entrance, as this is often the first proper glance into the property and can be a deal breaker. Once inside, we will ensure that the living areas are presentable, advice on the right amount of clutter that won’t detract from the property and draw your attention to some other key components of a good “house for sale”.
We will ensure that any repairs, maintenance and cosmetic changes to your home are done efficiently, with taste and beneficial to the overall appeal of your property to its next owner. We will supervise and monitor the works, too.
We at The Property Shop will always provide the best legal advice from qualified professionals, which will be transparent, relevant, providing “value for money” and adequate. All fees and disbursements will be properly disclosed, be it for the review of the sales contract or a Power of Attorney for dealings with the Land Registry.
With The Property Shop you are in good hands and we will endeavor to make your Cyprus sale a flawless one.