Cyprus Property Purchase and Residential Information, The Correct way to Purchase a Property in Cyprus

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(1888PressRelease) February 17, 2010 - CYPRUS is situated in the North East corner of Mediterranean and due to its location, enjoys the best of Mediterranean climate. Cyprus is at the crossroads of Western and Eastern civilizations, its local architecture, traditions and theme of life combine the best of what the two worlds have to offer, it is a place where everyone is welcome and made to feel at home.

Cyprus has more to offer than just sun, sea and sand, is full of mythological and legendary stories of old and boasts wealth of history, archeological sites and monuments.

The land of smiling faces, where the sea blends with the mountains, the hills slope to deserted bays and beautiful sandy beaches, offering the visitor and resident peace, tranquility and the feeling of eternity.

Experience a kaleidoscope of colours in the springtime, the summer full of blue skies and sunshine and the all year round amazing sunsets. Shake hands with people whose reputation for hospitality and excellent food is world-renowned and you will want to stay forever. For many living in Cyprusl it has bought a new zest for life, where every day brings new and special pleasures.

Nicosia, known locally as Lefkosia, is the capital and largest city of Cyprus, with population 270,000.

Located on the River Pedieos and situated almost in the centre of the island, it is the seat of government as well as the main business centre. Nicosia is the capital of the Nicosia District.

Limassol was built between two ancient cities, Amathus and Kourion, so during Byzantine rule it was known as Neapolis( new town).

It is the second-city of Cyprus, with population of 176,900 (2005), the largest city in geographical size, and the biggest municipality of the island. The city is located on Acrotiri Bay, on the island's southern coast and it is the capital of Limassol District.

It is the biggest port of the Mediterranean transit trade. Limassol has since then become one of the most important tourism, trade and service-providing centre in the area.

Larnaca, is a city of the Republic of Cyprus situated on the southern coast of Cyprus. The major international airport, Larnaca International airport is located in this city. It has a population of 72,000 and is the island's second commercial port and an important tourist resort.

Paphos, is a coastal city in the southwest of Cyprus and the capital of Paphos District. The town of Paphos is included in the official UNESCO list of cultural and natural treasures of the world's heritage.

CLIMATE
Climate plays an important part when planning to live or invest overseas. Being sheltered from the north by the Troodos Mountains, Cyprus enjoys short mild winters and long warm summers. Temperatures rarely drop below 16 degrees and with 320 days sunshine throughout the year; it is without question, the finest climate on the island.

STANDARD OF LIVING
A few days on the island will help you realize that Cyprus enjoys a high European standard of living remains low. The currency in Cyprus is the EURO. Shopping in Cyprus is never the rush and strain it appears to be in other European countries. It is casual and enjoyable, filled with friendly conversation and a relaxed atmosphere. Cyprus also offers a wealth of Duty Free privileges.

MEDICAL SERVICES
Health care in Cyprus is of a very high standard and is not expensive, with the majority of doctors having qualified in the UK and the USA. Along with General Hospitals there are many private clinics and medical centers in Cyprus with highly qualified physicians and surgeons, covering every field of medicine. Health insurance policies can be arranged through our Law Offices with a European Company such as BUPA.

ENVIRONMENTAL CHOICES
In Cyprus, there is a wide choice of environments in which to live. You may choose to live in the town or village, near the coast or in the coastal hills.

RELIGIOUS SERVICES
Whilst Cyprus is mainly a Christian Orthodox Country, Anglican and Catholic services are held in every city of the island.

CRIME RATE
According to Interpol statistics, Cyprus has a crime rate, which is only one sixth of the average rate of other European countries.

You will find the people rarely lock their cars, they live their windows and doors open and this is due to the friendliness and honesty of the local population. Living in Cyprus will mean you can enjoy personal security and not have to turn your home into a fortress.

LANGUAGE
Language is another important factor when one is considering living or investing abroad. Cyprus was once a British colony, resulting 90% of the population speaking English, making living in Cyprus less stressful than living in other European locations.

EDUCATION
There are primary, junior and secondary schools in Cyprus that cater for European students and they are of very high standards. The international schools of Cyprus follow the UK curriculum and achieve excellent GCSE and "A" level results. The schools also have facilities for boarding students.

MEDIA AND COMMUNICATIONS
Programs on television and radio are both in English and Greek including the news broadcasts. Satellite dishes can be installed offering hundreds of different channels. Postal and telephone communications in Cyprus are both efficient and economical and now full Internet services are available on the island. All this with the availability of most British and international newspapers can make you feel at home on this beautiful island.

FAMILY PETS
Your dog or cat can come with you to enjoy your new property in Cyprus, provided that they have had all their vaccinations. The best part of all is that your dog or cat does not have to be quarantined under the new European laws. This can be checked with your local vet in the UK or other European Countries.

BANKING
The Banking system in Cyprus is modeled on the British system. The various banks have many convenient branches and they are efficient, modern and equipped with the latest technology. Non-Cypriot citizens may open a foreign currency account and a local deposit or current account without any difficulty.

LEGAL SYSTEM
The legal system in Cyprus is largely based on the British legal system. The land registry is advanced and reliable and is also based on the British equivalent. Purchasers of property in Cyprus will be far more secure, with regard to matters such as title deeds, than they might be in other European countries. All relevant information regarding the legal procedures in Cyprus is available from CHM Lawyers- Legal Consultants.

PROPERTY OWNERSHIP
If you are of Cypriot origin then there are no restrictions. Also, E.U. citizens who have their permanent residence in Cyprus (the residential status is ascertained by the District Offices and is obtained when a person resides in Cyprus for a total period of 185 days per year or more) can buy a property without any restrictions.

After May 2009 all E.U. citizens will be treated the same as Cypriot citizens, in spite of their residential status. For the time being they can buy only one apartment or one house or unlimited building plot or land.

Citizens from the rest of the world, who wish to buy a property in Cyprus, can only buy one apartment or one house or a building plot or land approximately three donums (4,014 square meters).

International Business Companies may also obtain a property for their business and for the residence of their foreign employees after they provide that they uphold an authorized office.

MORTGAGES & LOANS
All commercial banks in Cyprus are authorized to offer mortgage facilities to assist in the purchase of property.

The loan will be either in EURO or in foreign currency.

The amount ranges from 70%-80% of the value of the property depending on proof of income with a repayment period ranging up to 20 years.

Easy terms of payments and long-term in-house finance schemes are also available.

The normal charge is the basic +3%. In the case pf a mortgage, then there are mortgage fees involved, which are calculated at 1% on the mortgage amount.

APPROVAL BY THE COUNCIL OF MINISTERS
Foreigners must acquire a Council of Ministers approval when they buy a property in Cyprus. The reason of this approval is to protect Cyprus from allowing foreigners that cannot support themselves financially, to reside in the Country.

A license must be obtained from the Council of Ministers allowing you to acquire such property, in accordance with the Immovable Property Acquisition (Aliens, An Alien is defined in section 2 of the Cap.109 as an individual who is not a Citizen of the Republic of Cyprus) Law.

Permanent residents also need a form of permission, but the process is simplified as permission will already have been granted for residence by the issue of a "pink slip".

The application is processed after the Contract of Sale is signed and the procedure may take several months 3 or more. In the meantime, there is no restriction in taking possession of the property.

As a general rule, permission is granted to bona fide applicants provided they have:

No criminal record in their country or in Cyprus
The financial means to support themselves in Cyprus, proof of investments and/or nominal annual income/pension is required.
Details of the Property
Information of the present owner , the Sales Contract and terms of payment
The method of acquisition, for example if it's a Freehold, Long Lease, by Share etc.

STAMP DUTY FEES

The purchaser is liable for the payment of stamp duty at the rate of 0.15% per thousand up to the value of CYP 100.000-EURO 170.860 and thereafter at the rate of 0.2% per thousand.

This should be paid within 30 days of the signing of the contract.

To illustrate this, assume the purchase price of the property is CYP 150.000-EURO 256.290.22!!

First CYP 100.000-EURO 170.860 stamp duty is payable at 0.15% = CYP 150 - EURO 256.29

Remainder CYP 50.000 stamp duty is payable at 0.2% = CYP 100 - EURO 170.86

TOTAL = CYP 250 - EURO 427.15

Although the absence of the revenue stamp on a contract does not render it void, the revenue stamp must be paid before depositing the contract to the Land Registry for Specific Performance purposes.

SPECIFIC PERFORMANCE

Under the Specific Performance Law, a purchaser of immovable property may secure the remedy of specific performance by depositing a duly stamped copy of the contract of sale land with the Land Registry within two months from the date of its execution.

By depositing the contract in the Land Registry, the Purchaser prevents the owner from transferring the property elsewhere or changing it, for as long as the contract is valid and legally effective. No burdens, charges or encumbrances can affect the right of specific performance after the contract has been deposited with the Land Registry.

Depositing a copy of the contract to the Land Registry gives the Purchaser the right to seek "specific performance" of the terms and conditions of the contract and thus to register the property onto the purchaser's name, even though owner may not willing to accommodate such procedures, whereas, if the contract is not deposited to the Land Registry the only remedy for the breach is damages.

Also, "specific performance" is particularly useful as many purchasers are more than happy to have the security it brings and delay the issuance of Title Deeds for as long as possible to avoid paying the Transfer Fees!!!

LEGAL SAFEGUARDS FOR FOREIGN INVESTORS

Contrary to the risks inherent in the purchase of property in some countries, Cyprus has never been involved in the nationalization of any sector of the economy, or in the expropriation of property owned by non-Cypriots. Indeed, the Republic has often guaranteed foreign investments jointly and severally with local participants- consistent with its efforts to create a favorable climate for such investments.

TRANSFER OF PROPERTY

The transfer of immovable property into a Purchaser's name can be effected once permission to acquire the said property has been granted from the Council of Ministers/Pertinent Authority.

Transfer of ownership from Vendor to Purchaser is undertaken by a simple procedure through the Land Registry Office, either by the buyer in person or by appointing a third party with Power of Attorney.

Upon transfer of property and registration in the purchaser's name, the District Land Registry Office will charge Transfer Fees, which are based on the market value of the property at the time of purchase, and are calculated as follows:

Value of Property EURO Transfer Fee Rate (per hundred %)
Up to 85.430 3%
From 85.431-170.860 5%
From over 170.860 8%

For example if the purchase price is EURO 153.774:

The First EURO 85.430@ 3% = 2.562
Next EURO 68.344@ 5% = 3.417
TOTAL
5.979

If the purchase be made in joint names (provided the price is more than EURO 85.430) the effective value for calculation is halved, which results in reduced transfer fees.

For example if the purchase price is EURO 153.774:

1st Buyer Euro 76.887@ 3% = 2.306
2nd Buyer Euro 76.887@ 3% = 2.306

TOTAL
4.612

TAXATION
Immovable Property Tax

The annual immovable property tax is imposed on the market value of the property as at 1st January 1980, and applies to the immovable property owned by the taxpayer on 1st January each year.

Market Value Property (EURO) Annual Property Tax (%oo)
Up to 170.860 -
170.861 to 427.150 2.5
427.251 to 854.300 3.5
Over 854.300 4.0

Capital Gains Tax
On gains from disposal of immovable property situated in Cyprus, capital gains tax will be imposed at the rate of 20% with the first EURO17.086 being exempt for each person. The gain is the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as 1/1/1980.

The seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a private residence are exempt up to EURO 85.430 in total if the owner resides in it continuously for at least five years prior the disposal.

Gains from the disposal of a dwelling house are exempt up to EURO 85.430 in total if the owner resides in it continuously for at least five years prior to disposal.

Local Authority Taxes and Rates

A rough guide could be approximately EURO 85.43- 256.29 per year depending on the size of your property.

The tax is for refuse collection, street lighting, sewerage, etc.

The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

Estate Duty
The Estate Duty law was abolished on 8 June 2000 in relation to individuals who died on or after 2000. (Statute No. 78(1)/2000)

With effect from 1st January 2000 the administrators of the Estate must submit to the Commissioner of Income Tax a statement of assets and liabilities of the deceased person.

SELLING YOUR PROPERTY
In the event that the purchaser should wish to sell a property at some time in the future, the funds / profits from the sale can be repatriated easily to the value of the purchase price including any amounts spent on improvements and/or additions to the property. Profits can also be repatriated plus the interest earned.

Cypriot and non-EU sellers can sell their properties to both Cypriot and non-EU buyers.

For more information contact http://www.1cyprusproperty.com

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