Buying Real Property in Cyprus by samarash

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									Buying Real Property in Cyprus
April 2009

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“…Would I might go to Cyprus, island of Aphrodite, where the Erotes, bewitching goddesses of love, soothe the hearts of humankind; or to Paphos, rich and fertile, not with rain, but with the waters of a hundred flowing mouths of a strange and foreign river…”.
Euripides (Bacchae, 402ff.)

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Cyprus, Location & National Symbols

Flag

Coat of arms

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Cyprus is a thriving business hub, strategically located between Europe, the Middle East, Africa and Asia at the crossroads of the global economy. Member of the European Union with a modern telecommunications and transportation network and tested banking and legislative infrastructure but also with a corporate tax of 10%, Cyprus is not only an established gateway to the world of international business but a preferred real property investment destination.
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Golfing in Cyprus

Cyprus’ commitment to business and in particular to the service industry is evidenced by, world-class business facilities, its educated and multilingual workforce and its excellent housing and education offerings. All these, enhanced by, its Mediterranean climate with about 300+ days of sunshine, one of the lowest crime rates in Europe, a choice of cosmopolitan lifestyle, its native population that has been through its thousands of years of history accustomed to live and interact with a variety of ethnicities.

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 Cyprus has proven over two

decades to be one of the most popular destinations for Europeans that seek a holiday, a retirement or an investment home. Demand for the island is increasing at a rapid rate and typical growth rates of 20% plus per annum in carefully selected locations can be observed.
A Protaras beach, Famagusta

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Cyprus, the preferred real property investment destination for 2009!
The Jet-to-Let 2008 Top 10 survey results 1. Cyprus 2. France 3. Spain 4. Germany 5. USA 6. Morocco 7. Italy 8. UAE 9. Turkey 10. Brazil The Jet-to-Let 2009 Top 10 survey results 1. Cyprus 2. France 3. USA 4. UAE 5. India 6. Spain 7. Italy 8. UK 9. Morocco 10. Greece & Turkey

 It is no coincidence that

Cyprus has held on its top position for the second year running as the preferred real property investment destination for 2009, according to a survey of 500 readers in 74 countries by Jet-to-Let magazine.

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What makes Cyprus such a desirable property hotspot compared to others?
 The climate. Winters without hazardous road conditions, no

freezing fog or black ice, and summers without rain. Not to mention clear blue skies (with an average of 340 days of sunshine), spectacular sunrises and sunsets, and brilliant star and moonlit nights.  The diverse landscape and environment. Lovely beaches, majestic mountain peaks, some capped with snow until early April, impressive gorges, hidden caves, ancient sites (e.g. Paleolithic cities, Byzantine monuments, Venetian castles, walled cities, abbeys, ancient Greek and Roman ruins), picturesque and literally untouched villages of character and tradition.
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What makes Cyprus such a desirable property hotspot compared to others?
 The outdoor activities. Outdoor activities are abundant,

including trekking, skiing, golfing, sailing and diving, ideal for nature lovers and water sports enthusiasts.  The cost of living and economy. Studies indicate that the cost of living in Cyprus is about 30% lower than Spain’s and Portugal’s. Competitive prices and a low cost of living compared with other European destinations make for an ideal investment climate. The Strategic Plan for Tourism 2010 is upgrading facilities and resorts in line with 21st century tourism trends. This is set to boost an already thriving tourism industry on the island.

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What makes Cyprus such a desirable property hotspot compared to others?
 The low taxes. A low tax regime makes investors’ money go

even further, while pension income is taxed at only 5%. Additionally, corporate tax is the lowest in the EU at a rate of 10%, attracting numerous multinational companies. Most importantly, double tax treaties with more than 40 countries.  The language of communication. Almost every Cypriot speaks English.  The low crime rate. One of the lowest crime rates in Europe; a crime rate of 6.44 crimes per 1,000 inhabitants.  The mix of cultures. Cyprus offers an interesting mix of cultures, with strong Greek, Middle Eastern, British and Turkish influences.
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What makes Cyprus such a desirable property hotspot compared to others?
 The warmth and hospitality of the Cypriot. Praised by the

likes of Homer and Shakespeare the hospitality of the Cypriot is only appreciated when experienced.  The geographic location. Proximity to Europe, Africa and the Middle East means that Cyprus benefits from regular budget direct flights, making access to and from the island very easy.  An EU member country. EU inclusion since May 2004 means EU financial assistance and several other economic benefits and standards.

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Why Cyprus? Additional reasons
 Democratic country with a free





 

market economy; Excellent telecommunications direct dialling to over 200 countries; Modern and efficient legal, accounting and banking services based on English practices; Bilateral investment agreements with numerous countries; Low set up and operating costs; Highly qualified managerial, clerical and technical staff.
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Beach at Akamas, Paphos

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About Cyprus
 Geography  Demographics  Climate  Ports

Slide(s)
14 - 17 18 19 - 20 21 22 - 33 34 - 45 46 - 49

 Diversity of nature
 History and culture  Economy

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About Cyprus – Geography
 Cyprus, at the crossroads

of Europe, Asia and Africa, is situated in the northeastern corner of the Mediterranean Sea, 75 km south of Turkey, 90 km west of Syria and 380 km east of the Greek island of Rhodes.  It is the third largest island in the Mediterranean after Sicily and Sardinia, with an area of 9,251 km².
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About Cyprus – Geography
 Of the total area 37% is

(…continued)

occupied by Turkish troops while 3% constitutes the territory of the British Sovereign Base Areas.  It has two mountain ranges, Troodos and Pentadaktylos, which run from east to west across the island separated by the central Messaoria plain.

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About Cyprus – Geography

(…continued)

 The densely forested

Troodos mountains

Troodos mountain range in the south-west is a domeshaped highland dominated by the island´s highest peak, Olympus, at 1,953 meters above sea level.  The narrower, Pentadaktylos mountain range in the north, mainly of limestone, rises up to 1,024 meters.

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About Cyprus – Geography
 Cyprus is almost

(…continued)

surrounded by coastal valleys where the soil is alluvial and fertile, suitable for agriculture.  Arable land in Cyprus constitutes 46,8% of the total area of the island.  Rivers are seasonal and only flow after heavy rain.

Coastal rock formation

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About Cyprus – Demographics
 The total population of

Cyprus is slightly over 1 million (2006 census), comprising 778,700 in the territory controlled by the government of the Republic of Cyprus and 265,100 in the occupied territory in the North.  Capital: Nicosia
Avakas Gorge, Akamas

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About Cyprus – Climate
 Cyprus is the warmest

island in the Mediterranean


The mean daily temperature in July and August ranges between 29°C on the central plain to 22°C on the Troodos mountains, while the average maximum temperature for these months ranges between 36°C and 27°C respectively.

 Winters are mild and the

island, on average, enjoys more than 300 days of sunshine every year, and
Beach at Ayia Napa, Famagusta

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About Cyprus – Climate

(…continued)

Troodos in winter

the rainy season is confined to the period between November and March.  Snow occurs rarely in the lowland and on the northern range of Pentadaktylos but falls every winter on ground above 1.000 meters on the Troodos range, usually occurring by the first week in December and ending by the middle of April.

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About Cyprus – Ports
 International Airports
 

(…continued)

Larnaca, and Paphos

 International Seaports
   




Larnaca Limassol Paphos Latchi St. Raphael Resort, and Vassilikos

Limassol Seaport

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About Cyprus – Diversity of Nature
 The variety of plant and

Cape Greco, Famagusta

animal life and the unspoiled scenery make Cyprus one of the most beautiful places for appreciating nature.  With its rugged coastline, alternating between long stretches of sand or pebble beaches, rocky shores and promontories, sun-baked plains and forested mountains, there is something for everyone to appreciate.

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Diversity of Nature

(…continued)

 For a birdwatcher Cyprus is

a must-visit, as the island is on the migration path between three continents, while a large number of endemic plants, such as the Cyprus orchid, tulip and crocus, make it a botanist’s paradise also.  The island has its very own national animal, the Cyprus moufflon, a wild sheep that roams free in the extensive forests of western Troodos.
Cyprus moufflon, Troodos

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Diversity of Nature

(…continued)

 Exotic and rare forms of

wildlife give Cyprus a special touch.  Green and Loggerhead turtles breed on the island's sandy beaches in summer, while the Mediterranean monk seal and dolphins have also been seen swimming in the warm, calm, crystal clear seas of the island.
Petra tou Romiou, Paphos

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Diversity of Nature
 Cape Greko National

(…continued)

Forest Park
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

Situated in the southeast of the island, Cape Greko National Forest Park is an area of unique natural beauty noted for its magnificent sea cliffs and indigenous flora. Many of the 36 different orchid species growing on the island are found here. Crocuses, colchicums and irises add both color and fragrance.

Cyprus Bee Orchid, Cape Greko

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Diversity of Nature

(…continued)

 Cape Greko Park occupies

an area of 390 hectares and offers visitors an opportunity to enjoy a number of activities such as swimming, scuba diving, parasailing, fishing, rowing, cycling, riding, climbing and hiking. A temple to Aphrodite existed here in antiquity.

Cape Greco sunset

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Diversity of Nature

(…continued)

 Akamas a peninsula and

a nature conservation park is situated at the westernmost point of Cyprus. It is a rugged thumb-shaped strip of land crisscrossed by rocky hiking trails. It is the easternmost point of the three major flora zones of Europe.
Sea caves at Akamas, Paphos

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Diversity of Nature

(…continued)

 The number of plant

Glaucopsyche Pafos butterfly, Akamas

species found in Akamas runs up to 600, of which 35 are endemic. The variety of fauna is also impressive: 168 bird species, 12 mammals, 20 reptiles and butterfly species of which the endemic Glaucopsyche Pafos butterfly is said to be the symbol of the area.

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Diversity of Nature

(…continued)

 From the various trails

Pyramid Orchids, Akamas, Paphos

hikers have spectacular views of rock formations, limestone outcroppings, cliffs and boulders sculpted into odd shapes suspended in the sea.  According to a version, the area took its name from the Greek mythological hero Akamas, son of Theseus,

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Diversity of Nature

(…continued)

 who came to Cyprus after

Akamas in spring

the Trojan War and founded Akamantis.  An area of incomparable natural beauty, Akamas was also the place where Aphrodite and Adonis had their love trysts.  Akamas is ideal for walking, cycling, diving, swimming, fishing, exploring, boat cruising, bird watching…

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Diversity of Nature
 The island’s national plant

(…continued)

is the Cyprus cyclamen, an endemic plant that flowers from September to January.  The national tree is the golden oak that takes its name from the golden color of its leaves. Also endemic to Cyprus, it is found in the Troodos mountain range and flowers from April to May.
Wild Cyclamen, Evryhou

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Diversity of Nature

(…continued)

 The fruits ripen all year round.

Cyprus Scops owl

The forests are also graced with pine, cypress and cedar. Olive and carob trees grow widely, while deciduous fruit trees and nuts are grown in the mountains.  Home to the endemic Cyprus Warbler and the Cyprus Pied Wheatear, Cyprus is in the middle of north-south migration routes making it an important stopover for millions of birds every year.

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Diversity of Nature
 With more than 350

(…continued)

species of birds, there is much to the delight birdwatchers.  Besides the endemic Cyprus Warbler and Cyprus Pied Wheatear, there are four endemic subspecies – the Cyprus Scops owl, the coal tit, the short-toed tree creeper and jay.

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History and Culture
 Throughout the centuries

(…continued)

both the history of Cyprus and Cyprus culture have been formed by its location at the crossroads of cultural exchange between Europe, Asia and Africa .  Antiquities excavated here bear witness to a culture influenced from abroad, due to its geographic location between the great cultures of the ancient world, but which developed from these influences its own unique tradition.
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Figurine, Chalcolithic period, mid 3rd millennium B.C., Lempa, Paphos

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History and Culture
 Cyprus was famous in

(…continued)

antiquity for its copper mines, fine craftsmanship and luxury goods, and, perhaps most of all, as the birthplace of the Goddess Aphrodite, goddess of love and beauty.


Thus the name, Cyprus (Kypros in Greek) a synonym of Aphrodite (Kypria) and/or copper, like the color of her skin.

Marble statue of Aphrodite, Hellenistic period, Soloi

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History and Culture

(…continued)

 For much of its long

Dionysos god of wine and entertainment

history, and indeed down to modern times, Cyprus has played a central role in the complex political and economic relationships of the eastern Mediterranean area, both as a source of raw materials and manufactured goods, but also as a point of contact

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History and Culture

(…continued)

between the diverse populations of the entire region. This is reflected in the richly textured archaeological record of the island.  The island could be seen from the Levantine and Anatolian coasts but would need great personal effort and hardship to be “colonized'.
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Sanctuary of Apollo, Limassol

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History and Culture
 The cultures that did

(…continued)

develop on Cyprus through time quickly formed the unique cultural identities that so often occur on islands when there is a barrier to communication. They found their own path as they were shaped by the geology, geography, flora, fauna and simply 'Cyprusness' of their surroundings.
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Paphos castle

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History and Culture

(…continued)

 During prehistory the island

Mycenaean style terracotta, 1230 B.C. Enkomi, Famagusta

was influenced by the Pharaohs of Egypt to the south, the Mesopotamian kingdoms to the east, the Hittite empire to the north and the Minoan and Mycenaean cultures of the west. It is this unique fusion of cultures and influences that is one of the great joys of Cypriot archaeology.

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History and Culture

(…continued)

 By 800 B.C. Cyprus has ten

Greek kingdoms and it is a flourishing and prosperous country.  From 750 B.C. Cyprus is conquered several times by Assyria, Egypt and Persia.  In 333 BC Alexander the Great claims Cyprus for part of his empire.  In 58 B.C. Cyprus becomes part of the Roman Empire.
Mosaic: Leda and the swan, Paphos

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History and Culture

(…continued)

 After the division of the

Famagusta Gate, Nicosia

Roman Empire Cyprus becomes part of Byzantium.  In1191 AD Cyprus is defeated by the crusader Richard the Lionheart. The island is then sold to the Knights Templar, who resell it to Guy de Lusignan.  From 1192 to 1489 Cyprus is ruled under a feudal system and Catholicism becomes the official religion.

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History and Culture

(…continued)

 In 1489 control of the island

passes to the Venetians who takes steps to fortify the island and build walls around the towns of Nicosia and Famagusta.  In 1571 Cyprus becomes part of the Ottoman Empire.  In 1878, under the Cyprus Convention, Britain assumes administration of the island although it remains part of the Ottoman Empire.

900 A.D. Byzantine church of Ayia Paraskevi, Yeroskipou, Paphos

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History and Culture

(…continued)

 In 1914 however, when the

Ottomans entered the 1st World War on the side of the Germans, Britain annexed the island.  In 1923 Turkey relinquishes all rights to Cyprus and in 1925 Cyprus is declared a Crown colony.  An armed struggle breaks out in 1955 against colonial rule, which lasts until 1960 when the island is granted independence.
5th century B.C. sarcophagus, Amathus, Limassol

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History and Culture

(…continued)

 In 1963 Turkish-Cypriot

13th century B.C. rhyton, Kition

ministers withdraw from the Government in protest at proposed changes to the Constitution and Turkey threatens to invade.  In1974 the Greek junta instigates a coup in Cyprus against the Cypriot Government and Turkey uses that as a pretext and invades the island – the coup fails.

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History and Culture
 Turkey continues to illegally

(…continued)

occupy 37% of the island, violating the UN charter. It has established the Turkish Republic of Northern Cyprus, an illegal state, recognized only by Turkey and continues to maintain the division of the island through force.

Occupied Cyprus: Ancient Greek city of Salamis

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About Cyprus – Economy
 The Cyprus economy is characterised by robustness and
 




macroeconomic stability. In 2008 it was classified by the IMF amongst the 32 advanced economies of the world. From 1 January 2008, the country entered the Eurozone and adopted the Euro (€) and monetary policy is dictated by the European Central Bank. Cyprus has an open, free-market, service-based economy. Throughout the post-Independence period, Cyprus has had a record of successful economic performance, reflected in rapid growth, full employment conditions and external and internal stability.
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About Cyprus – Economy

(...continued)

 The underdeveloped economy, inherited from Colonial Rule

in 1960, has been transformed into a modern economy, with dynamic services, industrial and agricultural sectors and advanced physical and social infrastructure.  Cyprus is classified among the high-income countries. It has a standard of living that is higher than most other European Union member-states and the performance of the economy compares favorably with that of most of the wealthier other EU countries.  The average annual rate of growth in the past five years was about 3.8%, while inflation stood at 2.9% and unemployment at 3.4% over that period.

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About Cyprus – Economy

(...continued)

 These achievements appear all the more striking, bearing in

mind the severe economic and social dislocation created by the Turkish invasion of 1974 and the continuing occupation of the northern part of the island by Turkey. The Turkish invasion inflicted a serious blow to the Cyprus economy and in particular to agriculture, tourism, mining and quarrying: 70% of the island’s rich producing resources were lost, the tourist industry lost 65% of its hotels and tourist accommodation, the industrial sector lost 46%, and mining and quarrying lost 56% of production. The loss of the Port of Famagusta, which handled 83% of the general cargo, and the closure of the Nicosia International Airport, in the buffer zone, were additional blows.
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About Cyprus – Economy

(...continued)

 The success of Cyprus in the economic sphere is attributed,

inter alia, to the adoption of a market oriented economic system, the pursuance of sound macroeconomic policies by the government as well as the existence of a dynamic and flexible entrepreneurship and a highly educated labor force. Moreover, the economy benefited from the close cooperation between the public sector and the social partners.  Noteworthy, is that Cyprus has the fourth-largest ship registry in the world, with 2,758 ships and 25.5 million gross registered tons (GRTs). It is an open registry and includes ships from more than 43 countries.

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Slide(s)
Buying real property Selling real property Tax issues Registration of companies Occupied North – buying property Images of Cyprus 51 - 57 58 - 60 61 - 71 72 73 75 - 83

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Buying real property in Cyprus
Non-Cypriots are entitled to own freehold real property  Under the Immovable Property Acquisition Law, nonCypriots, Companies and trusts are entitled to buy freehold immovable properties, subject to prior permission by the Council of Ministers.  The procedure is merely a formality, and permission is normally granted more or less as a matter of course to all bona fide buyers wishing to purchase a flat, house or plot of land for the erection of a house not exceeding 4,014 m².  Once permission is granted and the property is registered in the buyer's name, there is no restriction on selling the property or disposing of it by will.
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Buying real property in Cyprus

(…continued)

Exchange Control  No exchange control restrictions apply either for buying or selling immovable property. Mortgages and Finance  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 any other currency and will be to a maximum of 70% of the value of the property, with a repayment period of usually not more than 30 years.

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Buying real property in Cyprus

(…continued)

Contract of Sale of Immovable Property  Under Cypriot Law, such contracts must be in writing. It is also advisable that Contracts of Sale be deposited at the relevant District Lands Office within 2 months of signing the contract, so that the buyer's right to pursue the remedy of specific performance in the event of breach, are protected.  Ownership in Cyprus is denoted by title deeds issued by the District Land Office. Therefore, all contracts must provide for the transfer and registration of the property in the buyer's name and to ensure title deeds are obtained.

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Buying real property in Cyprus

(…continued)

Transfer of the Title Deed Once the Council of Ministries has granted permission to the buyer's application to acquire property, transfer of ownership can be done. Transfer tax fees based on the value of the property, are payable by the buyer and are as follows and are based on the value of the property, i.e. Transfer fee % up to €85,430 = 3% From €85,431 to €170,860 = 5% Above €170,861 = 8%

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Buying real property in Cyprus

(…continued)

Immovable Property Tax  The annual immovable property ownership tax is based upon the market value of the property in 1980, which is much lower than current market values. So for many properties in Cyprus, there is no immovable tax due.
Value of property in € Tax up to €170,000 From €170,001 to €430,000 From €430,001 to €860,000 Above €860,001 Annual Property Tax Exempt 2.5% 3.5% 4.0%

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Buying real property in Cyprus

(…continued)

Stamp Duty  A one-off duty is levied on the purchase of property in Cyprus and rates are dependant on the contractual purchase amounts. The amount is payable to the Tax Authorities and should be paid within 30 days of signing the contract.
Value of property in € Up to €170,000 Above €170,000 Stamp Duty 0.15% 0.20%

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Buying real property in Cyprus

(…continued)

Inheritance Tax  There is no inheritance tax. Local Authority Tax  This tax covers the cost of refuse disposal, street lighting etc. and ranges from approximately €50.00 to €170.00 per annum, depending on the size of your property. Basic utilities such as electricity, water and telephone are payable direct to the relevant suppliers and charges are based on meter readings.

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Selling real property in Cyprus
Capital Gains Tax  Capital gains tax is paid on gains arising from the sale of the property at a rate of 20%, with the first €17,000 being exempt for each person, as investment allowance.  Proceeds from the sale, less the cost of the property, professional and legal fees, commission, interest paid, inflation allowance and investment allowance. The investment allowance is granted only once, unless it has not been exhausted at the first sale, in which case any balance would be carried forward.

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Selling real property in Cyprus

(…continued)

Capital Gains Tax (…continued)  Gains from the sale of a dwelling house are exempt up to €85,000 in total if the owner resides in it continuously for at least five years prior to disposal. The following categories are exempted from Capital Gains Tax:
  

Transfers by reason of death. Donation between relatives up to the third degree of kindred. Donation to Limited Companies, all shareholders of which are members, and continue for 5 years after the donation to be members, of the family donor.

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Selling real property in Cyprus
Capital Gains Tax (…continued)


(…continued)



 

Donations from family Companies to their shareholders, but only in cases where the property gifted was originally acquired by the Company also by way of gift. Donations to Charitable Institutions or to the Republic of Cyprus. Exchanges of permanent residence. Compulsory acquisitions.

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Tax issues
 Individuals are taxed in Cyprus solely based on their

residency status, which falls into two main categories, permanent residents and non residents.


Permanent residents – An individual who spends at least 183 days in Cyprus in the tax year will be considered to be a Cyprus resident for tax purposes. These consist of foreign private individuals:


Retired, settled permanently.  Reside indefinitely or for a fixed period of time in Cyprus as employees of either their own companies or of other.  Those wishing to take advantage of the tax and other fiscal advantages offered when having a Cyprus tax residency.

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Tax issues


(…continued)

Individuals are taxed on the following types of income:


Profits from a business activity in Cyprus, including rent, etc. from property. Profits earned from a permanent establishment abroad, are fully exempt from corporation tax.  Worldwide employment income.  Pensions in respect of past employment exercised in Cyprus.  Pensions exercised outside Cyprus will be taxed either at normal income tax rates as shown below, or at the option of the taxpayer, at the flat rate of 5% on the excess of €3,400.
Up to €19,500 From €19,501 to €28,000 From €28,001 to €36,300 Above €36,301 Nil 20% 25% 30%

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Tax issues


(…continued)

Deductions and allowances
The following can be deducted in calculating the tax liability:  There will be a deduction of 20% for the first 3 years in Cyprus, limited to CYP 5,000 per annum.  Life assurance premiums.  Contributions to stale social security and welfare fund and pension funds.



Expatriate Tax and Social Security Contributions
Expatriate employees are taxed as follows:  Individuals who perform all their employment duties abroad will not be taxed on their earnings.  Those who are present for 183 days or more in Cyprus in the tax year will be taxed on their worldwide earnings.

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Tax issues


(…continued)

Expatriate Tax and Social Security Contributions (…continued)




Those who are present for less than 183 days in Cyprus in the tax year will be taxed on their earnings attributed to their days work in Cyprus. Non EU citizens who originate from countries where a social security agreement has not been signed between their country and Cyprus, will be liable to social security contributions.





Contributions are Currently Payable by Both Employer and Employees, at a ratio of 6:3. Individuals are not taxed in Cyprus on interest or dividends received from sources either within Cyprus or from abroad, except for Defense Fund Contribution.

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Tax issues


(…continued)

Gains from Disposal of Securities


Any gains made from the disposal of securities are not subject to taxation in Cyprus. The exemption applies for all gains, including those that arise from trading in securities.

Old window, Lempa, Paphos

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Tax issues


(…continued)

Double Tax Treaties (DTT)


Individuals or companies who choose to reside in Cyprus may also enjoy, under certain circumstances, the benefits of the DTT of their country of origin with Cyprus, if there is one in place. The main objective of the DTT is to avoid the double taxation of income earned in any of the two contracting countries.  Cyprus has signed 40 such treaties, in effect regulating tax regulations with over 50 countries. For example, UK citizens may receive their pensions and investment income in Cyprus free of UK withholding tax. This Treaty is unique to Cyprus, since it includes both public and private sector pensions.  Insurance pensions can be paid to retirees in Cyprus on a similar tax-free basis, and are index-linked by virtue of the Reciprocal Agreement, compared to their "frozen" status in other overseas destinations.

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Tax issues

(…continued)

 Cyprus signed double tax treaties with:

  


  


  

Armenia Austria Belarus Belgium Bulgaria Canada China CIS (ex-USSR) Czech Republic Denmark Egypt Finland

           

France Germany Greece Hungary India Iran Ireland Indonesia Italy Japan Kuwait Lebanon

      


  

Malta Mauritius Moldova Montenegro Norway Poland Qatar Romania Russia Serbia Seychelles




     



Singapore Slovakia South Africa Sweden Syria Thailand Ukraine United Kingdom United States

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Tax issues


(…continued)

Non residents – Entities that,


Are either holiday makers who purchase properties in Cyprus as holiday homes or for possible permanent living upon retirement, or for the sale thereof with a reasonable profit at a later stage.  Are business investors and companies that acquire property in Cyprus for tourist or industrial purposes.


Individuals are taxed in Cyprus on the following types of income:


Employment income for work performed in Cyprus.  Profits from a business activity, which is carried out through a permanent establishment in Cyprus.  Pensions in respect of employment exercised in Cyprus, except for pensions paid from a fund established by the Cypriot Government or any local authority.

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Tax issues


(…continued)

VAT


In most cases, VAT is 15%.


There are reduced rates of VAT of 5% and 8% that refer mainly to food and agricultural products. books, newspapers, rural transportation , etc.



VAT is charged on assets and services in Cyprus as well as on imports of Cyprus.  Exports are not subject to VAT.


VAT on Immovable Property


For those buildings for which an application for a town planning permit was submitted prior to the 01.05.2004, no VAT is charged in the event of a sale. For those after the above date, a VAT of 15% is charged (no VAT is charged on land/building plots for purchases prior to 01.01.2008)

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Tax issues


(…continued)

VAT on Immovable Property (…continued)


In case of a house purchase which is classed as the main/ permanent resident of the purchaser, and provided that it is not larger than 250 m², the VAT is refunded up to 10% (out of the 15%).  The applicant will be required to declare that he/she has no other house as such (permanent), whereas foreign purchasers must live in the house at least 183 days p.a.  VAT is paid only once.  In case that property is bought in order to be sold but is not used by the buyer but e.g. rented, no VAT paid. When this particular property is sold then VAT must be charged by the original buyer to the new buyer and paid to the authorities.

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Tax issues


(…continued)

VAT on Immovable Property (…continued)


If a person claims and receives a refund, he/she must then reside in it for a period of 10 years. If he/she leaves the property, e.g. he/she decides to sell the property on the 8th year, he/she must refund the VAT refund in proportion to the period outstanding out of the ten years, i.e. in this case the 2/10. If he lives in the house for 10 years, he /she can acquire other property with the same VAT rights.  Refund is only given to residents.  For commercial and or industrial use developed for own use, no VAT is charged.  Rents are not charged with VAT (but licenses are).

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Registration of Companies
 The procedure for a company’s formation is:






Initially, an application for the approval of the name of the company is submitted to the Registrar of Companies. After securing the company’s name, the relevant documents for the company’s registration e.g. Memorandum of Understanding, Articles of Association, etc. are to be submitted through a lawyer. In the case of a partnership registration, the involvement of a lawyer is not mandatory. Registration is completed within one month under the normal procedure, and within one week under the accelerated procedure at an additional fee of €50.

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Occupied North – Buying property
 Anyone who is seeking to "buy" Greek Cypriot owned

property in the occupied North does so illegally and such action constitutes a criminal offence for which they will have to face a European arrest warrant in whichever of the European Union countries they may be.  According to the Land and Registry record, approximately 82% of the privately owned land in the territory now under Turkish occupation is owned by Greek Cypriots, 16.7% is owned by Turkish Cypriots.

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“Cyprus offers a strategic location, favorable tax environment, educated work force, excellent telecommunications and modern banking and legal infrastructure which makes the country the perfect business bridge for the European Union and the Middle East. Furthermore, Cyprus has gained a long reputation as the springboard for investment into Central and Eastern Europe”.
The Wall Street Journal 5 May 2004

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Images of Cyprus – People

Donkey ride, Stroumbi

Bathing, Aphrodite Hills

Baking bread, Tembria

Welcome, Kathikas

Pottery, Fini

Monk, Stavrovouni

Resting at Platres

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Images of Cyprus – Villages

Lofou village, Limassol

Kalopanayiotis village, Nicosia

Omodos village, Limassol

Lefkara village, Nicosia

Fikardou village, Nicosia

Kakopetria village, Nicosia

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Images of Cyprus – Flora and Fauna

Gadouragkathos, Tohni

Monarch butterfly, Evrychou Colchicum, Troodos

Flamingo at the Larnaca salt lake

Cyprus donkey, Vouni

Chelonia Mydas, Polis

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Images of Cyprus – Landscape

Lara Bay, Paphos

Scene from Akamas, Paphos

Outskirts of Nicosia in Spring

Ancient bridge of Skarfou

Ancient bridge of Tselefou

Cove at Pomos, Paphos

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Images of Cyprus – Colours of the sea

Governor’s beach, Limassol

Beach at Ayia Napa, Famagusta

Makronissos beach, Famagusta

Beach at Ormidhia

Beach at Protaras, Famagusta

Sea Caves, Ayia Napa

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Images of Cyprus – Ancient churches

Asinou church, Nicosia

Stavrovouni monastery, Larnaca

St. Paul’s pillar

Angeloktisti church, Larnaca

Kykkos monastery

Curium church

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Images of Cyprus – Hotels

The Amathus Beach Hotel, Paphos

Hotel Le Meridien, Limassol The Nicosia Hilton Hotel

The Four Seasons Hotel, Limassol

The Elysium Hotel, Paphos

Hotel Intercontinental, Aphrodite Hills

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Images of Cyprus – Outdoor activities

Golfing in Paphos Bungee-jumping, Ayia Napa Scuba-diving at Zenovia, Larnaca

Horse riding, Asgata

Skydiving, Limassol

Quad biking, Troodos

Skiing, Troodos

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Images of Cyprus – Sunsets

Sunset at Lara bay, Paphos

Dusk at a Larnaca beach

Sunset at Akamas, Paphos

Paphos castle sunset

Sunset at Petra tou Romiou

Dusk at Pomos, Paphos

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Sources
 Pytheas Emerging Markets Research  Department of Lands and Surveys  Department of Town Planning and Housing  Ministry of Interior

 Ministry of Commerce, Industry and Tourism
 Central Bank of Cyprus  Ministry of Labor and Social Insurance  Inland Revenue Department  Department of Customs and Excise  Cyprus Chamber of Commerce and Industry  Cyprus Tourism Organization  The European Union

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Disclaimer The above notes have been compiled to assist you; however, actions taken as a result of this document are at the discretion of the reader and not of Home4U or PYTHEAS.

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www.home4U.com.cy
www.pytheas.net

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