Buying property in Cyprus

Buying a property in Cyprus* is an exciting venture and it can be a lifechanging decision. That’s why it’s important to get it right first time and ensure you understand the process before signing on any dotted lines.

While the prospect of buying property in Cyprus as an international buyer might be daunting, it needn’t be, with the right connections and experts on your side.

This guide will provide you with an overview of the process, market conditions, key legal considerations and top tips on navigating the property market in Cyprus.

*Please note: When we say Cyprus, we mean the Republic of Cyprus and not Turkish-occupied Northern Cyprus.

Who can buy property in Cyprus?

There aren’t any limitations on who can buy property in Cyprus. International buyers have the same right to purchase property as residents. It’s also relatively easy for EU and EEA citizens to buy in Cyprus.

If you’re a non-EU buyer, you are allowed to buy ‘immovable property’ but must seek permission from the Council of Ministers by written application, which must be submitted by the buyer after the contract of sale is signed.

The application to the Council of Ministers is submitted with the Sale Agreement and is typically granted within two or three months.

Is it safe to buy property in Cyprus?

International buyers can be confident that there are strong legal processes in place to protect them when purchasing a resale (i.e. older) and new build (“off-plan”) properties.

As with any property purchase, there are some potential pitfalls that come with not doing your own due diligence or hiring reputable professionals. We highly recommend you work with an independent lawyer when buying a property in Cyprus as they will be able to advise you on every step of the process. A good, proactive estate agent will be especially useful, as will a currency specialist if your home currency varies from the euro.

How to avoid the potential pitfalls of buying property in Cyprus

Types of property available in Cyprus

It’s clear to anyone who has browsed the Cypriot real estate market that your first choice is between houses and apartments, which are by far the most popular. However, these can be divided into sub-categories to help you narrow down your search and find the perfect home for you and your family.

Read more on the types of houses available in Cyprus

The experts that will help you buy property in Cyprus

There are three key contacts that you’ll need on your side to purchase a property in Cyprus.

Estate agent

There are many estate agents across Cyprus geared towards international buyers. Most speak English. Estate agents earn a commission of between 3–5% of the price, much higher than most British estate agents, but it is paid by the seller.

Estate agents will have a mind-boggling portfolio of properties to show you, so focus on what you really want. That includes sticking to your budget and your chosen location. Having said that, there should be place for spontaneity in your property viewing too.

For peace of mind, check that your chosen estate agent is licensed and regulated. Are they members of the International Real Estate Federation (FIABCI), or the Cyprus Real Estate Agents Association (CREAA). They should be licensed as a Real Estate Agency and ideally registered in the Council of Cyprus Real Estate Agents, which is governed under Cypriot Law.

Independent lawyer

Finding an independent lawyer in Cyprus who speaks your language and is a member of the Cyprus Bar Association should be at the top of your to-do list. In the long run, your lawyer could save you plenty of money. Certainly, they will guide you through the legal aspects of buying and selling property in Cyprus and help you do so safely.

Having an independent lawyer who is on your side is essential when buying a property, as if things turn sour, you want to know your lawyer ins on your side, rather than one who has ties to a developer or agency.

We’d always recommend using an English-speaking Cypriot lawyer, who has a strong knowledge of the local area and property laws. They will often also be able to advise you on inheritance and personal tax, which is so important in making life there problem-free. It’s important to check they’re registered with the Cyprus Bar Association and specialise in immovable property law for assistance and guidance.

Currency specialist

Along with the other members of your professional team, a currency specialist will work with you to ensure that your money is not exposed to ‘currency risk’ (moving exchange rates) when it is transferred to euros ahead of your property purchase in Cyprus. Therefore, it’s important to find the right one for the job.

If you’re not familiar with this risk, it occurs when you need to transfer a large amount into a foreign currency, which involves exchanging funds using the everchanging exchange rate. As the rate fluctuates by the minute, there’s a risk that your funds could depreciate and end up being worth less, costing you more to buy a property. For example, a drop of just 1% in the exchange rate could increase the price of a €250,000 home by almost £2,500. The average rate movement in a three-month period (average buying process from initial to final contracts) has been known to fluctuate between 5-10%, which could mean you’ll end up paying even more for a property.

Your currency specialist will counter this by securing something called a forward contract, which is an agreement that fixes an exchange rate for a set period. We’ve worked with our trusted partner Smart Currency Exchange since 2008 and they’ve helped our buyers secure forward contracts for many years — take a look at their Property Buyer’s Guide to Currency to find out more about protecting your funds.

Getting a mortgage in Cyprus

It is possible to get a mortgage to buy a property in Cyprus regardless of whether you’re buying a permanent home or a holiday home, however there are some banks who only offer mortgages to residents.

The maximum loan amount for foreigners in Cyprus is 80% of the property value. An international buyer can take out a mortgage in Cyprus of €75,000 to €500,000, excluding the down payment. The higher the down payment, the more likely it is to be approved.

There are two routes to getting a mortgage in Cyprus: with a broker and a lawyer or with the help of an agency or developer. A broker has connections across Cyprus, which you may not have access to as an individual, which could better your chances.

The latter is more common for developers of new-build properties who can also handle mortgages.

It’s also important to consider that there are additional costs when buying real estate, such as stamp duty, VAT and property transfer tax.

About buying costs

The process of buying property in Cyprus

The process of buying a property in Cyprus is largely similar to the UK. It typically involves a reservation deposit, paid to take the property off the market, then the signing of contracts can commence after you’ve received approval from the Council of Ministers.

Here’s a basic outline of the process:

Set a budget: Depending on what and why you’re buying property in Cyprus, your budget may vary. That’s why it’s important to speak to a local expert or estate agent and a currency specialist to find out how your budget converts.

Online search: There are lots of places to find properties online. A few include Your Overseas Home, Rightmove Overseas and Zoopla. Start by narrowing your search down to an area and then enquire on a few you like.

Viewing trip: Your next step is to book a viewing trip to see properties with an estate agent.

Reservation deposit & offer: When you find a property you like and you’ve made an offer, you’ll be asked to pay a reservation deposit (usually €5,000-10,000) to take it off the market. Your lawyer will be able to help with this.

Legal due diligence: It’s at this point you seek permission to the Council of Ministers who will review your application – this is in relation to character references and checks you’re not wanted by Interpol etc, so don’t worry too much. Your independent lawyer can assist with this.

Sales agreement & negotiation of terms: Once your lawyer has completed due diligence, they will draft a sales agreement which both the seller and buyer will sign. The contract will include information about completion dates, obligations, covenants and contingencies. At this point you’ll be required to pay a deposit, which is approximately 10% of the sales price for a resale property and 20-30% for a new build.

Registration of sales agreement: The contract of sale will need to be registered with the Lands Registry Office by your independent lawyer.

Transfer of title deeds: After receiving authorisation from the Council of Ministers to transfer the title, you can obtain the title deeds from the Regional Land Chamber. This must be done in the presence of the seller and buyer. You must obtain a receipt proving the registration fee and registration of property tax have been paid. During this final stage, the title deeds transfer fee will have to be paid. Once in receipt of them, you are the owner of the property. You can now apply to the likes of the water and electricity authorities to transfer the utilities into your name.

The costs of buying in Cyprus

There are some additional costs to account for that will not be included in your Cyprus property price. In total, these costs typically cost around 15% of the property value.

These include:

• Land registry fees – often handled by your lawyer, usually minimal.
• Legal fees – When using a lawyer for due diligence and property paperwork, the price you pay varies depending on the level of service, but it’s usually around 1% of the property price.
• Estate agent fees – these are paid by the seller, but are typically equivalent to 5% of the purchase price plus VAT.
• Property transfer fees: No property fees are payable if VAT was paid on the purchase price of the property. Property transfer fees are halved to 50% if VAT was not paid. But if the Land Register office considers the price on the contract is undervalued and not in line with the market value of the property, the full property transfer fee may be levied.
• Stamp duty: This is calculated on the value of the purchase agreement and currently set at the following rate: €0 to €5,000 — zero; €5,001 to €170,000 — 0.15% greater than €170,000 — 0.2%.
• Value added tax: VAT, as of 2018, is charged at 19% on the first property purchase. A reduced rate of 5% is charged on the first 200 square metres of the property to be used as the buyer’s primary and permanent residence for ten years. VAT is charged at 19% for the remaining square metreage.

Property insurance: If you want credit from a Cypriot bank, you will need to obtain property insurance. Nevertheless, it is one of the ‘hidden fees’ that is forgotten about by purchasers when they get the property in their name. You can shop around for property insurance as you would do in your home country.