All about purchase of the real estate

Popularity of Cyprus as places for a life on pension and purchase of the real estate for rest by foreigners grows. Constantly the growing demand raised, basically, due to the European countries among which the majority (70 %) was made by British. After the recent introduction of Cyprus into the European Union the majority of restrictive procedures at purchase of real estate by citizens of the countries-members of EU will be gradually cancelled after April, 2009. Till this time citizens of the countries-members of the European Union, and also citizens of other countries have the right to full possession of one object of the real estate or a site of the ground the area up to 4,000 sq.m. According to the current legislation, citizens of the countries-members of EU, living or working on Cyprus, still should receive the sanction to possession of any kind of real estate. Citizens of the countries-members of the European Union, who do not live or do not work on Cyprus, should receive the sanction to purchase of the house or an apartment, but they do not need to receive the sanction to possession of the ground area. Splash in demand for the real estate from foreigners speaks many factors, including rather low cost of residing and a high standard of living. Besides unsurpassed hospitality of local population, a pleasant climate, great value of personal safety (Cyprus is one of the most safe countries in the Europe with very low crime rate) have played the important role. Demand and market activity have led stable and from time to time to a prompt rise in prices on the local real estate, however lately this tendency was slowed down. The attractive objects of the real estate especially offered in the secondary market, still it is a lot of, and the local prices for the real estate still below what in other European countries. Cost of country houses on the average on 20 % below, than in Portugal, on 30 % - than in Spain and on 50 %, than in Italy or in France.

Purchase of the real estate in the investment purposes
The prices for the real estate continuously grow in the course of time and its cost, especially on coastal structures, constantly increases. Rather equivalent to the offers existing in other Mediterranean and South-European countries, the real estate on Cyprus is considered a good investment of money, and growing popularity of island in the international market serves it as the further support. As a rule, it is possible to tell, that the income of investments in the real estate makes about 6 % a year in comparison with current cost. Besides annually cost of the real estate increases on 10-15 %.

Legal protection
The legal system of Cyprus is mainly based on the British model and comprehensively protects the rights of the buyer. For protection of the buyer, after signing the contract about sale and payment of a payment, the Ground Chamber of Cyprus gives the simple and effective legal tool called " natural execution ". This procedure is intended for protection of the rights of the proprietor of the buyer before granting the title warrant which has been given out addressed to the owner. The contract brought in Ground Chamber cannot be withdrawn; thus, the property cannot be transferred in rent, is sold, re-registered or incorporated. This status can be changed only by the buyer.

The stamp duty
At purchase of the real estate on Cyprus the unitary stamp duty is raised. The rate depends on contract cost, and payment should be made within 30 days after signing the contract. The buyer pays this sum to tax bodies.
Up to 100,000 ê.ô. - 0.15 %.
From above 100,000 ê.ô. - 0.20 %.

Gathering for a re-registration
The buyer should pay admission fees the next size at purchase of the real estate and its registration on its name in Ground Chamber. Gathering is raised on the basis of market cost of real estate at the moment of purchase.
Up to 50,000 ê.ô. - 3 %.
50,001 - 100,000 ê.ô. - 5 %. From above 100,000 ê.ô. - 8 %.

The tax to real estate
At purchase of the real estate on Cyprus the unitary stamp duty is raised. The rate the registered owner should pay this annual tax based on cost of real estate as of January, 1st, 1980. The property in cost up to 100,000 pounds is not assessed with the tax. At cost of the real estate above this sum of the rate of the tax such: Up to 100,000 ê.ô. - a zero.
100,001 - 250,000 ê.ô. - 0.25%.
250,001 - 500,000 ê.ô. - 0.35%.
From above 500,000 ê.ô. - 0.4 %. The specified rates of the tax to real estate are applied only after granting separate title warrants addressed to buyers according to the contract in Ground Chamber. The registered owner of the ground possesses all the rights.

The tax to increase in the capital
The tax at a rate of 20 % on a gain of the capital is raised from the income received at sale of real estate. The first 10,000-50,000 pounds of cost of private habitation are not assessed with the tax, except for it indexation operates. If the real estate has been got between August, 1st, 1980 and on July, 13th, 1990 with support of in a foreign currency, imported to Cyprus, the tax to pay it is not necessary.

The tax to the inheritance
The tax to the inheritance has been excellent on January, 1st, 2000 and since then is not applied.

Local taxes
Local taxes are raised by local self-government institutions, and make from 30 up to 100 pounds a year depending on the size of property. The tax goes on payment of services on export of dust, street illumination and etc.

Municipal charges
Municipal payments cover a share of the owner of the real estate in charges on cleaning territory and the maintenance of platitudes of using, municipal zones, plantings, pools, payment a pipe operating with object and repair. These charges are paid periodically within a year, and depend on characteristics of complexes and objects of the real estate.

Preferential deductions
Following preferential deductions are given to private persons:
The First 10,000 pounds of the income of sale of the real estate.
The first 50,000 pounds of the income of sale of the house, used the owner for own residing.
Following preferential deductions are given to private persons: the First 10,000 pounds of the income of sale of the real estate. The first 50,000 pounds of the income of sale, applying for granting of all listed above deductions, have the right to the maximal cumulative deductions at a rate of 50,000 pounds. Residents of Cyprus and the companies registered on Cyprus, should pay the tax from incomes on the capital at sale of the real estate, irrespective of its site - on Cyprus or abroad. Non-residents pay the tax only at sale of the property located on Cyprus. They can receive clearing of this tax if can prove, that the property has been got with support of in a foreign currency, imported in the country between August, 1st, 1980 and on July, 13th, 1990, used the owner for own residing.

ATTENTION!
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