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Information on purchase

Cyprus Finance
Once residential licenses have been approved, the next step is working out a payment plan with your local bank. Generally, you must provide the bank with specific documents in order to complete the property ownership registration process for a bank loan. Below are the details regarding bank required documents as well as procedures required to apply for a bank loan.

Cyprus Banks - Required Documentation:

• Customers profile (personal details, occupation-duration of your employment contract, if any, with your current employers).
• Passport copies (page displaying photograph and personal information).
• Statement of existing debt (if any).
• A reference letter from the banks you maintain current account/s with.
• Completion of the attached Declaration of Personal Income.
• Evidence of income - either pay slip or confirmation of remuneration from your employer, or P60 or business accounts.
• Purchase agreement (will need original document when ready for loan drawdown).
• Copies of bank statements reflecting the last three months.
• Copies of payments already made by the applicant for the property.

Cyprus Loan Procedures: Loan procedures for EU citizens are standard for most banks in Cyprus. Once you have been approved for a loan, there are two options which you can choose from in order to repay your monthly instalments. Below are bulleted points regarding the loan and repayment procedures.

• The loan can be granted in foreign currency (i.e. USD, EUR, GBP, etc.) The repayment of the loan must be effected from external sources.
• It is advisable that the loan is in the currency that the applicant receives his/her income, so that there is no exposure in any exchange risk during the repayment period.
• For a loan in foreign currency the maximum repayment period can be 15 years.
• For a loan in Cyprus Pounds the maximum repayment period is 25 years.
• The maximum loan amount will be 60% of the value of the purchased property. In exceptional cases the amount can be 70% of the value of the purchased property (depending on the credit rating of the customer).
• The loan is repaid by monthly instalments.

Cyprus Property Tax

Cyprus Capital Gains Tax: Capital gain is revenue attained from the sale of an asset that was previously purchased at a lower price. Generally, capital gains are attained from the sale of stocks, bonds, and property. When the sale of one of these assets suffers a loss instead of making revenue, this drop in profit exemplifies capital loss.
Upon the reselling of your property, capital gains tax will be payable at the rate of 20% on the profit revenue, with the first 18.000 EURO being waived for each person. The profits are the variations between the sales proceeds and the original cost of the property. With reference to property purchased before January 1st, 1980, the profits are the difference between the sales income and the market value of the property as of January 1st, 1980. In addition to this payment, the seller is permitted to an additional allowance concerning the transfer fees paid, annual inflation rates and the cost of any renovations made to the property. Profit from the reselling of your property is not liable in total, up to 85.000 EURO if you reside on the property for at least five years prior to reselling it.

Cyprus Stamp Tax: Once you have purchased your property, you are responsible for the payment of stamp tax. Stamp tax stands at the rate of 2.60 EURO per thousand of the property value up to 170.000 EURO. The amount exceeding 170.000 EURO is then charged at the rate of 4.00 EURO per thousand. While non-affixed stamps do not invalidate a contract, the stamp tax plus a fine will be payable when the document is produced to the Court or any other Government departments. Official documents should always be stamped within 30 days of their signing in order to avoid facing any legal repercussions.
For example, if the purchase price is 250.000 EURO

First 170.000 EURO	1.5%	440 EURO
Next 80.000	2%	320 EURO
	Total:	760 EURO

Cyprus Local Tax Rates: Local tax rates range between 85- 260 EURO annually depending on the amount of your property. These taxes cover waste collection, street lighting, sewerage, etc. Basic utilities, such as electricity, water supply and telephone are to be paid separately in compliance with their utilization and based on meter readings.

Cyprus VAT: As of May 1st, 2004, a statue regarding VAT was introduced at the rate of 15% concerning property purchasing and development. There is a reduced charge of VAT of 5% that applies primarily to food and agricultural products. VAT pertains to assets and services in Cyprus, in addition to imports entering Cyprus.

Cyprus Double Taxation Policies: Cyprus has double-taxation agreements with the following countries: Austria, Bulgaria, Canada, the People's Republic of China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia (Armenia, Belarus, Kurdistan, Moldova, Tajikistan, Turkmenistan and Ukraine), Slovakia, South Africa, Sweden, Syria, the United Kingdom, the United States, Yugoslavia (Serbia and Montenegro) and other countries. The prime objective of these agreements is the prevention of double taxation of income grossed in any of the above mentioned countries. A credit is typically permissible concerning taxes lived by the country of your residence for taxes collected in the other country.

Cyprus Community Expenses

Cyprus Communal Expenses: Communal expenses cover an owner's share towards the cost of cleaning and maintaining a project's communal areas, gardens, swimming pool, management fees and repairs. These costs are payable in predetermined instalments during the year and vary between developments and properties; however, these fees tend to average around 600 EURO per annum.

Cyprus Electricity and Water Supply: Utility bills such as electricity and water are payable to the electric and water supply companies respectively. These payments are due at set periods during the year. They consist of a fixed connection fee and include a base monthly fee, along with the consumption rate per household. For electricity this is 2.80 EURO every two months plus 1 EURO per Kw/hr. The electricity in Cyprus is 220-240 volts. If you are relocating to Cyprus from the U.K. or any other European country, your appliances can be used here without an adaptor. Listed below are the connection fees regarding electricity, water and phone.

The above amounts are deposits for security reasons only and are refundable with termination of the service.