In recent years, there has been an increase in the interest of acquiring real estate property in Cyprus. Being an island located in the Eastern Mediterranean, a member of the European Union since 2004, having a tax system which favours investment in real estate and having formed double taxation treaties with several states, combined with the hot climate and natural beauties of the island, has led Cyprus to become an ideal hub for real estate investment.

European Union citizens are allowed to acquire residential and commercial real estate in Cyprus without any restrictions. Citizens of non-EU countries on the other hand, can acquire real estate in Cyprus, but permission from the Council of Ministers is required. Upon obtaining the permission and registering the property in the name of the foreign buyer, the owner of the property may sell or dispose of the property at his own discretion.

For the encouragement of foreign investment in Cyprus real estate, the government has put in place a number of programmes allowing investors and their families to obtain permanent residence permits or Cyprus citizenship, provided that they satisfy some additional criteria.


It is advised that prior to the purchase of real estate property a due diligence exercise is conducted as to verify the information provided by the Seller, ensure that the property is not burdened by any encumbrances such as mortgages, memos and others and that all necessary licenses and/or permissions have been obtained or that sufficient guarantees will be incorporated into the agreement in order to ensure that the investor's rights and investment will be secured through the terms of the agreement with the Seller.


In the event that the findings of the due diligence show that the property is burdened by a mortgage registered in favour of a banking institution, it is required to request from the said institution to issue a bank waiver in accordance to which the banking institution will waive the rights created in its favour by the registration of the mortgage on the property, provided the conditions specified in the bank waiver will be satisfied by the Seller and the Purchaser.


For the reasons identified above, namely ensuring protection of the parties, it should be noted that it is best practice if a Sale Agreement is signed between the seller and the buyer, setting all terms and conditions of the transaction.

Whether a property is under construction is a crucial factor which shall be considered. Where the buyer is purchasing a property which is under construction, it is essential that special terms are incorporated into the Sale Agreement in order to protect the interests of the buyer.

For instance, payments shall be in instalments with the completion of each stage of the construction and upon receiving a certificate of completion of each particular stage from the supervising architect of the project under construction. That is to ensure that all construction works are completed up to the satisfaction of the supervising architect and are therefore up to the appropriate quality standards, security checks and comply with the requirements set by the relevant authorities and all permits issued.


Prior to the initiation of the construction of a project, the developing company must secure a Town Planning permit as well as a Building Permit from the relevant authorities for the licensing of the proposed development. For any changes to the planning of the construction, additional and/or cover permits should be obtained in order to fully legalize the development of the project.


Upon the completion of the development the relevant authorities inspect the project in order to verify that it has been completed in accordance with the terms of the Town Planning and Building Permits (and any amendments thereof) and, upon verification, proceed with the issuance of a Certificate of Final Approval for the development.


In Cyprus all land is registered in the records of the District Lands and Surveys Office in which the land lies. Hence, from a search, which can be conducted at the Department of Lands and Surveys, one can identify the registered owner of the land and which parties (if any) have a registered interest over the land. Once a Sale Agreement is formed and signed between the Seller and the Purchaser, the Purchaser has the right to file the said Sale Agreement in the records of the District Lands and Surveys Office within six months from the date of the signing. The filing of a Sale Agreement in the records of the District Lands and Surveys Office creates the following effects:

  1. Creates a burden on the property as it becomes registered that the Purchaser has purchased the property.
  2. Any memo, mortgage or other encumbrance filed in the records of the Department of Lands and Surveys relating to the property, after the filing of the Sale Agreement, shall rank in order of priority after the rights of the Purchaser.
  3. The Seller cannot dispose and/or transfer and/or sell the property to any other party.


As mentioned above there are title deeds for all pieces of land, containing all the necessary information of the land. Once a project or a house has been developed on the land, the newly issued title deed will entail all the details of the developed property. However, for many properties, which despite having been completed or developed, a separate title deed has not been issued. The issuance of a separate title deed for a property may take 18 or more months.

Upon the issuance of a separate title deed for the property in the case of a development the title can be transferred into the name of the buyer, who will then appear as the new registered owner of the property.


A party who has bought a property by way of a Sale Agreement, which has been filed in the records of the District Lands and Surveys Office, but has not yet been transferred to their name, can proceed with the sale of the property to a third party via assigning their Sale Agreement by way of an Assignment Agreement to the third party.

The Assignment Agreement can be filed in the District Lands and Surveys Office, which creates the same rights as those created with the filing of the Sale Agreement, which are referred to above.


Value Added Tax (VAT)

One should consider whether the property to be purchased is subject to VAT, as VAT may increase the purchase price dramatically.

Whether the property is subject to VAT and the rate of VAT that applies shall be included in the "Purchase Price" clause on the Sale Agreement. If a property acquired is new and unused, it is very likely that it will be subject to VAT. The current VAT rate in Cyprus is 19%.

However, there is a possibility for an individual to apply for a preferential reduced rate of VAT, at 5%, if they meet several criteria. Based on laws 73 (1) / 2012 and 119 (I) / 2016 with their subsequent amendments, the criteria which shall be satisfied for the imposition of the reduced preferential rate of VAT are the below:

  1. The buyer must be an individual (not a company) who has reached the age of 18.
  2. The property in question must be the main residence of the buyer in Cyprus
  3. The buyer must have not acquired property with the preferential rate of VAT in the past 10 years;
  4. The planning permit or the building permit, where a planning permit is not required, must be submitted to the VAT department.
  5. The total area of the property must not exceed 275 m2. It should be noted that the reduced 5% VAT applies only to the first 200m2 of the property.

Transfer Fees

Transfer fees may also apply, and they usually burden the buyer. If the property is subject to VAT, no transfer fees are charged. If the property acquired is used, then it is likely that transfer fees will apply. Transfer fees are calculated as below:

Value of Property

Transfer Fees Rate (%)

Accumulated Fees (€)

0 - € 85.000


€ 2.550

€ 85.000 - € 170.000


€ 4.250

Over € 170.000


Depends on exact amount

Currently only 50% of the transfer fees is payable on all transfers.

Stamp Duty

The Sale Agreement, once signed, must be stamped at the Tax Office within 30 days from the date of its signing and then deposited at the District Lands and Surveys Office. A Sale Agreement which has not been stamped cannot be accepted and deposited at the District Lands and Surveys Offices. Stamp duty is usually also paid by the buyer.

The Stamp Duty legislation has been amended on the 17th of December 2012 by the Stamp Duty (Amending) Law of 2012, Law No. 173(I)/2012, amending the provisions of the Cyprus Stamp Duty law of 1963 to 2007. The amended legislation in in effect since the 1st of March 2013.

For all agreements, memorandum of agreements or any other documents forming any agreement specifying any fixed amount, the stamp duty is calculated on the basis of the contract value stated within the document in the following manner:

  • For amounts between €1 – €5.000 the stamp duty payable is €0
  • For amounts between €5.001 – €170.000 the stamp duty payable is €1,50 for each amount of €1.000 or any part thereof.
  • For amounts exceeding €170.000 the stamp duty payable is €2 for each amount of €1.000 or any part thereof, with a maximum cap of €20.000.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.