Buying a Home in CyprusMortgages Purchasers requiring finance have the choice of remortgaging their UK home, thus releasing equity built up in it, or arranging a mortgage on the Cyprus property. remortgaging is often the preferable route for buyers, as releasing equity in a UK property means that the second home can be purchased for cash, effectively, without the need for another mortgage. However, rising property prices in Cyprus may mean remortgaging is not an affordable or viable option for everyone. Euro Mortgages Euro mortgages are now available in Cyprus the island has now fully adopted the European currency. This makes a euro mortgage an attractive proposition for many homebuyers, particularly those who live on the island and receive their UK pension in local currency. Costs Several fees and taxes are payable when buying property in Cyprus. These generally amount to between 6% and 7% of the purchase price and include:
Transfer of ownership This is accomplished by a straightforward procedure through the Cyprus Land Registry Office. the buyer may undertake this himself, though more commonly a solicitor will be used. TaxationCyprus’s taxation system is similar to that of the UK. There is a double taxation agreement between the two countries, meaning that tax is paid in one or other country, not both and usually in the country where the higher tax is levied. In Cyprus, for non-residents alike, there is no gift tax or inheritance tax. Personal taxation: Non-residents Non-residents are subject to income tax only on income earned in Cyprus. This includes income from letting property, which is taxed at progressive rates of up to 30%, depending on the amount. Non-residents may also be liable for capital gains tax (CGT) on the profit from the sale of a property, according to individual circumstances. Property sales are subject to CGT at a rate of 20% on the gain, although the first £12,000 of the gain is exempt.. For tax purposes, a foreign national staying in Cyprus for more than 183 days during a tax year (1 January to 31 December) is considered a resident. The 183 days need not be consecutive. Other taxes Residents of Cyprus are also subject to other taxes, including a contribution for ‘passive’ income, for example rental income. VAT at a rate of 15% is levied on most goods; a reduced rate of VAT of 5% is charged on some products, mainly food and agricultural products. Local taxes The annual Immovable Property Ownership Tax amounts to approximately £60-£180 sterling, depending on the value of the property. An annual tax of £24-£36 may also be levied by the municipal authorities, as may a sewage tax of £24-£48. Tax Immigrant retirees are permitted to import personal effects, including household goods and furniture that are for personal effects, including household goods and furniture that are for personal use and that have been used (i.e. are not brand new). Additionally, no duty is charged on the importation of a car and retirement age immigrants are granted the concession of not being charged duty on two cars. Money MattersCyprus changed to the Euro as official currency on 1st January 2008, putting it in line with the majority of Europe and making Euro mortgages the standard on the island. Banks, bureaux de change and ATMs are available in larger towns and tourist resorts. Usual banking hours are 8.30am to 12.30pm, Monday to Friday and also from 3.15pm until 4.45pm on Mondays. Major credit cards are widely accepted, as are travellers’ cheques. It is advisable to carry the latter in pounds sterling or US dollars to avoid additional exchange rate charges. Passports, visas and residencyPassports and Visas To enter Cyprus, British citizens need a passport which must be valid for the duration of their stay. A visa is not required. Residency Cyprus does not require EU citizens (including British nationals) to have residence permits. They can, however, be useful in certain circumstances (when applying for a driver’s licence, for example, or for tax purposes) as official proof of residence. A non-Cypriot who owns property in Cyprus is entitled to a residence permit. As long as he can prove that he and his family are self-supporting, one will be granted without difficulty. |
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