The commercial terms of the sale and purchase of property, including the amount and manner of payment, are governed by the agreement between the parties. After an agreement is reached, and perhaps after an advance payment is made, the seller must pay all taxes and dues and secure tax and other clearances necessary to transfer the property in the name of the buyer. These documents must be presented to the Land Registry for prima facie check, and if they are satisfied, they will set a date of the transfer. These include, the duly stamped contract of sale, if any, and the duly signed transfer form. On the date of the transfer the parties, or their representatives, must physically attend the Land Registry for the transfer process and physically deliver the originals of all necessary documents. If transfer fees apply, the Land Registry will officially determine the applicable amount of transfer fees, and the buyer must pay this at the cashier desk of the Land Registry and obtain a receipt, before the process can continue. Once done, the parties will attest that the payment is duly made in front of the land registry clerk, and if necessary, sign certain documents, and the transaction will be completed. The clerk will process the transfer and, as per current practices, will issue a new title deed in the name of the buyer.

Unless specifically agreed otherwise, it is the seller who pays the real estate agent. A minimum fee of 3% will apply, by law, irrespective of whether there is an agreement. Typically, commissions range from 5% - 10%, depending on the circumstances. The parties are free to negotiate and agree on final terms, including the amount of commission and payment terms. Brokerage is a service, so VAT applies on the commission amount. Commission is not due unless the transaction is complete. If paid in instalments, typically parties agree to pay the commission upon 30% payment of the purchase price. For more information see dedicated FAQ topic on real estate agents.

No, unless the property is newly developed (or deemed newly developed), or it is undeveloped land. Generally speaking, when selling property, like a house, an apartment, or an office, fully constructed and used for some time VAT does not apply. VAT will apply when selling a property which is under construction or newly developed or when it is undeveloped land. It should be noted that recent legislation imposes VAT on sale of developed and used property, if the property was delivered to the seller and it was used less than 2 years within 5 years from when it was constructed. If VAT applies the seller collects the VAT as part of the purchase price, and subsequently must register (if not already registered) with VAT and pay it to the authorities. It is typically 19% on the agreed purchase price, unless the buyer is eligible and secures a 5% reduced VAT approval. If no VAT applies, then Land Registry transfer fees will apply. Specific tax advice should be sought based on facts and circumstances. For more information on newly developed property and/or sale of land see the dedicated FAQ topics.

Yes, If the sale of the property was exempted from VAT, then transfer fees will apply. Other exemptions on transfer fees may be available for family transfers, group transactions, or under specific government schemes. In any event transfer fees are paid by the buyer of the property. For more information see the dedicated FAQs topic of transfer fees.

The buyer is responsible for paying transfer fees, if they apply. For more information see the dedicated FAQs topic of transfer fees.

If they apply, transfer fees are based on the land's market value, as determined by the Land Registry. They are based on a sliding scale, namely 3% for the first €85,000, 5% for amounts between €85,001 and €170,000, and 8% for amounts exceeding €170,000. A 50% discount applies to the total amount. There are several online calculators which can assist with calculation, including the official website of the Land Registry and several real estate agent’s websites. The market value of the land may follow the declared purchase price of the property, but the Land Registry is free to make their own determination of market value, which may differ. For more information see the dedicated FAQs topic of transfer fees.

Transfer fees, if applicable, are paid, after being officially calculated by the Land Registry on the date of the transfer, to the cashier of the Land Registry. No transfer of property can be affected unless transfer fees are paid, if they apply. Accepted methods of payment include banker’s draft, credit card and cash, or a combination thereof. For more information see the dedicated FAQs topic of transfer fees.

Stamp duty will apply if there is a written contract of sale for the sale of property. Unless agreed otherwise, it is paid by the buyer. For more information see the dedicated FAQs topic on stamp duty.

Unless agreed otherwise, the buyer will pay for the stamp duty on the contract of sale of property. For more information see the dedicated FAQs topic on stamp duty.

The amount of stamp duty depends on the value of the subject matter contract, namely the purchase price. For amounts up to €5,000: No stamp duty is charged. For amounts between €5,001 and €170,000, a rate of 0.15% is applied. For amounts exceeding €170,000 a rate of 0.20% is applied. There is a maximum of €20,000. There are several online calculators to assist with the calculation including the official tax authority website and real estate agent websites. It's paid 30 days from signing or, if signed abroad, 30 days from bringing the document into Cyprus. If the contract of sale is not duly stamped it will not be accepted by the tax authorities, for purposes of obtaining tax clearance, and it will not be accepted by the Land Registry for purposes of depositing the contract of sale for specific performance purposes. For more information see the dedicated FAQs topic on stamp duty.

Having a written contract of sale for land, duly stamped, and lodging it with the Land Registry creates an encumbrance on the land, duly recorded by the Land Registry and it further permits for specific performance. In other words, the seller cannot re-sell or otherwise dispose the property and the buyer, if they deem so, may apply in court to enforce the terms of the contract of sale, namely force the owner to accept the agreed purchase price and transfer the property to the buyer. Permitting the creation of such an encumbrance is detrimental to the seller in cases where the buyer fails or is unable to proceed with payment of the outstanding amount of the purchase price (or transfer fees), in accordance with the terms of the contract, in order to complete the transaction. The seller cannot mortgage, resell or otherwise utilize their land unless they reach a settlement or arrangement with the buyer to withdraw the contract of sale. Alternatively, they must undergo lengthy and taxing litigation proceedings. For this reason, sellers avoid releasing the physical contract of sale, duly signed, unless a significant amount of the purchase price is paid.

Property without a separate title deed cannot be legally transferred. For example, you cannot sell a specific room or space within a property. To do so the owner must legally undertake the process of division, if legally and practically feasible. Having said that, you can freely enter into an agreement to sell, licence or otherwise dispose certain contractual rights over property, or part thereof, without title deeds, including the right to use or option to buy etc. For land see the dedicated FAQ topic.

No. Only if the part has a distinct title deed or has been legally sub-divided can a seller sell, and a buyer obtain title of, a specific part of the property. However, a seller can sell a portion of the property, for example 1/3 (one third) but this is an undivided share, meaning joint ownership with others. All co-owners, having an undivided portion on the property, own a share of all the property and not any specific area. The co-owners can enter into a separation agreement which can be lodged with the Land Registry for specific performance, whereby the co-owners, can designate and allocate specific area(s) and/or rights within the property to each co-owners. This is legally binding and enforceable. For land see the dedicated FAQ topic.

Yes, non-EU nationals who legally obtained property in Cyprus by written consent from the District Officer, in accordance with applicable law, can freely sell their property.

A reservation agreement is a preliminary contract where the seller agrees not to sell the property to others for a specified period, while the buyer completes the due diligence exercise and the parties negotiate a final contract of sale, if any. It typically involves a refundable or non-refundable deposit and can provide clarity on initial commercial agreed terms such as the purchase price, payment terms and timeframe of entering into a formal contract of sale and/or completion of the transaction. A reservation agreement is not legally necessary. It's advisable to have one in place where there are mortgages and other complications, which create the need for some time before the parties can enter a formal contract of sale. For instance, where the property is to be bought under a newly established company. Another reason is to lock the negotiated price creating a burden, namely the deposit, before either party changes their mind freely. For the seller, retaining the deposit reflects the opportunity cost of having the property out of the market for the reservation period.

Yes. When selling property, the owner must generally pay 20% capital gains tax. If the seller is a company, customarily dealing in land as part of its activities, then they will probably pay corporate tax at 12.5%. If the said company later distributes dividends to its Cyprus tax resident owner, they will have to pay 17% special contribution for defence (SDC) and 2.65% general health system (GHS) contribution on the amount of dividends declared. If a seller is a natural person which systematically and/or professionally deals in land, as a commercial matter, the tax authorities may deem them as a “dealer in land” in which case income tax shall apply at the highest level, namely 35% on the sale price, plus 2.65% GHS contributions. In addition to transaction specific taxes, as aforementioned, a seller of land must pay, up to the date of the transfer, annual property taxes, water and sewerage dues and of course all utilities and other bills outstanding. Exemptions may apply so specific tax advice must be sought.

Capital gains tax is 20% on the net profit from the sale. The net profit is calculated as the sale price minus the acquisition cost minus permitted deductions. The acquisition cost is adjusted for inflation based on the Cyprus Consumer Price Index (CPI). Permitted deductions include transfer fees and stamp duty, capital improvement (such as cost of renovation, extension or maintenance, if it can be supported by relevant invoices) and professional fees related to the acquisition, such as lawyers, chartered valuers and real estate agents. There is a lifetime deductible allowance which varies depending on the nature of the sale, ranging from approx. 17,000 for any sale to 85,000, for sale of a primary residence. The final determination of the amount is made by the tax authorities.

When you own a property in Cyprus, each year, you need to pay a municipality property tax to the local municipality, refuse collection tax to the local municipality and a sewerage tax to the local District Local Government Organisation (DLGO), if your property is connected. You must present a receipt of up-to-date settlement of each of these taxes and dues before the Land Registry will permit the transfer of property. A property owner may also pay a cemetery tax (if applicable) to the local municipality, common expenses for a property within a co-ownership complex (if applicable), and of course utilities concerning the property, including electricity, to the Electricity Authority of Cyprus, and water supply, to the local DLGO. The amounts are customarily a very small percentage on the area or assessed value of the property, as applicable, and may vary between each municipality.

Yes, but ideally this must be explicitly stated in a written sales contract as a material commercial term of the transaction, namely payment terms. Payment in instalments is typically the case where a seller of property does not have readily available funds to settle capital gains and other taxes so, an advance payment is made upon signing the contract, for example 30% of the purchase price, and the remaining upon transfer. The buyer secures the original contract of sale and lodges it with the land registry, thus blocking the disposal of the land and safeguards their advance payment. The seller uses the advance payment to settle all taxes and secure all clearances to complete the transaction.

No, unless it is below EUR 10,000. Recent anti-money laundering legislation prohibits real estate transactions to be made in cash, in an amount above the aforementioned, with very severe consequences to those in breach including fines and imprisonment. In any event all forms of payment, including cash, must be duly legally declared for tax purposes, whether embedded in the purchase price or otherwise, again with very severe consequences to those in breach including fines and imprisonment.

There is a very wide range of legislation which is relevant to the sale of property, or aspects thereof. This includes the Immovable Property (Tenure, Registration, and Valuation) Law, Cap. 224, Contract Law, Cap. 149, Transfer and Mortgage of Immovable Property Law, L.9/1965 (as amended), Specific Performance Law, L.81(I)/201, Income Tax Law, L.118(I)/2002 (as amended), Capital Gains Tax Law, L.52/1980 (as amended) Value Added Tax Law, L.95(I)/2000 (as amended), Special Contribution for the Defence Law, L.117(I)/2002, The Assessment and Collection of Taxes Law, L.4/1978,The Local Authorities Laws, Land Registry Fees Law, Cap. 219, Planning and Housing Law, Cap. 96, Anti-Money Laundering Law, L.188(I)/2007 (as amended) and others.

Legally it is not required. A verbal agreement is valid. However, a written agreement is strongly recommended as it clearly outlines the legal and commercial terms of the sale. As a rule of thumb, where the transaction is “clean” namely if there are no mortgages or encumbrances, and payment is made in one lump sum upon transfer, there is no need for a contract of sale. In this case the land registry form required to transfer the property, duly signed, will suffice. If there is a mortgage on the property or if otherwise the payment is made in stages a written signed agreement is strongly advisable, and will likely be sought by the buyer, to also incorporate a recent search on encumbrances and bank waiver, as to safeguard their right on any advance payments against the seller and third parties. A signed contract of sale, if properly stamped by the buyer, allows the buyer to lodge it at the Land Registry for specific performance, namely, to enforce its terms. This creates an encumbrance of the property thus the seller should generally not sign and deliver contracts of sale, unless a significant amount of the purchase price was paid to them upon signing.

Land is legally sold through a transfer process in the Land Registry. As a seller, you need to present identification (ID or passport), the relevant transfer form signed by the seller and buyer, proof of payment of capital gains taxes, in the appropriate format, proof of payment of property taxes to the municipality, proof of payment of sewerage and refuge fees and all other dues related to the ownership of the property. The buyer will also need to produce and furnish documents from their end, such as identification (ID or passport) proof of payment of transfer fees, if applicable (paid on the date of the transfer) and a duly stamped copy of the contract of sale (if one exists). If the buyer is a foreigner, they need the District Officer approval to own property. If the buyer is a company, all corporate documents. If the seller is acting through a representative, they need to also have a duly signed power of attorney, duly certified by a certifying officer, or otherwise legalized, if signed abroad.

Yes. Currently, property transfers in Cyprus cannot be completed online. Both parties (or their representatives) must physically visit the Land Registry. The seller or the buyer can alternatively appoint a representative through a valid power of attorney. The said representative must bring all necessary documents, to the Land Registry, including the original power of attorney duly certified by a certifying officer, or otherwise legalized, if signed abroad. The power or attorney can be general or specific, relating to the subject matter property.

If the property has a mortgage or any other encumbrance or legal restriction, it cannot be transferred unless the beneficiary of such a mortgage or encumbrance also attends the land registry, on the date of the transfer or before, and removes or lifts the said mortgage or encumbrance (or consents). This is typically done if such a beneficiary, for example a bank, is paid in full. In most cases, this is a commercial term of sale of the property, namely that part of the purchase price will be paid to the mortgagee or other beneficiary of the encumbrance, so they will permit the transfer. Where the property is mortgaged or encumbrance, it is critical that the seller communicates and coordinates with the beneficiary bank or other person in order to secure a “bank waiver” as it is commonly referred to, namely an undertaking from the bank or other beneficiary of an encumbrance, that upon payment by the buyer they will lift the mortgage. This is now a legal requirement, set by law, and such waivers have a standardized form and are included as annex in the contract if sale.