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Work
- How easy is it to find work in Cyprus,
and will I need a work permit?
Since
Cyprus entry into the EU on May 1st 2004,
all EU citizens have the right of free
movement, to live and work in Cyprus
without restrictions provided that they
hold a EU passport. However, non-Cypriot
citizens must still follow the formality
of registering at the local immigration
office in order to obtain a social
security number. Finding a job in Cyprus
can be done through visiting the Labour
Office, or simply through the local
newspapers. Now that Cyprus is a EU
member, the co-operate network EURES can
be used to assist mobile workers in all
aspects of living and working in EU
countries such as Cyprus. The EURES
website is http://www.europa.eu.int/eures/index.jsp
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What
is the procedure for obtaining temporary
residence in Cyprus?
Temporary
residence is easily obtained after the
fulfilment of certain investment and
immigration requirements. Applications
forms are available from any of the local
immigration offices. On completion of
these forms, they should be returned to
the immigration office with the following
supporting documentation:
A certificate from a local bank confirming that the applicant holds
an external account with that bank.This
document should also indicate the current
account balance.
- Passport
- Three passport photographs
- CYŁ 20.00 (application processing fee)
- A copy of a sales contract, or a rental agreement.
- Letter of guarantee of CYPŁ300 obtained from your Bank in Cyprus
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What
are the Taxation liabilities?
The
following are very brief notes about the
most obvious forms of taxation.
You are advised to seek professional
advice to confirm this information and for
more complicated personal situations,
including self-employment or running a
company.
Double taxation agreements exist between Cyprus
and most European countries.
Cyprus
Double Taxation Treaties exist with;
Austria,
Greece, Romania
Bulgaria, Hungary, Russia*
Canada, India, Slovakia
China, Ireland, Sweden
Czech Republic, Italy, Syria
Denmark, Kuwait, United Kingdom
Egypt, Malta, United States
France, Norway, Yugoslavia**
Germany, Poland
N.B. Out of the 26 treaties concluded by
Cyprus, only 4 countries (Canada, France,
UK and USA) have exclusions regarding
Cyprus offshore entities. However, even
these treaties can be used advantageously
with some creative and careful tax
planning. Further information can be
obtained upon request.
*
The treaty applicable is between Cyprus
and the USSR, Armenia, Belarus, Kyrghystan,
Moldova, Tajikistan, Turkmenistan, Ukraine
and Uzbekistan.
**
This treaty applies to the Republics of
Serbia and Montenegro. Slovenia and
Croatia have also adopted the double
taxation conventions.
Individuals
permanently resident in Cyprus
are taxed here on the following types of
income:
- Employment income for work performed in Cyprus
- Profits from a business activity, which is
carried out though a permanent
establishment in Cyprus.
- Pensions in respect of employments exercised in Cyprus
(except for pensions paid from a fund
established by the Cypriot Government
or any local authority.)
A
person living and working permanently
in Cyprus will have their income
taxed as follows:
Taxable
income
Rate
Up to CYP 10,000
Nil
CYP 10,001 to CYP 15,000
20%
CYP 15,001 to CYP 20,000
25%
Above CYP 20,000
30%
Employers
and employees are required to make
National Insurance Contributions at the
rate of 6.3%. The information is published
in good faith and is correct to the best
of our knowledge, but please check the
details with independent sources before
relying on it.
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Can
I receive my pension in Cyprus?
UK
pensions are easily transferable to
Cyprus. For individuals, CYP 2,000 of
pension income from abroad is received
tax-free p.a., and thereafter income tax
is applied at the very low rate of 5% to
amounts above this. Additionally, Cyprus
has double taxation agreements in place
with many countries including the UK to
prevent double taxation of income.
Your UK/ROI retirement pension or other benefits can be paid directly into your bank account at home or abroad. For further information, visit the following websites:
UK - www.dss.gov.uk
ROI - www.welfare.ie.
According
to the tax system, you must declare your
pension income to the tax authorities.
There are two methods of choosing how your
pension will be taxed, outlined below:
1st
Method
CYŁ 0- 2,000 0%
CYŁ 2,001 and above 5% flat rate
2nd
MethodCYŁ 0 - 6,000 0%
CYŁ 6,001-9,000 20%
CYŁ 9,001-12,000 30%
CYŁ 12,001 and above 40% flat rate
These
methods are based on cash transfers to
Cyprus.
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Up to how much land am I allowed to purchase as
a non- Cypriot?
At
present, there are restrictions on the amount of
land a non-Cypriot can purchase. Currently, this
stands at 3 donums (4014m˛), however in 2007,
this restriction will be reviewed. Compared to
many countries buying property in Cyprus is very
easy. As a non-Cypriot you are entitled to buy a
freehold property for your personal use either:
a)
An apartment or a house or
b) A villa on a building site not exceeding 4000
sq.m or
c) A piece of land not exceeding 4000 sq.m for
the purpose of erecting a house within a
reasonable time frame.
It
is freehold. The system of leasehold is almost
unknown in Cyprus.
If you have a temporary residence permit, you may only register one Cypriot property in you name, but you can purchase several properties in other people's names, such as a spouse and/or children. If you apply for permanent residence however, you can register as many Cypriot properties as you wish in your own name.
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What are the terms of payment when buying a
property with developers?
Usually a CYP 1,000 deposit fixes the price and
removes the property from the market. After
signing the contact, 30% of the sale amount is
required within one month of signing. The
remaining amount is paid in instalments varying
on the constructed development you are going to
engage in.
If you have a property to sell before
and you have around 30% of the purchase price available, without selling your home, you do have options available to you. Provided that the property that you purchase will not be ready immediately, you can make arrangements with the developer to make stage payments throughout the build, with a final payment upon completion. You can reserve a new property in Cyprus and secure the price in CYŁ, and then sell your own property within the timescale agreed between yourself and the developer. If your own property sells before your new home is finished, you simply move out to Cyprus, rent a property, and start to enjoy your new life in the sun! The money you spend on renting a property in Cyprus is normally offset by the increase in property value gained, and of course, the lower living costs. You then get a brand new home to move into, without any of the normal stresses and strains associated with trying to sell and buy. Some people do arrange a short term re-mortgage of their own home to enable them to do this.
If you do not want to re-mortgage or arrange bridging finance (overdraft facilities) and you do not have 30% of the purchase price available, you will need to sell your home before you can purchase in Cyprus.
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What are
all the costs?
Your
fixed purchasing costs
are likely to be made up as follows:
-
Property
price
-
solicitors
fees
-
mortgage fees
and any interest
-
property
transfer tax
-
stamp duty
-
annual
property tax
-
VAT (unless a
resale or planning permission obtained before
May 2004)
-
Council Tax
equivalent
-
maintenance
charges if there are shared pools, gardens etc
-
obligatory
fire and earthquake insurance
The
cost of the property plus any mortgage
fees and interest
The
solicitor's fee - around CYP 900 to CYP 1,000
Council of Ministers Application: CYP 100 - 200.
Often included in your solicitor's fee.
There
are other costs, which vary according to the
value of the property you buy.
The payment of Property Transfer Tax
is required in order to transfer the Freehold
ownership to your name and is payable once the property
is registered in your name at the Land Registry
Office. This process cannot be completed until
after the Council of Ministers approval has been
received. In reality, this means that it will up
to three years from purchasing your property
before you actually pay the tax.
Transfer of ownership takes place by a
simple process of registration at the Land
Registry Office and the issuing of a title deed
after completion and delivery. This can be done
either by you personally or by a Power of
Attorney to your Solicitor. A prerequisite for
registration, in the case of non-Cypriots, is
evidence that the property has been paid for
with foreign exchange and approval by the
Council of Ministers of Purchaser's application
to buy property in Cyprus. These formalities can
be taken up on your behalf by your
solicitor.
Once
your Contract has been agreed and signed, it is
necessary for you to make an application to the
Council of Ministers to grant its approval for a
non-Cypriot to acquire what is known as "immovable
property". Your solicitor will
make this application on your behalf.
At this date, no UK citizen has ever been
refused this approval.
This is a routine procedure that can take up to
12 months to complete, but there is no
restriction on you taking full possession of
your property pending the granting of the
approval.
The system provides for the following:
(1) You can live in your property from the
moment you take delivery of it, prior to the
Council of Ministers granting approval.
(2) You can re-sell your property during this
time and the process does not affect inheritance
rights.
(3) Should approval not be granted, you can
re-apply.
(4) Should approval not be granted, you will
have seventeen (17) years in which to sell your
house.
However,
before the registration of the completed
property the purchaser should pay the transfer
fees, which are payable to the Land Registry
office.
The transfer fees range is shown on the
following table:
Property Value CY Ł
Transfer Fees Accumulated Transfer Fees
(CY Ł)
CY Ł 0 - 50,000
3 %
CY Ł 1500
CY Ł 50,000 - 100,000
5%
CY Ł 4000
CY Ł 100,000 and above
8%
Example:
Property valued CYŁ 50.000 the purchaser should
pay CYŁ 1.500 and for CYŁ 100.000 the amount
of CYŁ 4.000
Method of charging: if a property has been
bought jointly by two or more people i.e. if
their names are on the Contract of Sale, then
the cost of the property may be divided equally
between those owners. The tax will then be
charged to each owner for their portion, meaning
that the individual cost will fall into a lower
price band. The grand total will then be less.
The purchaser is liable for Stamp Duty. This
is charged at the rate of CYP 1.50 per thousand
up to the value of CYP 100,000 and thereafter at
the rate of CYP 2.00 per thousand. This duty
should be paid within 30 days of signing the
contract and your solicitor or the property
developer will help you deal with it.
Example: Purchase price of property CYP 155,000
CYP 100,000 at CYP 1.50 per 1000
- CYP 150
CYP 55,000 at CYP 2.00 per 1000
- CYP 110
Total Stamp Duty CYP 260
The
registered owner of a property is liable for an
annual tax, based on the value of the property.
Value
CYP
Annual
tax per thousand
Up to 100,000
exempt
100,001 to 250,000
2.00
250,001 to 500,000
3.00
Over 500,000
3.50
However,
the charges are based on the current market
value of the property as at
1st January 1980. In practice
therefore, this means that you are unlikely to
be liable for the tax as the law stands at
present.
The
decision to charge 15% VAT on new build property
has been passed, with the exception of projects
or buildings which have already applied for the
planning permit prior to the 1st May 2004. This
decision affects all new projects coming onto
the market, but the price increase to clients
will be closer to 10% due to some of the tax
being applied to materials used. There is no VAT
applied to the purchase of land up until 2007.
VAT is also exempt for re-sale properties.
Your
local authority will make an annual
charge to cover such services as street
lighting, refuse collection etc.
The amount depends upon the area and the size of
the property and ranges between
CYP 50 and CYP 180 per annum at present.
If
you buy a property within a complex with shared facilities, such as
communal swimming pools, gardens etc., you will probably
be liable for an annual fee to cover the
maintenance of these facilities. This may be
charged by the developer of the property
or by a management company appointed by the developer
or by a homeowners'
association. This obligation should be apparent
when you purchase
the property although an annual fee may not yet have been fixed.
The communal charges cover maintenance of the communal areas
in a development. For example, the garden,
swimming pool etc will need maintenance. They
vary from project to project, but generally
range from around CYP 450 - 600 p.a.
Cyprus
law obliges you to take out fire and earthquake
insurance on your property,
even if it is an apartment within a large block.
You will also need, of course, to take out full
home and contents insurance on
your property,
once you have taken delivery of it. There are
many, many schemes available, and we can help
find you one.
If you are planning to rent out
your property, ensure that the
insurers are aware of this, so that public
liability is covered.
As a guideline, you should anticipate paying
between CYP 1.00 and CYP 2.00 per thousand
pounds insured.
The
utilities - electricity, water
and telephone - are all billed
every two months by the relevant authorities,
based on metered usage. All utility bills can be paid directly from your local Cypriot bank account. Normally a direct debit
can be set up, so it's quite straightforward.
Costs will vary widely depending on the amount
of equipment in use and the time of year, but
average bills for a permanent household may be:
Electricity
CYP 30 every two months
Water CYP
10 - 20 every two months
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What
safeguards are in place to protect my
investment?
The
land registry in Cyprus is based on the British
system, and safeguards the purchaser’s rights
in many ways. Above all, it provides a legal
instrument called “specific performance.”
Once the sale agreement is signed and a deposit
of 30% paid, the contract is deposited at the
Land Registry to protect the purchasers
ownership rights until issuance and transfer of
the title deeds into your name. This cannot be
withdrawn by anyone and ensures no one but the
purchaser can lease, sell, transfer or mortgage
the property. If clients wish, a bank guarantee
for issuance of the title deeds of your property
can be provided, however the cost is borne by
the purchaser.
Specific
Performance - This process prevents the seller /
developer from re-selling a property to another
buyer and provides an absolute safeguard to the
buyer until the application to the Council of
Ministers has been made and approved.
The Contract of Sale must be deposited at the
Land Registry within two months of being signed
and stamped. Your solicitor will do this as part
of his duties.
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How much does it cost to transfer funds to Cyprus?
When you need to purchase Cyprus pounds, we can
refer you to a foreign exchange dealer, who is
able to offer both preferential currency rates
and free international transfers to clients.
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Can
I re-sell my property and how do I go about it?
Yes,
we can sell your property for you and this can
be done for a new build even after the 30% has
been deposited and transferred to your name
through the contracts. Some use this as an
investment method, receiving the increase in
prices during the building period for an outlay
of just the deposit.
There are no restrictions on the selling of your
property. Non-resident Aliens who purchase a
holiday home with foreign currency may take out
the proceeds of the sale in foreign exchange as
follows:
at point of sale, a sum equal to the purchase price
subsequently the profit element at a rate of
CYŁ50,000 p.a.
Property Sales in Cyprus are subject to Capital
Gains Tax at a rate of 20% on the gain, however
the first CYPŁ 10.000 is exempted.
Capital
Gains Tax
is levied at 25% on profits arising from the sale
of a property.
However, when "foreign" owned property
is sold, there are generous allowances
and exemptions from the tax. The
"gain" also takes inflation into
account. Remember to keep evidence of
improvements to your property
after taking possession of it, such as invoices,
as these will be useful when the
"gain" is
calculated
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Is
it difficult to get a loan in Cyprus?
You
will need a bank account in Cyprus in order to
complete your purchase, probably with both a
Sterling account and a Cyprus Pounds account.
This will allow you to transfer funds from the
UK and then make your progress payments on the
new property. You can also use it for
transferring pension, investment or other income
out to Cyprus.
Banks in Cyprus have very modern, up to date
systems and provide a wide variety of services,
including Internet banking that can be accessed
from the UK. Opening accounts is a simple
process.
All banks offer mortgage schemes (there are no
Building Societies in Cyprus).
The banking system in Cyprus is similar to the
British system. Non-Cypriot citizens may open
foreign currency and local deposit accounts
without difficulty therefore with a foreign
deposit account, payments and transactions can
be made. The procedures for extending foreign
currency loans to non-residents for the
acquisition of immovable property in Cyprus are
fairly easy. The terms and conditions of the
loan facility are as follows:
-
Amount
–
No maximum amount in any one of the three
major currencies, Euro, US$ and Sterling.
-
Repayment
period
– Maximum of 10 years (Currently being
revised and extended) 15-20 years lending
period for Cyprus Pound (CYP)
-
Customer’s
Contribution
– usually 30% of the total cost payable
upfront prior to the disbursement of the
loan. 70% can therefore be financed. There
are some who will offer 80% finance.
-
Interest
Rate
– Sterling Rate (LIBOR) + 2.5% (Currently
being revised, and will eventually be less).
-
Rates
for Loans
– 4.5% for Euro and 6% for sterling (rates
are subject to change).
-
Arrangement
Fees
– 0.5% on the loan amount payable in
advance.
Security
documents required include: first mortgage on
the purchased property or a letter of guarantee
issued by the seller of the property and
assignment of the applicants right on the
contract of sale (the contract of sale should be
registered at the Land Registry), personal
guarantees of one guarantor (not required for
joint applications), assignment of fire
insurance.
Kindly note that the above terms and conditions
can be amended at any time subject to the Banks
Policies and Regulations. Each application will
be evaluated on its own merit and its approval
or rejection will be up to the banks Discretion.
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How
much rental income can I get from my property?
This depends on the rental options you agree
with a developer, if they are offering a rental
package. Typically it might be:
- Seasonal
Rental Agreement.
This allows you to use your property upon
request, provided you give one months
notice and no agreement with visitors for
rental bookings have been made in advance.
- Tenancy
Rental Agreement.
This allows you to earn rental income
based on one or more tenancy agreement
which will be signed with tenants and / or
a combination of seasonal and tenancy
rentals.
- Rent
on your own and Utilise Management Services.This allows you to rent out your property yourself,
and use developer’s services to clean
and maintain your property and do the
laundry.
You
can use an agency if the developer does not
offer a rental service. You can manage rentals
yourself, if you wish, though it’s simpler to
use an agency who might charge between 20-30%,
but you are saved advertising costs. It’s
false economy, generally, to skimp on these
charges, and look for some rental guarantees,
remembering that agencies or developers often
want the whole season, so your own access may be
limited. See our guide to letting.
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Can
I bring My furnture with me?
We can advise on those developments that offer furnished properties or furniture packs readily for sale and discuss this with the sales team on your behalf
Can
I rent a property long term?
If
you wish to move to Cyprus before your property
is completed, we are happy to help arrange
long-term rental accommodation for you. Just let
us know when you wish to come to Cyprus, what
type of property you would like to rent and we
can put you in touch with a number of sources.
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Will peaceful co-existence continue between Northern and Southern Cyprus?
Since
the Southern part of Cyprus has joined the EU on
May 1st 2004, peaceful co-existence with the
Northern side will be provided. Already Turkey
is a candidate for accession to the EU. Though
political pressure continues, in effect the
partition arising from the 1974 invasion has
brought stability.
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Why
buy in the South, when prices are cheaper in
Northern Cyprus?
Secure title deeds are those with a pre-1974
Turkish provenance or British provenance, which
are difficult to find therefore making it risky
to purchase property in the North. Title deeds
dated from 1974 when the TRNC gave Turkish
Cypriot refugees from the Cypriot homes and land
in the South are not recognised anywhere but
Turkey and the North of Cyprus. Buying in the
North is also an act of taking part in a
political conflict, which has been taking place
for more than 30 years. Thus investing property
in the North is not a secure investment. Please
ask for further details if you are not sure -
there is a test case ongoing at present seeking
to apply a Cypriot court judgement in the UK,
and claiming on the UK assets of a couple who
bought a Cypriot owned house from a Turkish
company. We strongly recommend you do not take
this risk - there are many other cases likely to
arise once this test case is concluded.
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Is
there crime in Cyprus?
Cyprus is virtually crime free and that is why
it is such a popular destination for tourists.
Street criminality is absent in Cyprus.
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Solicitors
You
must have a solicitor inCyprus
in order to complete a purchase
and you should consult with one before
going ahead. In general, solicitors will offer
you a free consultation meeting in order to meet
you, establish a relationship and give you
general information about their services and the
process of house buying in Cyprus.
They will then charge a fixed rate for your property
purchase, agreed in advance.
The
solicitor will do any necessary searches on your
property, draw up the contract and carry out the "Specific
Performance" and Council of Ministers
application. (Please see information below) The
solicitor will also be able to take your Power
of Attorney if you do not intend to live
permanently in Cyprus, in order to
carry out official business with banks or
government authorities.
Please ensure that the solicitor you choose is
independent of the company from which you are
purchasing - some offer their own solicitor for
free, but you can imagine the conflict of
interests should you have a complaint with his
employer. We can recommend someone to you.
It
is advisable to make a will in any country where
you have immovable assets you would like to pass
on in a certain way. Importantly, Inheritance
tax has been abolished in Cyprus.
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Are
there reputable International Schools in Cyprus?
Yes,
all major towns have reputable international
schools. These schools offer diplomas equivalent
to GCE's for entry into British universities,
and achieve high academic standards.
In addition to the public schools, private elementary and secondary schools for English, French, Russian and Italian speaking pupils are available. Tertiary education is provided at the University of Cyprus, as well as at a number of private English language colleges that offer accredited undergraduate courses in various fields including business studies, marketing, economics, computer studies … and a whole host of other disciplines.
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Are
there any Health Insurance schemes in Cyprus?
Yes
there are several companies who operate schemes
here. The level of cost, depends to a very large
extent on the following factors:
·
Your age and medical condition
· Level of cover required.
We
have a contact we can supply for this.
The healthcare in Cyprus is extremely efficient and available to all EU residents. As a British or Irish resident, you are entitled to get healthcare through the public system in countries of the European Union
(EU), European Economic Area (EEA) or Switzerland if you become ill or injured while on a temporary stay there. Until now, you needed an E form - such as the E111 or the E128 - to get such treatment. Now, these paper forms are being replaced by the European Health Insurance Card. One card is needed for each individual or member of the family. For more information, go to:
UK - www.dh.gov.uk
ROI - www.ehic.ie.
Although there is no national health service as such in Cyprus, the cost of medical treatment in governmental hospitals is very low. Those wishing to consult medical experts privately will find a wide choice of competent doctors, specialists and surgeons practicing on the island.
The standard of medical treatment provided to citizens is high and continuously improving. Additionally, a number of companies offer medical insurance schemes that cover excellent and immediate healthcare. Diverse schemes are tailored to individual needs and budgets, and can cover hospitalisation at the hospital or clinic of your choice, outpatient consultations and drugs, and even nursing care at home.
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If I purchase a flat, what expenses would I have to pay?
In Cyprus there are no rates as known in most
countries in Europe. If a person has properties
registered on his name where the market value
exceeds CYPŁ 100.000, there is a property tax
on the excess value.
The annual immovable property ownership tax
imposed by the government is levied on the
market value of the property as of 1st January
1980 at the following rate:
Purchase
Price % Payable Cumulative Property Tax (CYŁ)
CYŁ 0-100,000 0.0% CYŁ 0
CYŁ 100,000-250,000 2.5% CYŁ 375
CYŁ 250,000-500,000 3.5% CYŁ 1250
CYŁ 500,000 and above 4.0%
The
owner apart from the expenses of telephone,
water and electricity for which there are
separate meters, has to meet a proportion of the
common expenses e.g. for the lightening and
cleaning of the common facilities and the
maintenance of the lift (and of course the
upkeep of a garden and a swimming pool where
there is one). Common expenses are comparatively
insignificant - for a 2-bedroom flat they do not
normally exceed Ł 25 Cyprus pounds per month on
average.
A clients committee can arrange common expenses
administration.
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If I am moving to Cyprus to live, will I be able to take my dog/cat with me?
A. Pets may be brought into the country provided a licence has been obtained in advance from the Department of Veterinary Services in Nicosia. A house quarantine period of six months may be imposed. For more information, please call:
The Pets Travel Scheme in the UK on 08702 411710
The Animal Health and Welfare Division in Ireland on 01 607 2827.
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How do the Cypriots treat foreigners who live there?
You will undoubtedly find your local hosts to be very tolerant, family orientated and friendly. Foreign arrivals are seen to be contributing to the financial growth of the island.
********
Is the cost of living really much lower?
A. The relatively low cost of living in Cyprus is definitely one of the advantages that appeals to the potential buyer. The island offers a full but comparatively inexpensive lifestyle. The local markets flaunt a wealth of colourful fresh fruit and vegetables, meat and fish … locally grown and produced … whilst the modern supermarkets are fully stocked with a large range of local and imported goods.
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Do I have any Duty Free Privileges?
These differ and the level of duty free
privileges will depend, on your circumstances.
As a guide, Personal effects, household goods
and furniture can be imported free of any taxes
by immigrant retirees, provided they are for
personal use and have been used for a reasonable
amount of time - approximately one year. There
are no import duties on cars and for retired
couples there is an additional concession of two
duty free cars
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Can I take out Insurance on my Property?
Yes. There are companies who will issue cover
for fire and earthquake damage. We can help find
a good company.
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