The island is known as the Republic of Cyprus and is divided into two parts: 59% of the island is under the control of the Republic of Cyprus, the rest is under the control of Turkey and is known as the Turkish Republic of Northern Cyprus (however, this is not recognized outside of Turkey).
Cyprus is the third largest island in the Mediterranean behind Sicily and Sardinia, it has the warmest climate with average temperatures of 24C during the day and 14C at night and has been part of the Euro Currency since 2008. It has two international airports located in Larnaca and Paphos.
When you find a property for sale in Cyprus you normally put down a small deposit, around 1% to 2% of the purchase price as a ‘holding deposit’ while the contracts are being drawn up and is a legally binding deposit. Once the contracts are signed, a 10% deposit is paid on resale property and 20-30% on new construction. Balance is paid upon completion.
During the process you will need to submit the contracts to the land registry along with a request for ‘Transfer Approval’ which may take a while to get and you may have completed and moved before receiving it but this is not out of the question. the rule. You will need to provide references and the bank would be one of these.
The costs involved in buying property in Cyprus can be quite complicated and there are two fees, stamp duty and property transfer tax, thereafter known as real estate tax which is paid annually.
Documented Legal Acts Tax: Charged at 0.15% on the first €170,860 and then 0.2% for any excess, so for a €300,000 property you would pay (1.5% of €170,860 = €256) + (0.2% of €300,000) – €170,860 = €129,140 = €258.28) Total Documented Legal Acts tax payable = €514.28.
Property Transfer Tax / Real Estate Tax: The tax rates change from January 1, 2012 and until that date the rates amount to €85,430 = 3%, from €85,431 to €170,860 = 5%, starting at €170,861 and more than 8%. You can take advantage of the fact that you are a married couple and can buy jointly, this will cut the price of a property in half for joint ownership and reduce your tax liability.
Starting in January 2012, the real estate tax will change and the revised figures are shown below, the property value will also be reassessed and since current property values are based on 1980, it is expected that increase.
Property value as of January 1, 1980
- Up to 120,000 euros: 0%
- 120,000 – 170,000: 0.4%
- 170,000 – 300,000: 0.5%
- 300,000 – 500,000: 0.6%
- 500,000 – 800,000: 0.7%
- More than 800,000 euros: 0.8%
Mortgages are available and proof of income is required, mortgages are calculated on your income and expenses, so all your other mortgages/rents/loans etc. are taken into consideration. If you receive income from other properties, you can put it toward your income, although there is no guarantee that it will be counted. The maximum LTV (Loan to Value) is 70%, although in some circumstances, especially for first-time buyers, it can be as high as 80%. If you are looking for a Mortgage in Northern Cyprus currently only being handled for Turkish or pre-1974 foreign titled properties, the maximum LTV is 65%.
Location, location, location, everyone asks where is the best place to buy, well Paphos, Limassol and Larnaca are favourites, of course it depends on what you are buying for, a holiday home or a permanent residence, either way you We recommend that you take your time and visit regularly until you find the best location for you and your family.
Properties for sale in Northern Cyprus:
People should be very cautious when buying property in the Turkish Republic of Northern Cyprus, there is still a very real legal issue around property and this is not to say that all properties are affected, but make sure you check and verify everything, if it is possible to look for Turkish property from before 1974 or with foreign title, although these are harder to find these days.