Selling property in Cyprus

The professionals you need to sell your property are a real estate agent and a lawyer. You might also wish to find a qualified valuer who will advise on the asking price for the property.

Relevant law: The Real Estate Agents Law No. 273(I) of 2004 and its amendment No. 118(I) of 2007.

It is not, strictly speaking, necessary to have legal counsel when selling property.

Yet, there are complications in any process of selling. Negotiating the terms and writing a good contract can be difficult. Filing the correct documents requires expertise. So, it is highly recommended that you use the services of a lawyer or law firm.

Because of personal data protection, there is not much your lawyer or yourself can do to check the economic strength of the buyer.

If the buyer is a company, the lawyer can perform a search at the Registrar of Companies to verify that the company is not bankrupt.

The transaction may look suspicious to your lawyer.

For example, the buyer will pay with a large amount in cash but cannot very well explain the source of the wealth.

The lawyer will then have to report to MOKAS (the Unit for Combating Money Laundering in Cyprus). MOKAS will investigate the situation.

Relevant law: the Prevention and Suppression of Money Laundering and Terrorist Financing Laws of 2007-2021.

See government guidance at icpac.org.cy: Guidance Notes on Suspicious Transactions/Activities (PDF)

A power of attorney is a way to avoid getting involved in the selling process. When you are too busy, or living abroad, an option is to give your lawyer power of attorney to carry out the whole transaction.

If you do a power of attorney in Cyprus, you must appear at a certifying officer (with ID documents). Then you will stamp the power of attorney with the certifying officer.

If you sign a power of attorney abroad, you must have it duly signed, notarised and apostilled.

Notarised means first signed by a notary public, then verifying the signature and stamp at the nearest Cyprus embassy or consulate. Some rules may vary depending on the legislation in your country. The Cyprus embassy or consulate will say if this is the case and explain what to do.

The main legal document in selling property is the contract of sale. In negotiations, you may need to make a so-called “reservation agreement”.

The reservation agreement when selling property is a separate agreement from the contract of sale. Under the reservation agreement, you promise to keep the offer open for the buyer for a certain period. The buyer pays a reservation deposit in exchange for the promise.

During the agreed period, the seller, buyer and their lawyers negotiate about the sale. They discuss the price, method of payment, transfer, etc.

If the two sides fail to agree at the end of the specified time, the property is again available for sale to a new buyer. The first buyer loses the deposit because the deposit is the price paid for the offer to stay open.

If the parties reach an agreement, they will finalize the terms.

If you are a business or company selling off-plan, discuss and agree on the technical details, the materials to be used and the costs. Discuss and agree on a doable timeline for the construction.

If you are a business or company, you can use a ready-made contract with your standard terms or adapt a ready-made contract to the situation. Your lawyer will ensure that the terms are fair and that there will be no trouble with the unfair terms in consumer contracts law of Cyprus. It covers the case where a business sells property to a non-business buyer.

The taxes that are paid when selling property in Cyprus are listed below.

The immovable property transfer levy in Cyprus is a tax introduced on 22 February 2021 and is payable in property transfers. The relevant law is N 12(I) 2021. Under this law, the seller must pay 0,4% of the amount they received for the property to the Central Agency for Equal Distribution of Burdens (CAEDB). The money collected by the CAEDB is used to aid the Cyprus refugees.

Source: portal.dls.moi.gov.cy

Communal fees in Cyprus are payable if you sell an apartment or other residential property with communal fees. You will pay the management committee of the block or the property management company responsible and get a declaration that you have no outstanding charges. You will give this declaration to the buyer.

Transfer fees and VAT are payable by the buyer. A reduced VAT of 5% is payable for first-time buyers of property for the first 200 sq m; all other buyers pay the average rate of 19%. No transfer fees are charged if VAT has been paid.

According to Home Owners Alliance (hoa.org.uk), “capital gains tax is payable when you sell an asset [such as a house] that has increased in value since you bought it”. That is, when the property is worth more than its “initial acquisition cost”.

Relevant law: Capital Gains Tax Law 1980 (52/1980); latest amendment N. 197(I)/2022.

When selling property as a business, you will not pay capital gains tax but income tax. The standard income tax for companies in Cyprus is 12.5%.

Then the land registry transfers the property and issues the title deeds in the buyer's name.

If you sign, stamp and deposit an assignment agreement, the title deeds will be issued directly to the buyer. When there is both a contract of sale and an assignment agreement, the title deeds will be issued in your name, and then you will have to transfer the title to the buyer. It is, therefore, more practical to use an assignment agreement.

If you delay transferring the title deeds for any reason, the buyer can apply for a court order of specific performance. Under this order, you must transfer the property to the buyer.

Note that to do this, the buyer must deposit the contract of sale to the Land Registry within six months of signing the contract.

If the delay is because the property is mortgaged, the buyer can pay the mortgage themselves.

Under the amended legislation (N. 132(I)/2023), the buyer must deposit a declaration together with the contract of sale. This declaration must be signed by the mortgage owner (bank) and yourself and say that if the buyer pays 95% of the mortgage, the mortgage owner will lift the mortgage from the property and confirm this to the Land Registry. Then, the Land Registry will transfer the property to the buyer.

Relevant law:

Sale of Land (Specific Performance) Law No. 81 (I) /2011 as amended by N. 132(I)/2023.

According to Land Registry and Mapping Department data, the real estate market performed significantly in 2023, with transactions surpassing 6 billion euros. The data for the fourth quarter of 2023, presented by the Royal Institute of Chartered Surveyors (RICS), record an increase in market value in all asset classes, with the most considerable rise evident in apartments; there is a 9,53% increase in apartments on a y-o-y comparison.

In sum, this might be a good time to sell. Remember that a lot depends on the marketability of the property (location, condition, particulars, and so on).

Check the prices of recently sold Cyprus properties.

For advice tailored to your personal situation and needs, seek the opinion of a realtor, surveyor, or financial advisor. This guide is for information only and does not give personal financial advice.

To make the rooms look large and the space show off, declutter, and remove bulky furniture. Some experts say that all personal items must be removed, too, so the viewer does not feel like an intruder. Others recommend leaving some personal touch so that the viewer gets into the “lifestyle” atmosphere of the place. A bit of balanced advice must be “don’t overdo it”. Make the space look airy and light, and do not leave all your personal belongings hanging around.

Finally: the real estate agent will advise on how to show off the property, what to say, and so on. By law, you do not have to reveal or talk about everything. However, answer all questions truthfully. Also, don’t try to hide problems by placing, for example, furniture in front of a damaged wall or in front of mold. Hiding problems might mean trouble (it is called “misrepresentation”, false statement, or hiding the truth).