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FAQ
GLOSSARY >>
- 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 an 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 an 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
- 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. We
can refer you to a tax advisor in Cyprus to answer any individual
questions you may have.
- 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 (4014m²), however in 2007, this restriction
will be reviewed.
- What are the terms of payment
when buying a property with APS?
A CYP 1,000 deposit fixes the price and removes the property
from the market. After signing the contact, normally 25%
to 30% of the sale amount is required within one month of
signing. The remaining amount is paid in instalments varying
on the construction period of development you are going
to engage in.
- 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.
Once the sale agreement is signed and the deposit paid,
the contract is deposited (by the buyer and/ or the seller)
at the Land Registry Office to protect the depositing party.
You as a purchaser get “specific performance”
protection safeguarding your ownership rights until the
issuance and transfer of the title deeds on your name. This
cannot be withdrawn by anyone party acting on its own and
ensures no one but the purchaser can enjoy future lease,
sale, transfer or mortgage of the property. If clients wish,
a bank guarantee towards safeguarding the issuance of the
title deed of his property, this can be provided albeit
the cost is borne by the purchaser. The APS legal team will
be happy to answer any questions that you may have on this
matter.
- How much are the communal charges?
The communal charges cover maintenance of the communal areas
in a development, like the gardens, the swimming pool, cleaning
of common corridors etc. They vary from project to project,
but generally form a negligible annual budget (e.g. CYP50
per month).
- 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.
- How much is VAT, and is it included
in the sale price?
Any project for which plans were submitted for planning
permit since 1st May 2004 and henceforth, has VAT incidence.
The rate of VAT is 15% on the purchase price. Any projects,
which have applied for planning permit prior to 1st May
2004 are not liable for VAT. This means that property currently
under construction could be purchased without having to
pay VAT. A “first” residence may qualify for
a 10% refund on VAT, but this is currently clear for Cypriots
and a government decision is still pending with regards
to EU citizens. VAT does not apply to land (building sites)
up until early 2008. VAT does not apply to resale properties
of any kind.
- Can I resell my property and
how do I go about it?
Yes, APS in their capacity as licensed estate agents (Reg.
No. 378) can undertake the sale of your property at a fee,
which is normally a percentage on the sale price. This fee
covers all marketing costs, potential buyer visits and feedback
reports.
- Do I need to make a will in
Cyprus?
It is advisable to make a will in any country where you
have immovable and/ or other assets you would like to pass
on in a certain way. Inheritance tax has been abolished
in Cyprus.
- Is it difficult to get a loan
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. 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 easy.
The terms and conditions of the loan facility vary between
institutions, but generally are as follows:
- Amount – No
maximum amount in any one of the three major currencies,
Euro, US$ and Sterling.
- Repayment period
– 15-30 years lending period for Cyprus Pound
(CYP)
- Customer’s Contribution
– normally 30% of the total cost payable upfront
prior to the disbursement of the loan. Hence, 70% of
the purchase price can therefore be financed.
- Interest Rate –
LIBOR + 2,5% (periodically revised, and will eventually
be less).
- Rates for Loans
– 4,5% for Euro and 6% for sterling (rates are
always 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 merits and its approval or rejection will be up to
the banks’ discretion.
- What happens if I pay the first
instalment and then the bank rejects us?
This risk is minimised as long as APS recommends you to
the bank and the deposit is in place.
- How much rental income can I
get from my property?
This depends on the state of the market, the yield levels,
the type of property you are buying and can go down to the
specific agreement you arrive at with the tenant. Be cautious
of the high-income returns promised by certain mediators
and/ or marketers of property.
- Can I rent a property long term?
If you wish to move to Cyprus before your property is completed,
we are happy to arrange long-term rental accommodation for
you. Just let our client-care team know when you wish to
come to Cyprus, what type of property you would like to
rent and we will provide you with a quote at special rates.
- Will peaceful co-existence continue
between Northern and Southern Cyprus?
Since the Republic of Cyprus has joined the EU on May 1st
2004, peaceful co-existence with the occupied “Northern
Cyprus” has gone a step forward. Turkish- Cypriots
are free to visit the southern part, Greek- Cypriots are
currently visiting the Northern part, and ever since this
measure came into being, no hostile act of any type has
been recorded. Turkey is a candidate for accession to the
EU and it is believed that this will ensure a fair political
settlement of the Cyprus Problem is reached, given the new
European dimension.
- Why buy in the South, when prices
are cheaper in Northern Cyprus?
In the southern part whereby the laws of the Republic and
the EU apply, the laws of supply and demand in a fully competitive
and free market determine property prices. In the occupied
northern part, a proper market does not exist and prices
are determined according to the legal ownership status of
a property. Secure title deeds in the north, are those with
a pre-1974 Turkish or British ownership. These are very
scarce and hence sell at a higher price than respective
comparable Greek owned property in the north. The authority
naming itself as the Turkish Republic of Northern Cyprus
(TRNC) is an illegal authority, (a pseudo state) only recognised
by Turkey. This authority issued its own title deeds for
Greek- owned property in the north and handed them to whoever
it deemed appropriate. These new “owners” engage
in selling these assets to third parties. However, the original
Greek owners are still holders of their original and fully-
legitimate title deeds, deeming those issued by the illegal
TRNC invalid. According to international law as well as
many rulings of the European Court of Human Rights the rightful
owners are the original Greek owners holding the title deeds
of the Republic of Cyprus (not the TRNC). Hence, holders
of the illegal TRNC title deeds sell property that they
do not legally own rendering all such transactions invalid.
The risk attached to this is immense for any third- party
buyer (even acting in “good faith”) and hence
prices for Greek- owned property in the north (which abound)
are much lower. So unless you want to take the full risk
of paying for a property in the north and then end up with
the freezing- up of your assets elsewhere in the world,
paying huge damages and losing the property after all, then
do not do it.
- Is there crime in Cyprus?
Cyprus is virtually crime free and that is why it is such
a popular destination for tourists. Ever since the southern
part is accessible to the north, there has been an increase
in the mobility of narcotics in the south. The Cyprus Police
and all relevant authorities of the Republic do everything
in their power to minimise this adverse effect.
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