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Cyprus Mortgage Information

The Buying Process

 

In Cyprus the purchase of a property by a non-cypriot requires the approval of the council of ministers under the immovable property acquisition law.

 

The approval is in most cases a formality provided the buyer(s) can prove the financial means to support themselves in cyprus and do not have a criminal record in either their country of origin or cyprus. Non-cypriots are restricted to buying one apartment, house or building plot not to exceed 4013m2.

 

Permission for larger property must be sought from the council of ministers - this may be considered favourably in the case of an area where the government wishes to promote tourism for instance.

An initial contract of sale is drawn up confirming the name and address of seller & purchaser and property details including the agreed sale price. Transfer of ownership will be registered at the land registry as soon as the title deed is issued by the relevant government authority and the account has been settled.

Finance

Mortgages can be granted in a range of currencies including CYP£, US Dollars and Euros. All mortgages are full status and proof of income and outgoings will be required. Cypriot mortgages can be arranged for acquisition & construction purposes. A deposit of 30% of the purchase price is generally required and you will also be liable for solicitor's fees. Cypriot mortgages are repayment loans (unless construction, when interest only is available during stage payment release) and the maximum term available is 15 years. All mortgages should be fully repaid by the age of 65 and life cover is required by the lenders.

Cypriot lenders assess eligibility for a mortgage on the applicant's ability to service the loan and not potential rental income from the property. The general guideline is as a maximum of 40% of net available income. If you are self-employed income is assessed as the average of the last three years' net income. A percentage of rental & investment income may also be considered.

 

Fees

Most lenders charge a minimum of 1% arrangement fee, but this can be up to 1.5% if finance is required in a currency other than CYP£.

A transfer fee is payable at completion between 3% - 8% depending on property value.

 

Annual Tax is payable between 0% - 3.5% per £1,000 CYP depending on property value.

 

Stamp Duty is payable at c1.50 per £1,000 up to £100,000 property value or c£2 per £1,000 if property value exceeds £100,000.