Buying property in Cyprus was a popular investment before it joined the European Union (EU). Since then, the government has lifted bits of legislation that may have discouraged ownership and now as many as 60,000 British nationals own property on the island.

Buying a home in Cyprus is especially tempting for retirees looking to spend their twilight years in a sun-soaked climate among friendly people, good food and a slower pace of life.

There are, however, pitfalls that expats should be aware of if they want to ensure that their dream home doesn’t become a nightmare played out in courtrooms and endless piles of legal papers.

With the economy in Cyprus unlikely to significantly improve, at least for several years, expats should also evaluate their reasons for buying real estate in Cyprus. There are no guarantees in the property market, and profit should probably not be the primary motivation for buying property on the island.

Where to buy property in Cyprus

Ever since Turkish troops invaded the north of Cyprus in 1974, the country has been governed by two administrations, with only the primarily Greek Cypriot south recognised as having a legitimate government. The violence has passed but tensions remain – even in the real estate market.

Potential homeowners in Cyprus should be aware that many properties in the north of Cyprus belonged to Greek Cypriots who were forced to flee as a result of the division. Since then, many title deeds have been falsified and, as a result, documentation can’t always be trusted at face value.

Expats buying property in northern Cyprus run the risk of facing counter-claims to the property from Greek Cypriots and possibly court action, especially if the island ever reunifies. Extra precautions should therefore be taken to ensure that all documents relating to the sale are legitimate – especially in the north.

That aside, both north and south boast beautiful properties with the potential to make any expat a happy homeowner.

The purchasing process in Cyprus

EU nationals can purchase real estate in Cyprus without any restrictions, while non-EU nationals are allowed to buy up to around one acre (4,000m²) of land or one house or apartment. 

Getting permission

Expats buying property in Cyprus must apply with the Council of Ministers for permission to purchase a home. Though approval is most often given, the process for obtaining it can prove tedious and time-consuming.

Applications require:

  • The submission of property details

  • Information about the current owner and contract

  • The buyer’s personal history, current residence and means of income

  • It is highly recommended that expats employ a lawyer who is experienced in navigating the complex channels of permission, paperwork and tracking down the property’s title deed.

Real estate contracts in Cyprus

Expats who have honed in on their future home should make an offer to the current owner. After negotiations, a formal contract of sale should be drawn up in writing and translated into all the languages necessary. It should then be deposited with the relevant District Lands Office within two months of being signed by both parties.

The purchaser also normally puts down a deposit of roughly 10 percent of the sale price.

The title deed can only legally be transferred, however, once the government has given the appropriate permissions and the imported funds have been certified. The estate agent or lawyer will then register the property in the name of its new owner.

Property taxes  and transfer fees in Cyprus

Expats will have to pay property tax in Cyprus, and will be responsible for transfer fees, stamp duties and legal levies. Expats should also allow for at least 15 percent over and above the buying price to cover registration costs and legal fees, while the seller usually covers estate agent costs. 

Transfer fee rates are determined as a percentage of the property's value.

Stamp duty

Stamp duty is paid on signed legal documents concerning assets in Cyprus, and also varies according to the property’s market value.

What to consider before buying property in Cyprus

The most common complaints in Cyprus real estate arguably relate to title deeds and mortgages. 

A reliable solicitor who is proficient in English and is, crucially, independent of all the other parties involved in the transaction, is probably the most important consideration for buying property in Cyprus. A good lawyer makes all of these potential pitfalls easier to navigate.

To put the potential seriousness of the title deed situation in northern Cyprus in perspective, buying, selling, renting or mortgaging a property without the permission of the owner is against the law. In the case of land claims relating to the occupation, the displaced person is recognised as being the legitimate owner.

Furthermore, if a property developer in Cyprus takes out a mortgage in order to complete construction and hasn’t paid it off before the purchase has gone through, the new owner becomes liable for settling it. The Cyprus government has made moves to protect buyers in this situation, but expats are still advised to be extremely cautious.

Ground rules for buying property in Cyprus

  • Get a lawyer

  • Ensure that the property isn't the subject of an ownership dispute

  • Have a broker or another authority source conduct a full examination of the property

  • Make an inventory of any necessary repairs or damages

  • Check access to utilities and services, especially when planning on future renovations

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