Buying property in Cyprus. Five steps to buying property in Cyprus

By 2025, Cyprus will continue to be one of the most attractive destinations for real estate investment in the European Union. A developed legal system, favourable climate, moderate taxes and transparent registration procedures make the country appealing to foreign investors considering buying a home and obtaining a permanent residence permit. The process of purchasing real estate begins with selecting a property and paying a deposit, typically ranging from €5,000 to €10,000. It is then advisable for the buyer to hire an independent solicitor to conduct a legal check of the property, including an analysis of the title, debts and encumbrances, and permit documentation compliance. European Union citizens can purchase as many properties as they wish. Third-country nationals can purchase either one residential property or one residential property and one small commercial property, provided that the total area does not exceed the legal limits. Such transactions require the approval of the Council of Ministers or the district administration, which is usually granted within two to three months.

The first step in purchasing a property in Cyprus is for the buyer to sign a purchase agreement, after which the document is registered with the land registry. Payment can be made with own capital or via a mortgage. Cyprus banks provide mortgage financing to foreign investors who can provide an initial deposit of between 30% and 50% of the property’s value. Interest rates on mortgages range from 3.5% to 5.5% per annum, and loans can be taken out for up to 30 years.

Tax and administrative costs include VAT at 19% for new properties, with a reduced rate of 5% applying to primary residences. A stamp duty of 0.15% applies up to €170,000, and 0.20% is charged on the excess amount. When purchasing properties without VAT, transfer fees ranging from 3% to 8% apply, and legal fees amount to approximately 1–2% of the property value.

Investors planning to obtain permanent residence in Cyprus must invest a minimum of €300,000 in new housing, subject to VAT. In addition, you must confirm that you have a stable income from abroad that is sufficient to cover your family’s expenses.

The cost of real estate in Cyprus

The property market in Cyprus is developing steadily, and rental yields vary depending on the region. Property prices in Cyprus vary greatly depending on the region. In Limassol, for example, prices per square metre can reach €4,500 in central areas and around €3,400 in residential areas. In many other cities, such as Paphos, Larnaca and Nicosia, prices are 1.5–2 times lower.

The table below shows the average cost of real estate in Cyprus and the return on renting out property in different regions.

Investors should also consider key risks. Common mistakes include purchasing property in Cyprus without a separate title deed, completing the transaction through a solicitor provided by the developer and underestimating additional monthly property maintenance costs, which can amount to up to €500 per month. Another common mistake is failing to comply with the requirements for obtaining a purchase permit. To minimise these risks, it is recommended that you conduct a full legal review of the property, check the seller’s status and documents in the land registry, and assess the tax burden in advance.

Nevertheless, buying property in Cyprus remains an effective long-term investment tool for capital protection and generating additional income. In addition, if the established conditions are met, the investor has the opportunity to obtain permanent residence for themselves and their family members.

Regulated United Europe’s lawyers assist foreign clients at all stages, from property selection and legal due diligence to property registration and residence permit applications. We help optimise the transaction structure, assess the tax implications, and ensure full compliance with Cypriot law.

Five steps to buying property in Cyprus

Step one:

Once you have selected a property and your offer has been accepted, you must pay a reservation deposit to remove the property from the market. This must always be accompanied by a reservation agreement setting out the agreed terms and conditions.

Step two:

During the reservation period, you must collect all documents relating to the property and carry out a legal check on it. You will also need to complete anti-money laundering documents and your company’s registration documents (if the purchase is being made through a legal entity), so that certified transfers can be arranged in advance. Provided no problems arise during the legal checks, you can proceed to draw up a purchase agreement, which must be reviewed and approved by both parties.

Step three:

Once the draft has been finalised and approved, the purchase agreement will be stamped and submitted to the Land Registry along with a payment of approximately 20–30% of the purchase price. Please note that, in cases where an apartment or house in Cyprus is purchased in the name of a company, all company registration documents must be officially translated into Greek (if they have not already been translated into English) for the contract to be accepted and submitted to the Land Registry.

Step four:

At this stage, an application must be submitted to the Council of Ministers for approval to proceed with the purchase. This step only applies to citizens of non-EU countries. Approval is usually granted on condition that no more than two residential properties are purchased, and that these are used as private residences (either permanent or holiday homes). Approval does not apply to short-term or commercial rentals.

Step five:

The final step is to transfer the title deed into your name at the Land Registry, which is completed after the remaining purchase price has been paid. A fee is also charged for the transfer of ownership at this stage.

How can a foreigner safely buy property in Cyprus and obtain a residence permit?

Cyprus remains one of the most popular European destinations for foreign investors looking to purchase property. Its favourable climate, transparent legal system, low taxation and the possibility of obtaining a residence permit through property purchase make it particularly attractive to private individuals and international entrepreneurs.

On 8 June 2023, the Cypriot parliament passed a law introducing a reduced VAT rate of 5% for primary residences, subject to certain conditions. This change is intended to comply with European Union rules and follows a reasoned opinion from the European Commission indicating that Cyprus had incorrectly applied VAT rules to housing.

The main points of this law include:

1. The reduced VAT rate applies to the first 130 square metres of primary housing (houses or flats) costing up to €350,000. This reduces the area covered by the preferential rate from 200 m² to 130 m².
2. The law provides for a transition period. For four months from the date the law comes into force, the proposed rules will not apply to properties for which planning permission was obtained or an application was submitted before the law came into force.

These changes are in response to criticism from the European Commission, which highlighted Cyprus’s misapplication of EU VAT rules for housing, particularly with regard to applying a reduced rate of 5% to primary residences with no restrictions on area or cost.

The process of purchasing property in Cyprus is highly formalised and requires legal precision at every stage. Foreign citizens can purchase one residential property or plot of land of up to 4,014 square metres, while those from outside the EU must obtain permission from the Council of Ministers. This procedure can take several months, so it is recommended that it be initiated immediately after signing a preliminary contract for the purchase of a property in Cyprus.

The purchase process begins with selecting the property and paying a deposit, typically ranging from five to ten thousand euros. Next, the buyer appoints an independent solicitor to check the property’s title, confirming the absence of legal disputes, debts or encumbrances, and verifying the permits’ legality. The parties then conclude a purchase agreement, which is registered in the land registry within the timeframe specified by law.

The transaction can be financed with either own funds or a mortgage loan. Cypriot banks provide mortgages to foreign citizens on the condition that they make an initial deposit of between thirty and fifty per cent of the property’s value. Interest rates usually range from 3.5% to 5.5% per annum and loans can be taken out for up to twenty years. The bank requires proof of income, credit history, and an official valuation of the property.

The costs of buying a new flat in Cyprus (property value: €300,000)

STAMP DUTY ranges from 0.15% to 0.20%.

• The first €5,000 is tax-free.
•  From €5,001 to €170,000: 0.15%.
• Over €170,000: 0.2%.

Calculation: €5,000 x 0% + €170,000 x 0.15% + €125,000 x 0.2% = €508

• VAT: 19% (with the option of applying a reduced rate of 5%).
• €57,000 or €15,000.

Land registry fee: €50 for registering the contract.

The average brokerage commission for purchasing a new apartment in Cyprus is 5% + VAT.

The costs of purchasing a second-hand apartment in Cyprus (property value: €300,000)

STAMP DUTY: Stamp duty depends on the property’s value and ranges from 0.15% to 0.20%.

• The first €5,000 is not taxed.
• From €5,001 to €170,000: 0.15%.
• Over €170,000: 0.2%.

Calculation: (€5,000 x 0%) + (€170,000 x 0.15%) + (€125,000 x 0.2%) = €508.

Transfer fee (title transfer): payment to the land registry depending on the property’s value.

• First €85,000: 3%.
• From €85,001 to €170,000: 5%.
• Over €170,001: 8%.

Calculation: €85,000 x 3% + €85,000 x 5% + €130,000 x 8% = €17,200 x 0.5 (50% discount applies to all) = €8,600.

Completed properties are sold as seen. If you would like the property to undergo a professional appraisal, you can appoint an independent inspector to conduct a structural inspection before construction is completed.

Tax liabilities on purchase include stamp duty, registration fees and transfer fees. New properties are subject to 19% VAT, but a reduced rate of 5% applies to properties used as primary residences. For transactions without VAT, progressive transfer fees apply, ranging from 3% to 8% depending on the property’s value. You should also take into account additional costs for legal support, notary services, insurance and annual municipal fees.

The Cypriot property market is showing resilience and stable growth. Prices in coastal regions such as Limassol, Paphos and Larnaca continue to rise due to high rental demand and limited land availability. The average rental yield is between four and five per cent per annum, depending on the location and type of property.

How can a foreigner buy property in Cyprus and obtain a residence permit?

To obtain a residence permit, a foreign investor must invest at least €300,000 in new housing (including 19% VAT). They must also confirm an annual income from abroad of at least €50,000, with an additional €15,000 for a spouse and €10,000 for each child. A residence permit is granted based on the investment and extends to the applicant’s family members. The expected processing time is two to three months.

Foreign investors considering purchasing property in Cyprus can rest assured that the process is clearly regulated, with specific features relating to the rights of EU and non-EU citizens, taxation mechanisms, ownership structures, and regulatory compliance. One strategic option is to purchase property through a Cypriot company. In this case, the property is considered to be owned by the company — a local legal entity — and is not subject to the restrictions imposed on individuals from outside the EU. When selling such a company, its shares can be transferred, enabling you to avoid paying transfer fees. However, this solution requires compliance with corporate obligations, such as accounting, preparing audited financial statements, filing annual returns, and maintaining a minimum company presence (office, secretary and director).

The Cyprus property market remains stable. Investments are mainly concentrated in coastal areas and large cities, where demand from foreign buyers is strongest. Currently, the median price of a new apartment in Limassol is around €500,000 and the median price of a similar house is around €790,500. The average price per square metre is around €4,015. In the real estate market, coastal areas, large cities such as Limassol, and seaside properties are in high demand. The market is showing steady growth, particularly in coastal areas. Rental yields often range from 4% to 5%, depending on the region, the property’s condition and seasonality. Investing in property in Cyprus offers several advantages: capital protection, the opportunity to earn a stable rental income, and the chance to obtain permanent residency for yourself and your family.

However, there are several risks that investors should be aware of, such as concluding a transaction without an independent legal representative, purchasing without full title, conflicts of interest within structures, failing to comply with permit procedures and underestimating tax or operating costs. Investing in property in Cyprus not only provides the opportunity to earn a stable income and protect capital in an EU jurisdiction, but also represents a strategic step towards investment mobility. With the right approach and legal support, such a transaction can be transparent, safe and highly profitable.

Investing in Cyprus real estate: how to buy, rent and profit

The taxes and fees payable when buying depend on whether the property is new or on the secondary market. When buying a new property, 19% VAT applies, but under certain conditions this can be reduced to 5%. Concessions apply to the purchase of low-cost, small-area properties. For example, for properties up to 130 m² and costing up to €350,000, part of the property may be taxed at a reduced rate, with the remainder being taxed at the standard rate. When buying on the secondary market, transfer fees of between 3% and 8% are charged. Additionally, stamp duty of up to 0.2% of the transaction value is payable, as well as agent’s commission, notary and legal fees totalling 3–5%.

If a reduced VAT rate applies, the property cannot be rented out or sold for 10 years. If the property is sold or rented during this period, the VAT difference must be refunded to the tax department. Property maintenance costs include utilities (electricity, water and internet), municipal tax and complex infrastructure costs (security, cleaning and maintenance of the swimming pool, etc.). For a 90-square-metre flat, monthly expenses can reach €500. Renting is possible on both a long- and short-term basis (to tourists). Short-term rentals require registration with the Ministry of Tourism; otherwise, fines of up to €5,000 may be issued, and criminal liability may be incurred. Rental income is taxed at progressive rates: up to €19,500: 0%; from €19,501 to €28,000: 20%; from €28,001 to €36,300: 25%; from €36,301 to €60,000: 30%; over €60,001: 35%.

When selling real estate, capital gains tax is applied (20% of the difference between the purchase and sale prices, minus expenses). The seller is also required to pay a contribution to a special fund (approximately 0.4% of the transaction amount). The agent’s commission is up to 5%. On average, the sale process takes 3–5 months.

• A fee of 0.4% is charged in accordance with the Central Agency for Equal Burden Sharing Act.
• This fee is calculated on the full sale price, regardless of profit.
• It applies to all cases of disposal of immovable property located in Cyprus and is paid by the seller.
• Based on the provided scenarios:
• Sale at a price of €200,000 – tax: €800
• Sale at €250,000 – tax: €1,000.

In order to sell property in Cyprus, the seller must obtain a certificate confirming payment of the following taxes and amounts:

• Capital gains tax
• Transfer tax in favour of the Central Agency for the Equal Distribution of the Burden
• Municipal tax
• Sewerage charge
• Garbage collection fee
• Water charges
• Electricity bill

Buying property in Cyprus is an effective way to diversify your capital, generate passive income, and gain social status. With expert guidance, the transaction becomes transparent and secure.

Which is more profitable: buying property in Cyprus personally or through a Cypriot company?

One of the key choices when investing in Cyprus real estate is whether to purchase the property in your own name or through a company registered in Cyprus. This affects the tax burden, legal liability, ease of management and inheritance planning. If the property is registered in your name, rental income is taxed at progressive personal income tax rates ranging from 0% to 35%, depending on your total annual income. Additionally, residents and individuals domiciled in Cyprus must pay a ‘special defence contribution’ (SDC) of 3% on 75% of their gross income. Contributions to the health system (GESY) are mandatory at a rate of 2.65% of gross income.

When a property is registered through a Cypriot company, however, rental income is subject to corporate tax at a fixed rate of 12.5%. Companies do not pay GESY contributions on rental income. In some cases, income related to short-term rentals via online platforms may qualify as a business activity and be taxed as such, without the SDC being imposed.

Capital gains tax (CGT)

CGT is levied at a rate of 20% on the net profit from the sale. This is calculated as the difference between the sale price and the original purchase price, adjusted for allowable expenses (e.g. capital improvements and transfer fees) and indexation, where applicable.

When selling property registered to an individual, CGT (20%) is levied on the difference between the sale price and the purchase price, taking into account allowable expenses. In the case of corporate ownership, the company also pays this tax. However, companies do not have the same exemptions that apply to the sale of primary residences by individuals. Maintenance costs and savings through deductions also differ. For personal ownership, expenses such as repairs, insurance, management fees and part of the interest on loans are tax-deductible. Companies can take a wider range of deductions into account, including full financing through loans, depreciation, professional services, insurance and other administrative expenses.

In terms of liability, owning a property through a company provides significant protection — the legal entity acts separately, so any claims, debts and risks are limited to the company’s assets. With personal ownership, the owner bears full responsibility and is exposed to risks that may affect their personal property. The administrative burden of personal ownership is minimal; filing income tax returns and paying the corresponding taxes is sufficient. In contrast, a company is required to maintain accounting records, prepare audited reports and file corporate tax returns. The choice between personal ownership and a corporate structure depends on the investor’s goals, such as the size of the investment, plans for letting and inheritance, and personal preference regarding administrative complexity. For significant investment projects, ownership through a Cypriot company is often more tax-efficient and offers greater security in terms of liability and asset transfer.

Regulated United Europe‘s legal team provides advice and full support in choosing an ownership structure, analysing tax implications, structuring the transaction and registering ownership rights for your flat or house in Cyprus.