Essque Residences Cyprus Property Buyers Guide 2013

Cyprus

in your heart

Purchasers Guide Nothing else 2013 matters

Discover the value of Cyprus

Located in the Eastern Mediterranean, the sun-kissed island of Cyprus has, for centuries, welcomed travellers from the world over.

Cyprus - the fast facts With any investment, the first thing to do is “your homework”. Our team are here to provide answers to your questions to assist you in making an informed decision.

Welcome!

Dealing with the “haircut”

Fast Facts

It’s our great pleasure to showcase the island of Cyprus. The favourable location of Cyprus at the crossroads of Europe, Asia, the Middle East and Africa, together with the fact that Cyprus is a full member of the E.U. as of May 1st, 2004 make Cyprus an excellent investment opportunity.

The first thing that most investors ask is “What happened with the haircut?”. So lets get this important question out of the way first. In simple terms, Cypriot banks were primarily over-exposed to the Greek Debt crisis. This, coupled with offering extensive credit to local property developers left the banks short of liquidity when loans were not repaid.

Official Name: Republic of Cyprus Area: 9 250 km Population: 117 700 000 Highest Point: 1 951 m Capital: Nicosia/Lefkosia Languages: English/Greek Member of: UN / EU/ Commonwealth Dialing Code: 00357

Its safe and protective legal system, the excellent infrastructure the high standard of legal, banking and accounting services provided, the continuing development of the island, the extensive use of the English language, the excellent climate and the hospitality and friendliness of the locals, are some of the reasons that established Cyprus as an ideal centre for both business and pleasure and thus attracted to the island a considerable number of individuals and foreign investors interested in immovable property.

While the island has certainly faced its challenges recently, our buyers guide is a tool to allow you to make an informed decision regarding property investment in Cyprus.

So fall in love with Cyprus, we did.

Marco-David Soares Managing Director

This time the European Central Bank was not so quick to pull out its cheque book to provide emergency liquidity. This time it came at a price. Tiring of bailing out errant banks, the EU placed a number of conditions on a bailout, the most prominent being a requirement that depositors in the affected banks shoulder some of the burden. It has since come to light that Cyprus was somewhat of a test case scenario for future bank bailouts within the EU. Depositors with over EUR 100 000.00 in accounts with Bank of Cyprus & Laiki Bank found themselves contributing to the bank bailout.

Should this affect your decision to purchase property in Cyprus? The answer is no, investors who had purchased property instead of leaving their funds in the bank were not affected, proving once again that, in times of trouble, property is a good investment.

Who can Purchase Property in Cyprus?

Cypriots & E.U. citizens living in Cyprus Under Cyprus Law, Cypriots or persons of Cypriot origin, as well as E.U. citizens who have their permanent residence in Cyprus, are allowed to acquire any property without any restrictions.

The residential status is ascertained by the District Offices and is obtained when a person resides in Cyprus for a total period of 185 days per year or more.

Foreigners & other E. U. citizens Foreigners and E.U. citizens who are not permanent residents of Cyprus, wishing to purchase immovable property in Cyprus are obliged to adhere to special formalities and are restricted by certain regulations.

Firstly, a restriction as to the type and size of the property is applied and they are given permission to buy only one apartment or one house or a building plot or land, which in the case of E.U. citizens can be unlimited and in the case of all other foreigners up to 4,014 square metres .

In the case of persons who are living or working in Cyprus for a long period of time a permit to buy a second house may be granted.

After the permission has been obtained and the property registered in the name of the purchaser, there are no other restrictions for the foreigner who is the owner of immovable property in Cyprus and he or she may sell or dispose of the property as they wish.

The foreigner owner of immovable property can sell it and buy another, as any bona fide repeat purchaser will be granted a subsequent permit.

Furthermore, the legal heir/s of the said owner is not required to obtain a permit from the Council of Ministers in order to transfer the property on to their name.

The restriction applied for E.U. citizens not residing in Cyprus ceased after May, 2009, and all citizens of the E.U. are treated equally with Cypriot citizens regardless of their residential status.

According to Cyprus Law, foreigners must obtain the permission of the Council of Ministers prior to the acquisition of real estate property. Recently these powers have been assigned to the Pertinent Authorities of every district, in order for the procedure to become speedier.

A foreigner - the law uses the term alien - is any person who is not a citizen of the Republic, including an alien controlled company. The term does not include foreigners of Cypriot origin, or the non-Cypriot spouses of citizens of the republic.

Acquisition of real estate property includes - Transfer of title deed.

- Long lease for periods of more than 33 years.

- The acquisition of shares in a company that owns immovable property, if such an acquisition results in the company becoming controlled by foreigners.

- The establishment of a trust or any type of set-up, which is connected with the ownership of real estate, for the benefit of a foreigner, including tax benefits.

Although the proceedings for the obtaining of the permission might need a considerable amount of time to be fulfilled, purchasers are entitled to occupy their properties until then.

Also, any contract for the purchase or lease of property is valid even if the Pertinent Authority rejects the foreigner’s request for permit. As such, when purchasing a property, it is advisable for the relevant contract to include provisions for such an event so as to secure a refund of any money paid or any other remedy.

As a general rule permission is granted to bona fide applicants provided they have

The Purchasing Procedure & our services to you

- No criminal record in their country or in Cyprus.

- The financial means to support themselves in Cyprus. ( An income of €30,000 per annum between the couple is considered satisfactory).

- As of 1st May, 2004, citizens of the EU residing in Cyprus or Cyprus based companies, controlled by citizens of a Member State are not considered to be foreigners. As for citizens of the EU not residing in Cyprus, there was a transitional period until May, 2009, after which they were treated equally with Cypriot citizens regardless of their residential status.

1.

Search on the title deeds of the property and

obtaining certificates of registration and site plans; 2.

Obtaining and checking the building and

planning permits and any final certificates.

3.

Carrying out background financial and

stability checks on the sellers.

4.

Drafting a reservation agreement to regulate

the terms on which the property is paid.

5.

Perusal of the proposed sale agreement and

modifying the same, if necessary, to fully cover

your interests or drafting our own contract; 6.

Drafting power of attorney, if necessary,

enabling us to act for you in your absence.

7.

Attending signing of sale agreement; 8.

Stamping and depositing sale agreement with

the Land Registry for specific performance purposes.

9.

Preparing and submitting on client’s behalf

application for a licence to acquire immovable

property in Cyprus where necessary; 10.

Attending Land Registry and accepting

transfer and registration of the property in

client’s name and issuing title deeds.

The Contract & transfer of ownership According to the provisions of Specific Performance Law, the purchaser of immovable property may secure the transfer of the acquired property on to his/ her name by depositing a duly signed and stamped copy of the contract at the Land Registry within two (2) months from the signing of the contract.

By depositing the contract to the Land Registry, the purchaser prevents the owner from transferring the property elsewhere or charging it for as long as the contract is valid and legally effective. Note that no burdens, charges or encumbrances can affect the right of specific performance after the contract has been deposited with the Land Registry.

Depositing a copy of the contract to the land Registry gives the purchaser the right to seek “specific performance” of the terms and conditions of the contract and thus to register the property on to his/her name, even though the owner may not be willing to accommodate such procedures.

So you’ve found the perfect property?

The information above will provide you with facts that you need to know to purchase a property in Cyprus and will explain the purchase procedure that takes place . Now, you will need to have an understanding of the costs involved.

Villa Bahari - 4 bedroom sea front villa

The Costs of Purchasing a property in Cyprus

As with any property purchase, there are a number of additional costs over-and-above the purchase price: 1.

2.

Stamp Duty Property Value from € 0 - € 5000: 0.0 % Property Value from € 5 000 to € 170 000: 1.5 % Property Value - balance: 2.0 % Transfer Fees 3% on the €0 - € 85 000 value of the property 5% on the € 85 000 to € 170 000 value of the property 8% on any amount above € 170 000 value of the property

If there are two purchasers buying one property, they will pay less in transfer fees as the value of the property is divided by two, calculated seperately, then added together.

The Costs of running a property in Cyprus

The cost of living and property running costs in Cyprus are relatively low: 1.

2.

3.

Immovable Property Tax This is an annual tax that is calculated on the property value.

Property Value Tax Rate Property Value Up to € 12 500 € 75 € 300 001 to € 500 000 € 12 500 to € 40 000 0.6 % € 500 001 to € 800 000 € 40 001 to € 120 000 0.8 % € 800 001 to € 3 000 000 € 120 001 to € 170 000 0.9 % over € 3 000 001 € 170 001 to € 300 000 1.10 %

Tax Rate 1.30 % 1.50 % 1, 70 % 1.90 %

Local Authority Tax This is similar to Council Tax and is usually around EUR 50 - EUR 200.00 per annum Communal Expenses A service charge is often payable if your property is in a complex. The charge is dependent upon the size of your property an can vary between EUR 350 - EUR 1 500 every 6 months depending upon the level of services included.

The cost of living in Cyprus

Taxation in Cyprus

Taxation in Cyprus - continued:

Living in Cyprus - the right to residence - continue:

Now you have purchased your dream property, you will want to get an idea of the cost of living in Cyprus?

An individual is a tax resident in Cyprus if he spends more than 183 days in Cyprus in any one calendar year.

Days in and out of Cyprus are calculated as follows:

Capital Gains Tax Capital Gains Tax is paid on gains arising from the sale of immovable property. Tax due is 20% on gains realized, which is calculated as follows:

Non-EU Nationals Full details are available on our website at: www.westcoastcyprus.com, but here is a summary of the requirements:

Water This naturally depends upon how much you use of course. Topping up the swimming pool in the summer months can naturally increase the charges as well! An average 3 bedroom house should be using around EUR 100 - EUR 150 per month Television / Internet / Telephone A package from CYTA including satellite television, telephone line rental and unlimited internet will cost around EUR 80.00 per month. An installation charge applies.

Electricity Electricity is billed bi-monthly and, once again, varies extensively according to usage. Pricing is on a sliding scale. Budget for higher bills in the summer due to air-conditioning and in the winter for heating. An average 3 bedroom house should be costing around EUR 150.00 - EUR 200.00 per month.

Swimming Pool An outside pool cleaning company will charge around EUR 85.00 - EUR 100.00 per month to maintain your swimming pool, including chemicals.

Housekeeping If cleaning is not your thing, expect to pay between EUR 5 .00 - 7.00 per hour for cleaning and ironing.

- the day of departure counts as a day of residence outside Cyprus - the day of arrival counts as a day of residence in Cyprus - arrival and departure from Cyprus on the same day counts as one day of residence in Cyprus - departure and arrival in Cyprus on the same day counts as one day of residence outside Cyprus The following income tax rates apply to individuals: Taxable Income (EUR) 0 - 19 500 19 501 - 28 000 28 001 - 36 300 Over 36 000

Normal Tax Rate (%) 0 20 25 30

Proceeds from the sale less cost of the property, professional and legal fees, commission, interest paid, inflation allowance and investment allowance (EUR 17 086 on disposal of any property and EUR 85 430 on disposal of residence provided that this has been used as the main residence for at least 5 years prior to the sale).

The investment allowance is only granted once, unless it has not been exhausted at the first sale, in which case any balance would be carried forward.

The investment allowance is granted to each owner of the property. For example, if a husband and wife own the property, the total investment allowance is EUR 34 172.00.

Foreign pensions are taxed at the rate of 5%. An annual exemption of EUR 3 420.00 is granted. Pensions received from abroad by a resident in respect of services rendered outside Cyprus are taxed at a flat rate of 5% after deduction of the first EUR 3 417.00 if the individual elects to do so.

Living in Cyprus - the right to residence

In the case of an individual taking up employment in the Republic, who was non-resident prior to his employment, an allowance of 20% of his remuneration to a maximum of EUR 8 543.00 is given for a period of 3 years. Salaried services rendered abroad for more than 90 days to a non-resident employer or at a permanent establishment abroad of a resident employer are exempt of income tax.

EU Nationals EU Nationals have access to Cyprus thorugh the European Freedom of Movement of Persons treaties.

Provided they have adequate funds to support themselves and medical cover, EU Nationals are free to reside in Cyprus.

For many people, Cyprus provides the opportunity of starting a new life and, with its fair right to residency through property ownership, provides a valuable foothold in the European Union.

Non-EU nationals of good character have the right to apply for a residency visa if they purchase property costing at least €300,000 excluding VAT and/or Property Transfer Fees. Note that on 12th December 2012, the Interior Ministry announced that third-country nationals (non-EU nationals) could acquire two residential units or a house and another building.

Of that €300,000 the non-EU national must show that he has already paid €200,000 towards the cost of the property when they make their application, and that it has to come from abroad. The balance of the purchase price can come from local funds or funds from abroad.

In addition, the visa applicant has to show that his income is not less than €30,000/annum – plus a further €5,000/annum for each of his dependents. He must also deposit at least €30,000 in a Cypriot bank for a minimum of 3 years and although he may withdraw any interest earned on the money, the account balance must not fall below €30,000.

The residency visa (if granted) includes the applicant’s dependents, such as his wife and children under 18 years of age. Children over the age of 18 have to apply for a separate visa and must comply with all the requirements (although their application will be examined bearing in mind the family circumstances).

Travelling within the EU Non-EU nationals holding a Cyprus residency visa who wish to visit EU countries in the Schengen area for a short stay of up to 90 days per six months, need to apply for a short-stay Schengen Visa (tourist or business). If granted, this visa does not entitle its holder to permanent residence in the country being visited, whether for study, employment or settlement. Non-EU nationals holding a Cyprus residency visa who wish to visit EU countries outside the Schengen area, need to apply for a visa at the embassy of the country they wish to visit.

Acquiring Cypriot Citizenship Cyprus has introduced a “Citizenship by Investment Programme allowing a non-Cypriot citizen to acquire Cypriot Citizenship if the following criteria are met: The applicant must have direct investments in Cyprus amounting 5 million Euros and above. Direct investment includes the following: a) Purchase of immovable property (houses, offices, shops, hotels etc or similar nature deploy ments, excluding undeveloped land), b) Acquisition of companies or firms that are based and operating in Cyprus, c) The purchase of shares of companies registered in Cyprus, d) Purchase of financial assets (e.g. bonds / securi ties /securities issued and registered in the Republic including those to be issued from the Fund under establishment of the National Solidari ty Fund Act of 2013) e) Participation in a company / consortium in charge of the execution of a public project.

In relation to conditions a)-d) the applicant must have in his possession the related investments for a period of at least 3 years. In case of a portfolio of shares or bonds it has to be guaranteed that the value of the portfolio for the 3 year period will not drop below the specified amount.

The applicant must have a clean criminal record.

Also, his name should not be included in the list of persons who have a freezing order on their property within the boundaries of the European Union.

In all cases listed in Part A, the applicant must be holder ownership of property in Cyprus, market value at least 500.000 Euros plus VAT.

About West Coast Properties Citizenship through Naturalization For those without a spare EUR 5 million lying around, citizenship can still be attained through naturalization. Once you have purchased a property under the right to residence scheme listed above and have been resident in Cyprus for 7 years, an individual can obtain Cypriot citizenship, which allows the same rights as any other European citizen , such as freedom of movement, freedom of employment, etc. in any EU Member State.

West Coast property Sales & Rentals are a Fully Licensed & Registered Real Estate Agent located on the west coast of Cyprus in Paphos.

Having worked in the real estate industry here in Cyprus for over 12 years we as a company have become passionate about delivering great value for money and sound property investments. We have sought out some of the best value resale property on the market, ensuring that not only are all our properties sound investments but they have full Title Deeds are cater for everybody’s individual tastes and requirements.

West Coast now has an ever expanding marketing campaign in Ruissia, Scandanavia and the UK as well as the local property market here in Cyprus and offers some of the best marketing avenues for your home.

For impartial advice, contact West Coast today.

The company now not only has a flourishing Property Sales business but also has a rapidly expanding Property Rentals department, catering for both long term rentals and holiday rentals in Paphos and the surrounding areas.

As a licensed estate agent you can be relaxed in the knowledge that all our properties carry minimal commissions as provided for by law and that your property investments are fully protected by the Real Estate Association indemnity policies. Unlike many companies operating on the island, your protection and investment is our priority.

If you wish to find your holiday home in the sun or indeed are looking to permenantly relocate to the Cyprus sunshine then West Coast deliver a highly experienced and professional team eager to meet your wants & desires for your investments.

Disclaimer All information contained herein was correct at date of publication - June 2013. West Coast Properties will not be held responsible for any inaccuracies contained herein.

40 Sea Front, Ocean View and Spice Garden Hotel Suites

Contact Number : +357 96 76 33 88 Email: res@essqueresidences.com www.essqueresidences.com Third Floor, 207 Regent Street London, W1B 3HH, United Kingdom