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.

Furthermore, 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.

The application to the Pertinent A uthority requires information about the personal details and financial standing of the applicant and particulars of the property and its present owner. Also it must be accompanied by a number of legal documents.

As of 1 May, 2004, citizens of the E.U residing in Cyprus or Cyprus based companies controlled by citizens ofa Member State are not considered to be foreigners. As for Citizens of the EU not residing in Cyprus, there is a transitional period until May, 2009, after which, they will be treated as equal to Cypriot citizens, regardless of their residential status.

2. SPECIFIC PERFORMANCE - SAFEGUARD FOR THE BUYER

Specific Performance Law safeguards a purchaser of immovable property from a transaction between a seller and a purchaser, especially when the purchaser is not allowed to immediately transfer the acquired property onto his/her name even though payment of the consideration has been effected.

According to the provisions of Specific Performance Law, the purchaser of immovable property may secure the transfer of the acquired property onto 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 in the Land Registry, the purchaser prevents the owner from transferring the property elsewhere or changing it, for as long as the contract is valid and legally effective. 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 onto the purchaser's name, even though the owner may not be willing to accommodate such procedures.

3. FEES, CHARGES AND PROPERTY TAXES

TRANSFER FEES

The transfer of immovable property into a purchaser's name can be effected once permission to acquire the property has been granted from the Council of Ministers/Pertinent Authority (where that is necessary - see point 3 above).When registering the property under his/her name at the District Land Office, the purchaser will be liable to pay the following transfer fees, calculated according to the property's market value at the time of signing of the contracts:

Market Value of Property (€)	Transfer Free Rate (%)
Up to €85,430.10	3.0
From €85,430.10 to €170,860.14	5.0
Over €170,860.14	8.0

STAMP DUTY

Unless otherwise stipulated in the contract, the purchaser is liable for the payment of stamp duty at the rate of 0.15% of the value of the property up to €170,860.14 and 0.20% for over €170,860.14.

The contract should be stamped within a period of thirty (30) days from signing. Although the absence of the revenue stamp on a contract does not render it void, the revenue stamp must be paid before depositing the contract to the Land Registry for specific Performance purposes (see point 4 above) The stamp duty plus a fine will be payable when the document is produced to the Land Office for the transfer of ownership of property, to any Government department or to the court. In order to avoid the payment of a fine, which could be substantial, the documents should be stamped within 30 days of their signing.

MORTGAGE FEES

The registration fee of a mortgage is one 1 per cent (1%) of the amount secured, plus the relevant stamps

IMMOVABLE PROPERTY TAX

The registered owner of a property is liable to an annual immoveable property tax calculated on the market value of the property as on 1st January, 1980.

Value of Property (€)	Annual Tax(%)
0 - 170,860.14	0
170,860.14 - 427,150.36	0.25
427,150.36 - 854,300.72	0.35
Over 854,300.72	0.40

IMMOVABLE PROPERTY (Rates, council tax) TAX

The registered owner of immovable property is also subject to minor taxation under other laws, such as municipal or village regulations.These taxes arecalculated according to the area and the size of the property and cover sewerage, refuse collection, street lights. The charges range in total from €80 to €170 per annum.

CAPITAL GAINS TAX

Capital Gains tax is levied at the rate of 20% on gains arising from the disposal of immovable property or the disposal of shares of companies the assets of which consist mainly on immovable property.

As a general rule, the gain is calculated as the difference between the sales proceeds and the original cost of the property. Interest on payments paid for the acquisition, additions to the property and inflation rate, as published yearly by the Government, are deducted form fees.

Capital gains tax as a whole has minimal effect, since the appreciation of values, coupled with the following allowances and inflation, tend to leave little excess.

Individuals are entitled to the following lifetime allowances on Capital Gains Tax:

• The first €17,086.00 of gains arising from the disposal of any property are exempted.
• The first €25,629.02 of gains arising from the disposal of agricultural land by the farmer are exempted (subject to certain conditions).
• The first €85,430.10 of gains arising from the disposal of a house used by the owner for his/her own habitation are exempted (subject to certain conditions).

The above allowances are not available separately and an individual claiming a combination of the above allowances is only allowed a maximum lifetime allowance of €85,430.10

Cyprus residents and companies registered in Cyprus are subject to Capital Gains Tax when disposing their property, wherever it is, in Cyprus or overseas. However, under certain conditions, Capital Gains Tax can be reduced significantly if the purchase of the immovable property is effected through a Cyprus registered company.

The following categories of immovable property disposals are exempted from the Capital Gains Tax:

1. Transfers by reason of death
2. Gifts between relatives up to third degree of kindred
3. Gifts to limited liability companies when, at the time of transfer and for a period of five years following the transfer, all the shareholders of the company are members of the family of the donor
4. Gifts by family companies to their members, but only in cases where the property transferred, was obtained by the company as a gift
5. Exchanges of immovable properties
6. Compulsory acquisitions
7. Gifts to charitable institutions
8. Gifts to charitable institutions or the Republic of Cyprus

ESTATE DUTY/INHERITANCE TAX

Estate duty was abolished as from 1/1/2000.

COMMUNAL EXPENSES

Communal expenses are usually payable monthly or quarterly, in advance, and vary from development to development depending on the area and type of the property. They cover an immovable property's owner share of the cost of cleaning and maintaining common areas and gardens, communal swimming pool expenses, electricity in common areas, management fees and repairs.

4. PERSONAL INCOME TAX

All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are only taxed on income accrued or derived from sources in Cyprus. An individual is a tax resident in Cyprus if he/she spends in Cyprus more than 185 days in any one year. Days in and out of Cyprus of Cyprus are calculated as follows:

(a) The day of departure from Cyprus counts as a day of residence out of Cyprus.
(b) The day of arrival in Cyprus counts as a day of residence in Cyprus.
(c) Arrival and departure from Cyprus in the same day counts as one day of residence in Cyprus.
(d) Departure and arrival in Cyprus in the same day counts as one day of residence outside Cyprus.

The following income tax applies to individuals:

Chargable Income (€)	Tax Rate (%)	Accumulated tax (€)
0 -19,500	0	0
19,500 - 28,000	20	1,699.80
28,000 - 36,300	25	2,074.75
Over 36,301	30	*

* €3,774.55 plus the incremental amount over €36,301 multiplied by 30%

Social insurance, provident fund, medical fund, pension fund contributions and life insurance premiums are deducted from income (only up to 1/6 of the chargeable income).

Pensioners

The pension for a person, who is resident in the Republic, paid for services which have been rendered abroad, is taxable at 5% on any amount exceeding €3,417.20 in a tax year.

The following income sources of pensioners are taxable at the normal tax rate:

• Interest Income
• Dividend Income
• Profits from the disposal of securities, shares, debentures, government bonds
• Profits from a permanent establishment which is maintained abroad
• The emoluments from salaried services performed abroad for an aggregate period in the tax year exceeding 90 days.

5. CORPORATION TAX

All companies tax resident of Cyprus are taxed on all their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus.

A company is resident of Cyprus if it is managed and controlled in Cyprus.

Corporate Tax Rates:

Type of Corporation	Tax Rates %
Semi-government organizations	25
Other companies	10

All expenses incurred wholly and exclusively in earning the income of the company are deducted.

6. DOUBLE TAXATION TREATIES

Cyprus has signed double taxation treaties with a considerably large number of countries and more are under negotiation. These treaties may affect favorably the ownership of immovable property in Cyprus and also groups of people who decide to relocate to Cyprus, such as retired residents, employees and business investors

Some of the countries with which Cyprus has entered into double taxation treaties are UK, Ireland, Greece, USA, Canada, France, Italy, Russia, Belarus, Romania, China, Austria, Belgium, South Africa, Yugoslavia and many others.