Euros to Pounds : Cyprus
OK, now we understand some of the issues we need
to consider when
exchanging our euros to pounds, now lets take a look at one or two of
the new overseas hotspots which may be slightly less familiar than
Spain, France or Italy. Let's start with Cyprus, one of the newest
members who joined the Euro currency zone on the 1st of January 2008
along with Malta.
Cyprus is the third largest island in the Mediterranean and attracts over 2.4 million tourist per year with its wonderful year round climate, which is perfect for sailing and boating. If you are looking for a marina, there are several new ones planned - just have a look at the following site which has details of new marinas around the world, including Cyprus. Its historic ties with the United Kingdom make it a strong favourite among British holidaymakers.
Euros to Pounds : Buying on Cyprus
Buying
a property in Cyprus is very similar to the process in the UK, and
includes a Land Registry office. Once you
have found your property you put in an offer, which is then either
accepted or rejected by the seller. If the offer is accepted you then
place a small deposit with the agent to secure the property. This is
normally around 1500 to 3000 euros and forms a legally binding contract
between the buyer and seller, so please think carefully beforehand.
This effectively seals the buying price and the property will be removed
from the market, avoiding any gazumping, or changes in mind by the
seller. Remember you now have a legal commitment to buy so don't take
this step without being absolutely sure this is the property you want to
buy! I would suggest that buying when you are there on holiday is
probably not the best time - go home think it over before travelling
back, and perhaps seeing the resort out of season to give you an idea of
what facilities are like when the tourists have gone home.
Euros to Pounds : The Buying Process
Below are some of the main points with regard to buying a property that you will need to consider, along with tax issues that may be relevant.
- As a non-Cypriot you are only entitled to own one property in Cyprus. This can be a villa or a condominium or a piece of land for development, as long as it is a maximum of 4000 sq metres.
- You can own the asset freehold
- Once a price is agreed you pay a small deposit to secure the property - between 1500 and 3000 euros. This secures the property at the agreed price, but it is a legally binding contract.
- Contracts are then drawn up which normally only take a few days.
- On signing of the contracts a deposit of 20% - 30% is paid, with the remainder due as per the terms of the contract.
- Once the contracts have been signed they must be deposited with the Land Registry office within two months, as this prevents the seller trying to resell the property to anyone else in the meantime, and also offers protection before the property is assigned via the Council of Ministers ( see below )
- You will need to apply to the Council of Ministers for approval as a non Cypriot, for the transfer of the property to you, to be approved. This is a rubber stamp exercise and can take up to 6 months. During this application the Council will check that the details are correct, that any land is within the prescribed minimum allowed, that you are a reputable person with sufficient funds to live in Cyprus, and that you do not own multiple homes. During this process you are still the legal owner and can live in the property until the application has been approved. The whole process can take several months to complete.
- In the event that your application to the Council fails, you can re-apply. If this fails then you have 30 years plus in order to sell as the legal owner and you can of course continue living in the property until it is sold.
Euros to Pounds : Taxes & The Legal System
- The legal system in Cyprus is based on the British legal system. The land Registry in Cyprus is also based on the British system and it is one of the most advanced and reliable in the world. This makes purchasing property in Cyprus very secure. Contracts and paper work relating to a property transaction are generally in English.
- A property transfer fee is due, when a property is transferred from one owner to another. This is applied at the following rates :
- Up to 85,000 euros - 3%
- 85,000 euros to 170,000 euros - 5%
- Over 170,000 euros - 8%
- It is possible to reduce the above transfer tax by registering a property in joint names. For a 100,000 Euro property, the tax would be calculated as 3% of 50,000 euros each, i.e. a total of 3,000 euros, rather than 5% of 100,000 euros under the single registration scheme.
- Stamp duty is charged at the following rates :
- 2.50 euros per 1700 euros, up to a value of 170,000 euros
- 3.50 euros per 1700 euros thereafter
- The stamp duty is due within 30 days of signing the contracts
- Local authority taxes will vary but a rough guide would be 300 to 400 euros per year.
- There is an odd tax, called the 'Immovable Property Tax' which is based on the market value of the property as of 1st January 1980. Up to 170,000 euros, the property is exempt. The following rates then apply :
- 170,000 to 400,000 euros - 2%
- 400,000 to 850,000 euros - 3%
- Over 850,000 euros - 3.5%
Euros to Pounds : Tax Advantages of Cyprus
- There is no inheritance tax in Cyprus
- CGT is only 20%
- Corporation tax for business is only 10%
- For people retiring to Cyprus there is an effective nominal tax rate of 5%
- Cyprus has a double taxation treaty with most European countries
Euros to Pounds : General Information
- The official language is Greek, but English is spoken by 80%, having once been a British colony
- Driving is on the left
- It is the sunniest island in the Mediterranean with 340 days of sunshine per year
- The cost of living is very cheap compared with other EU countries
- All road signs are in English
- Private medical insurance is available for around 350 euros per year
- Crime rate is very low
- Virtually the only place in Europe where you can ski in the morning and swim in the sea in the afternoon!
Personally I think Cyprus would be a great choice for a second home, or for retirement as it seems to offer everything. If you would like further details please have a look at the Cyprus Tourist Board official site. Now let's have a look at another of the new countries to recently adopt the Euro, Malta, and see what our euros to pounds can buy here.