CYPRUS Law and Practice Contributed by: Alexis Erotocritou, Dafni Loizou and Georgia Demou, A.G. Erotocritou LLC
2.5 Transfer of Property As mentioned in 1.2 Exemptions , Cyprus has no inher - itance, estate or gift tax, therefore transfers between relatives up to the third decree do not usually trigger a tax event and generally do not reset the cost basis. Transfers between non-relatives may be subject to tax depending on the nature of the asset to be trans - ferred, taking into account the market value of the asset rather than cost of the property. In Cyprus, transfer fees on immovable property are payable to the Department of Lands and Surveys and are generally calculated on the sale price or the mar - ket value of the property, as determined by the Direc - tor of the Department of Lands and Surveys, where applicable. In the case of a gift, transfers between parents and children are exempt from transfer fees when calculat - ed on 1 January 2013 values. Gifts between spouses and between relatives up to the third degree of kinship (other than parent-to-child transfers) are subject to nominal transfer fees based on 1 January 2013 val - ues. In certain cases involving property located in the occupied areas of Cyprus, registration may be com - pleted without fees until a political settlement. The 1 January 2013 values refer to the general valua - tion carried out by the Department of Lands and Sur - veys as at 1 January 2013, which is used for statutory and tax purposes, is not representative of market val - ue, and is available online through the official Depart - ment of Lands and Surveys portal. In the case of a sale, transfer fees are generally cal - culated on a progressive scale (3% up to EUR85,000, 5% from EUR85,001 to EUR170,000, and 8% above EUR170,000), based on the sale price or market value, whichever is higher, subject to a 50% reduction in most cases. No transfer fees are payable where VAT is charged on the same transaction. The Director of the Department of Lands and Surveys may reassess the declared value if it is not considered to reflect market value.
before cohabitation with the intention of marriage can - not be the subject matter of an asset division dispute between spouses. As a general rule, each spouse generally retains ownership and control of property held in their own name, including property acquired before or during the marriage. The Cypriot matrimonial property regime is based on the principle of separate property ownership. Never - theless, where a marriage is dissolved, or the spous - es separate, the division of assets will be generally resolved by establishing whether one of the spouses has made a greater contribution to the increase of the property acquired during the marriage. There - fore, a spouse who has contributed to the increase in the property of the other spouse is entitled to claim a share of that increase corresponding to their con - tribution. The law establishes a rebuttable presump - tion that such contribution is equal to one-third of the increase, unless the evidence demonstrates a greater or lesser contribution. Given that Cyprus is not a community-property juris - diction, each spouse can generally deal with property registered in their own name. However, in the case of separation or where one spouse seeks to dispose of or deal with an asset in order to defeat or hinder the execution of a property claim by the other spouse, the court may intervene, usually through the issuance of an appropriate order to protect the asset(s) until the case is tried. Moreover, upon separation, or upon the institution of divorce proceedings, the Family Court may, on the application of either spouse, grant one spouse the exclusive right to occupy the family home, irrespective of which spouse actually owns the property or other - wise holds the legal right to occupy it. In exercising this discretion, the Court must consider the require - ments of equity, the particular circumstances of each spouse, and the best interests of any children. Prenuptial agreements are generally treated as non- binding in Cyprus, although post-separation agree - ments settling property issues may be enforceable as ordinary contracts if they meet the usual requirements of valid consent, certainty and absence of fraud, duress or illegality.
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