As lawyers working in Cyprus, we’re often asked by clients (both local and foreign investors) how and when they should transfer property to their children.
It is not an easy decision and it is rarely just about the numbers. A mix of legal, financial and emotional considerations comes into play. Here, we discuss the reasons why you might want to transfer property during your lifetime, the Cypriot laws governing such transfers, and potential pitfalls.
Why transfer property now, not later?
One of the most common reasons why people transfer property to their children while they are still alive is peace of mind. Doing it early removes a lot of uncertainty. It ensures that your wishes are clear and carried out and reduces the likelihood of disagreements or legal battles later on among the heirs. It also helps your loved ones avoid the time-consuming probate process for the issuance of a probate order for a deceased person’s estate, which can drag on in Cyprus.
From a tax perspective, Cyprus is quite generous. There’s no inheritance tax and no gift tax. If you are transferring immovable property to your children as a gift, you also will not pay capital gains tax (hereinafter referred to as “CGT”) or transfer fees (assuming everything is done correctly).
Taking control of your Estate Planning
Cyprus has a forced heirship regime that limits how much of your estate you can transfer to whomever you choose, especially if a person dies “domiciled” in Cyprus. Up to 75% of your estate may legally have to go to your legitimate heirs. However, gifts made during your lifetime generally aren’t affected by these rules. If you want more control over who gets what, a lifetime transfer might be your best option.
How it works
If you decide to transfer property to your child, the process is relatively simple. Both you and your child must attend the District Lands Office to sign the necessary transfer documents or appoint an Attorney to appear and act on your behalf using a Power of Attorney. Even after the property has been transferred to your child, you may choose to retain certain rights. For example, many parents opt to reserve the right of habitation (the right to live in the property) and the right of usufruct (the right to benefit financially from the property, such as by collecting rent from a tenant). To retain these rights, your intention must be clearly stated in the transfer documents submitted to the District Lands Office.
Special considerations for foreigners
If you’re not originally from Cyprus, there’s an added layer of flexibility. Thanks to EU Succession Regulation 650/2012, EU citizens living in Cyprus can choose the law of their home country to apply to their estate. This can be done through a will and it can help sidestep the forced heirship rules. This is a big plus for international families who want to tailor their estate plans more closely to their personal wishes.
What are the risks?
While the financial and legal benefits of early property transfer are clear, there are also real risks. The most obvious risk is loss of control. After the transfer, the property legally belongs to your child. This means that the property could be affected by factors such as divorce, debt, or financial difficulties on their end. If family relationships sour, things can get complicated. There is also the issue of fairness. If you give property to one child and not the other(s), you may unintentionally create tension or disputes later. Even if you have good reasons for your decision, it’s worth communicating them openly and documenting the process thoroughly.
Then there’s your financial future to think about. Ensure that the gift doesn’t leave you short on cash or without a fallback if something unexpected, such as major medical expenses, arises. Some parents choose to distribute part of their estate during their lifetime and leave the remainder through a will. This allows them to stay financially independent while still helping their children.
Alternatives: Wills and Trusts
Not everyone is ready to transfer property during their lifetime and that is perfectly fine. A traditional will is still a valid approach, though it is subject to Cyprus’ succession laws and rules. Another powerful option is to set up a trust, particularly a Cyprus International Trust. Trusts offer privacy, protection from creditors and long-term control over how and when your assets are used. They are especially beneficial for High Net Worth Individuals (HNWIs) or families with more complex situations such as international connections or blended family structures.
What about movable property?
It is worth noting that movable assets – money in bank accounts, vehicles, shares, personal belongings, etc. – can also be gifted during one’s lifetime without being subject to forced heirship rules governing their division. These types of transfers typically do not involve the District Lands Office and, in most cases, are not subject to taxation in Cyprus.
Final thoughts
Passing on property to your children is about more than just money – it’s about security, legacy and family unity. Cyprus offers a favourable legal and tax setup for doing so, but the timing and method should match your broader goals. Whether you choose to give during your lifetime, after your death or through a trust, ensure that you receive solid legal advice before making a decision.
A well-thought-out plan can protect your family, reduce costs and give you peace of mind, knowing that your assets will be handled exactly the way you intend.
*Annabelle Antoniades & Katerina Krassa, Advocates/Associates, Property and Immigration Department, Elias Neocleous & Co LLC
