Why is it so hard in Cyprus to bequeath property where the owner sees fit?

It’s all fun and games until you need the official documents. This is what a couple from the UK, visiting the island every year since 1981, found out when they bought property in Cyprus.

Carefree holidays on an island they came to love were suddenly replaced by the dismay, disappointment, frustration and stress of endlessly running around in circles.

Edmond and Claire (not their real names) decided they loved the island so much that they would retire here, so in 2005 they bought a plot of land in Ayios Tychonas from a developer.

What they did not know was that the plot itself was actually part of a larger piece of land, of which they became the co-owners and had no idea where their boundaries were. So, they were unable to build. Three years in and out of court did eventually lead to getting their names on the land, but for an unspecified plot, making it impossible to do anything with it.

Meanwhile, the developer failed to deliver on a promise in writing that utilities – a road, electricity and water – would be made available within a year of purchase.

The couple were helped by a Cypriot friend, Lakis (not his real name), who knew the ins and outs of the system and spoke Greek and English fluently.

Under his guidance, they took the developer to court and managed to get their ownership in writing, but the lawyer cautioned them against suing for the unfulfilled promise of a road, water and electricity as the developer was a well-known hothead.

“I am so lucky to have good Cypriot friends who are also trying to help me navigate the system,” Claire told the Sunday Mail.

Seeing their dream retirement going down the drain, they decided to purchase another plot with Lakis in another area of Limassol. Wary about the land, they asked the lawyer to make sure everything was in order. They were soon assured it was.

After buying the land, they sent off their blueprints to obtain a building permit, only to be told that an old road and water tank were inside their boundaries and to their surprise they were unable to build.

“In the UK, you go to a lawyer and they advise and tell you the correct route to take. They do everything for you and you trust the lawyer. In Cyprus, it’s completely different,” Claire complained.

In 2018, Edmond died. Claire believes that the stress of their situation contributed to this. Edmond’s will left the land to Claire.

However, she was in for another surprise. When she tried to sell the land, not only was it impossible due to the vague ownership status, but Cyprus’ forced heirship laws meant their estranged son was entitled to a share.

“Once again I’m hitting a brick wall with the Cyprus legal system, and nobody seems to care,” Claire said.

Not knowing that as a foreign national he could include a clause in the will, Edmond did not specify he wished for the will to be executed according to UK law, although clauses would most likely make this impossible anyway.

According to Cyprus law, succession is governed by two main pieces of national legislation, namely the Wills and Succession Law and the Administration of Deceased’s Estate Law. In addition, as a member of the European Union, Cyprus applies European law on succession matters, such as the EU Succession Regulation.

By law, a person can write a will, however, their wishes are only applicable for the disposable portion of it. The remaining property is referred to as statutory portion. The calculation of both the disposable and statutory portion depends on who the surviving relatives at the time of death are.

Cyprus law aims to protect family bonds, imposing restrictions on the freedom of the writer of a will to dispose of the estate as they see fit.

Protected people include close relatives, namely the spouse, children or grandchildren or parents, for whom a substantial part of the estate of the deceased is guaranteed under the regime of forced heirship.

However, EU law allows EU citizens to choose the law of the country of their nationality as the governing law of their will.

Edmond, who died before 2020’s Brexit, could have opted for UK law for the administration of the estate in the event of his death, and avoiding the forced heirship regime altogether. But here again there are regulations.

The decision to apply an EU country’s law should be mentioned clearly in the will, as failing to do so will make the Cyprus law of succession applicable by default.

However, there are certain exemptions linked to whether a deceased has left movable or immovable property in Cyprus.

For immovable property, the succession is governed by the law of the country where the specific immovable property is situated so Cyprus law applies regardless of the testator’s domicile country at the time of death.

For movable property, if the deceased has mentioned clearly in his/her will the decision to opt for the law of their domicile country, the law of that country will prevail over the distribution of movable property.

There are four classes of kindred who are entitled to inherit in a will. First are the legitimate children of the deceased and their descendants who died during his/her lifetime; second are any parent or sibling of the deceased; third are the closest in degree of kindred living ancestors of the deceased, such as a grandparent; and fourth are the nearest relatives of the deceased alive at the time of his/her death up to the sixth degree of kindred, namely cousins and siblings of grandparents.

The disposable portion of the estate is calculated in three ways. First, where a person passes away, leaving spouse and a child, or spouse and descendant of a child, or no spouse but a child or descendant of a child, the disposable portion must not exceed one-fourth of the net value of the estate; Second, when a person passes away, leaving spouse or father or mother but no child or descendant of a child, the disposable portion shall not exceed one-half of the net value of the estate; and Third when a person passes away, leaving neither a spouse, nor a child, nor a descendant of a child, nor a father, nor a mother, he/she is free to dispose as he/she wishes all of the estate.

If the will disposes more than the disposable portion, it will not be void, but the disposition will be reduced and limited to the disposable portion.

The remaining statutory portion will be disposed of according to the rules covering wills.

The portion of the spouse is calculated first and then the rest of the estate will be distributed to the relatives of the deceased depending on the degree of kindred.

On a positive note, there is no inheritance tax for people who passed away after January 1, 2000, when inheritance tax was abolished.