Buying Property in Cyprus

Once you have found your perfect property in Cyprus, agreed your purchase price and Worldwide Lawyers has found your English speaking Cypriot lawyer you are ready to move forward with the buying process.

The property buying process in Cyprus starts with an initial contract (often referred to as a Reservation or Preliminary Contract) which documents a formal offer of purchase made by the buyer. Signing this contract and paying a small deposit of around €1000 – €5000 (depending  on the purchase price) ensures that your chosen property will be removed from the market for a specified period while checks in relation to the seller, property title and any building permissions are carried out by your Cypriot property lawyer. It is essential that you instruct a reliable independent lawyer to investigate the property title before signing any contract or handing over any deposit.

Once these initial checks have been carried out and the seller has accepted the buyer’s offer, the buyer and seller will then enter into the Sale Contract. The Sale Contract will include all conditions of the property sale and dictates the essential elements of the transaction. Usually a deposit of around 10% is payable by the buyer when signing this binding contract. Your lawyer will explain the obligations of each party as a result of entering into this contract before it is signed.

You can either sign the Sale Contract in Person or you can arrange a Power of Attorney for someone else, usually your lawyer, to sign on your behalf. Should you require a Power of Attorney, your lawyer will be able to prepare this for you. You can put the Power of Attorney into effect by signing this in Cyrus in the presence of a Cypriot Notary, through the Cypriot consulates in the UK, or through a British Notary Public with a Hague Apostille.

Once the Sale Contract has been signed your lawyer will register this with the District Land Registry Office. This is an essential element of the transaction as this commits both parties to the transaction. This ensures and confirms the ownership of the buyer before he receives an individual title deed of the property. Stamp Duty will be payable by the buyer when depositing the Sale Contract with the Land Registry. Usually the balance of the purchase price is paid to the seller on an agreed completion date (or in stages agreed with the developer if you are buying a new build).

Non-EU citizens will need to make an application to obtain permission to buy a property in Cyprus from the Council of Ministers. It can take anywhere from one to several months for confirmation of approval to be received.

Title Deeds known as Certificates of Registration of Immovable Property formally document the property ownership. Each property in Cyprus has an associated Title Deed which contains information such as its registered owner, its size, its location and the Lands’ Office reference.

Whether or not the title deeds will be immediately available for transfer into your name will depend on several factors such as the age, location and previous ownership of the property. It is not uncommon for it to take several months if not years to issue the new title deeds to the purchaser. Because of this, new Specific Performance Laws were enacted in 2011 in order to provide some safeguards for people purchasing property in Cyprus. The act of registering the Sale Contract with the District Land Registry invokes the buyer’s right of Specific performance. This essentially means that the seller is prevented from mortgaging, charging, reselling or otherwise interfering with the buyer’s rights to the property, until the separate title deed is ready. Once the Transfer Deeds are available, the seller must transfer the deeds into your name.

Once the Title Deeds have been drawn up, all parties, or their lawyers, meet up at the District Land Registry Office to pay the land registration transfer fees which are payable by the buyer. This transfers the property from the vendor to the buyer.

The next step is to enjoy your new property in Cyprus happy in the knowledge that your independent Cypriot lawyer has taken care of all legal formalities for you and your interests have been protected.

Congratulations!

The additional costs of buying a property in Cyprus will vary considerable depending on the value of the property on average this will be around 10% of the purchase price.

The cost will include:

The property purchase price

As agreed between you and the vendor.

Legal Fees

Lawyer’s fees are usually charged as a percentage of the purchase price- typically 1-2% plus IVA (VAT).

There may be an additional cost if a Power of Attorney is required. Your lawyer will advise you of their fees for this.

Tax

When buying a “new build” property you have to VAT of 19%. Check with the developer whether or not this in included in the asking price before making your offer. For “resale” or  “second hand” properties you do not need to pay VAT.

Stamp duty of 0% for first €5,000 of the purchase price, 0.15% is payable on €5001-€170,000 and at 0.2% per cent over that. The maximum Stamp Duty is €20,000

Land Registry Fees

The Land Registry imposes a Transfer Fee when the transfer of the title deed takes place.

This fee is charged on a sliding scale between 3-8% of the purchase price depending on the value of the property and the number of purchasers. The transfer fee is payable by the purchaser.

If there are two or more names on the contract (i.e. husband and wife), the purchase value is divided between the two which results in reduced transfer fees.

Estate Agents Fees

The estate agent’s fee is usually paid by the seller and can range from 3-5% of the sale price.

Cyprus has had its fair share of property difficulties over the years. Whilst a lot has been done to ensure buying property in Cyprus is attractive and safe, instructing an independent English speaking lawyer to protect you interests and provide advice and reassurance that the legalities are checked on your behalf is essential.

You should protect yourself by instructing an independent lawyer in Cyprus as soon as possible and before any formal steps have been taken to make an offer to purchase a property. This will allow your lawyer to advise you properly on all aspects of the transaction to ensure your position is fully protected.

Contact us on 01244 470339 for free help to find an independent English speaking lawyer in to assist you with buying a property in Cyprus.