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A Buyers’ Guide To Cyprus
Once you have found your ideal property in Cyprus, it is essential that you fully understand the purchase process. Below is a guide to buying a property in Cyprus.
- Reservation Deposit Agreement - The first step is the signing of the Reservation Deposit Agreement. This takes the property off the market for a specified period of usually one month.
Within this reservation period, the appointed lawyer will carry out required investigations at the District Land Registry to ensure that the vendor of the property is indeed the owner and ensures that the purchaser obtains good title to the property.
In Cyprus the reservation amount is usually at 1% of the property price. The reservation deposit will be “subject to contract” i.e. it is non-refundable, but it is returnable if the searches are not successful.
Searches before Exchange of Contracts:
- Planning Department Search - This ensures a building permit exists and that the developer can legally build and sell to other entities.
- A company search - A detailed company search demonstrates that the developer has the legal capacity to enter into contracts of sale, and that it is not been served a liquidation order.
- Signing the Contract of Sale - Once all searches have been successful the next step is the signing of the Contract of Sale by both the vendor and the purchaser. This is similar to the English term, "Exchange of Contracts". Upon signing the contract of sale, the purchaser has a 6 weeks period to pay the first installment to the vendor. If the purchaser fails to do so, then the contact can become null and void.
- Possession of the Property - Possession of the property will only be completed when it is actually delivered to the purchaser. At this stage the purchaser pays for all the utilities to be connected and he establishes all rights in this country, such as: residence, tax, driving, duty-free and domicile.
- Transfer of Title Deeds - If the property title already exists, then both parties immediately proceed to the transfer of title deeds procedure for the new owners and pay the remaining amount owed. If the property is new, then the title will take up to three years to be issued by the official authority. In this case the remaining amount owed is repaid to the vendor with the delivery of the property. During that time, legal security to the purchaser is provided when a valid contract is signed, stamped and registered with the land registry.
- Property Taxes, Fees and Rates - Real Estate transfer taxes are paid once to the Land Registry and are necessary in order to transfer freehold ownership to the name of the purchaser. The transferee is responsible for the tax payment.
- Non Cypriot citizens require permission from the Council of Ministers to purchase property in Cyprus. This normally takes about 8 to 14 months. In the meantime the purchaser can buy the property and live in it while waiting for the application to get approved.
- The two certificates below should be acquired by the applicant in his country and sent as soon as possible. These two certificates will be attached to the application form:
- A certificate from any person in authority in the country of the applicant certifying his good character or clean criminal record.
- A certificate from any financial institution as to the applicant's good financial standing.
- Upon the repayment by the purchaser, a permit from the Central Bank of Cyprus is required for the transfer of the purchase money. This permit is not necessary if both the purchaser and the vendor are foreigners.
- All payments should be effected through official channels (banks) and money brought in cash should be declared at the airport or sea port upon arrival.
- All properties in Cyprus are sold freehold.
- The Cyprus legal system is largely based on Britain 's and provides many safeguards to protect the rights of the purchaser.
To purchase a property in northern Cyprus, the process is similar to that of southern Cyprus. However, there are a number of checks carried out by the Ministry of Interior and this will inevitably mean the sale will take approximately 4-8 months to be completed.
The process for buying any freehold property:
- Secure property and agree the price.
- Contract drawn up by solicitor, setting down the terms of sale, ie. price, time scale, vendor, purchaser and any special conditions.
- Vendor and purchaser sign the contract
- Purchaser provides 10-20% deposit, pending legal checks on the property.
- Solicitor applies for a Purchase Permit from the Council of Ministers, (takes 4 to 8 months).
- As soon as the purchase permit is received, the remaining balance remains due from purchaser.
- The purchaser pays the balance and the vendor signs title deed into the name of the purchaser.
- Sale is completed.
The costs involved:
Solicitors cost, including; drawing up of contract, power of attorney, purchase permit application and seeing sale through to completion = approx. £1,000.
Propertyshowrooms.com will gladly put you into contact with a reputable English speaking lawyer or other professional to assist you with your property purchase in Cyprus.
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