Buying Property in Cyprus - Buyers' Guide

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Buying Property in Cyprus

CYPRUS PROPERTY: Guide to Buying Property in Cyprus

Buying property in Cyprus is a well-defined process and runs along similar lines in both in the EU Republic of Cyprus (Greek south) and the Turkish North. Many safeguards to protect buyer’s rights are in place and the Cypriot legal system is largely based on British administration. All properties in Cyprus are sold FREEHOLD.

Be Aware of The North: Bargains can be found in North Cyprus; however, claims are in process in the European courts regarding illegally sequestrated Greek property that has subsequently been sold on to Britons. All reputable developers in the Turkish north do guarantee title deeds are correct, but this is an issue you should be aware of before investing.

Non-Cypriot citizens must have permission from the Council of Ministers: This can take between 8 and 14 months but doesn’t cause undue delay as you can buy your property, then wait for the application to be processed.

Two certificates should be attached to the application form:

a) Certification from any person in authority in your country of origin, certifying your good character or clean criminal record.

b) A certificate from any financial institution to reflect your good financial standing. Certificates referring to minimum deposits of 35.000 Cyp to 40.000 Cyp are preferable.

Currency Regulations: When making your payment for purchase, a permit from the Central Bank of Cyprus is required for the funds transfer. However this permit is not necessary if both the purchaser and the vendor are foreigners.

All payments must be made through official banks and money brought into Cyprus in cash should be declared at upon arrival in Cyprus.

Costs: Solicitors cost, including drawing up the contract, power of attorney, purchase permit application and seeing the sale through to completion normally amounts to approx. £1,000.

Buying Property in Southern Cyprus

There are five steps to take when purchasing property in The Republic of Cyprus:

1. Reservation Deposit Agreement – Signing this agreement takes the property off the market for period of usually one month. Within this reservation period, your lawyer will carry out all the necessary investigations at the District Land Registry to ensure the seller is indeed the owner and ensure you get good title to the property.
   In Cyprus the reservation fee usually amounts to 1% of the property price. The reservation deposit will be “subject to contract”, i.e. non-refundable, but it is returnable if the lawyer’s searches are not successful.
   Searches consist of:
   Planning Department Search - This ensures a building permit exists and that the developer can legally build and sell to you.
   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.
2. Contract of Sale - Once all searches have been successful, the equivalent of the British "Exchange of Contracts" takes place. Upon signing the Contract of Sale, you have 6 weeks to pay the first installment to the vendor. If you fail to do so, then the contact can become null and void.
3. Possession - Possession of off-plan property will only be completed when actually delivered to the purchaser. At this stage you pay for all the utilities to be connected. You will also establish all rights in Cyprus, including such issues as residence, tax, driving, duty-free and domicile.
4. Transfer of Title Deeds - If the property title already exists, then both parties immediately proceed to the transfer of title deeds and the seller pays the remaining amount owed. However, if the property is new, then the title will take up to three years to be issued by the official authority. During this time, you will obtain legal security when a valid contract is signed, stamped and registered with the land registry.
5. 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 your name. You will then be responsible for the tax payments.

Buying Property in Northern Cyprus

7 steps when purchasing property in Northern Cyprus:

1. Secure your property and agree the price
2. A contract drawn up by the solicitor, stipulating the terms of sale, ie. price, time scale, vendor, purchaser and any special conditions.
3. The seller and purchaser sign the contract
4. You pay 10-20% deposit for the purchase, pending legal checks on the property
5. The solicitor applies for the Purchase Permit from the Council of Ministers (takes 4 to 8 months)
6. As soon as the purchase permit is received, you’ll need to pay the remaining balance due
7. You pay the balance and the seller signs over the Title Deed into your name.

See also: Property Investment in Cyprus