Purchasing real estate property in Cyprus? Find out what actions you have to take to avoid unpleasant surprises!
You have finally made the decision to buy your dream house in Cyprus. You have found the right property, made your offer and the seller has accepted it. For many purchasers, the legal aspect of purchasing real estate property can become quite confusing. In this article, we provide you with a brief description of the steps you have to take when purchasing real estate property in Cyprus.
Step No. 1 – Title Deed – Search Certificate
Before executing any sale purchase agreement and/or reservation agreement, you should make sure that the property is covered by a title deed and is free of any charge, third party rights or any other legal or real encumbrances or obligations whatsoever. In order to be certain, ask the seller to provide you with a recent copy of a title deed and a search certificate, both issued by the District Land Registry Office. This certificate expressly states all charges, third party rights and encumbrances registered with regards to the specific real estate property.
Step No. 2 – Execution of Agreement
Provided that the way of payment has been agreed and the parties are willing to proceed, the next step is the execution of a sale and purchase agreement. The agreement is usually drafted by the seller’s lawyer. We strongly advise you to use the services of a legal advisor at this stage, so as to ensure that your rights are preserved and that your intentions are correctly expressed in the agreement.
Step No. 3 – Stamp Duty
Following execution of the agreement, the same has to be legalized by the Inland Revenue Department. Currently the stamp duty rate is of 0% for the first EUR 5,000.00 of the value of the property, 0.15% from EUR 5,001.00 to EUR 170,000.00 and 0.20% for EUR 170,001.00 and above, capped at a maximum of EUR 20,000.00. The agreement should be stamped within 30 days from execution, otherwise penalties are applicable. Standard practice is that the purchaser usually pays the expenses for the legalization of the agreement.
Step No. 4 – Filing of the Agreement with the Land Registry
Once the contract of sale is signed and legalized, the purchaser has the option to file a certified copy of the sale purchase agreement at the Land Registry to ensure the transfer of the acquired property into his/her name.
Specific Performance Law safeguards a purchaser of property from a transaction between a seller and a purchaser, especially when the purchaser is not allowed to immediately transfer the acquired property into his/her name even though payment of the consideration has been made. Depositing a copy of the agreement to the Land Registry gives the purchaser, according to the above law, the right to seek “specific performance” of the terms and conditions of the sale purchase agreement and thus to register the property into the purchaser’s name. The sale purchase agreement filed with the Land Registry can be withdrawn only with the purchaser’s consent.
Step No. 5 – Permit for Acquisition of Property by the Council of Ministers
Cypriots and other EU citizens are allowed to acquire any immovable property in the Republic of Cyprus without any restrictions or limitations.
Non EU citizens require a permission by the Council of Ministers and have a limitation of 2 units (2 houses or 1 house and 1 shop) per couple. The permit is acquired following the submission of personal and financial information of the purchaser to the authorities.
Step No. 6 – Transfer of Property
The process takes place at the District Land Registry Office, where both the buyer and the seller or their authorized attorneys should be present to execute the transfer documents in front of the officers of the District Land Registry Office. Following the review of the sale purchase agreement by the officers of the Land Registry, the same is sent for valuation. On the basis of the valuation of the property, the transfer fees will be calculated. The purchaser is responsible for payment of the transfer fees which are payable to the Land Registry officer at the time of the transfer. To transfer freehold ownership into the name of the buyer, transfer fees must be paid.
Find out the transfer fees payable based on the property’s purchase price, by clicking on the link below:
http://portal.dls.moi.gov.cy/en-us/Pages/CalculateTransferFees.aspx
Upon payment of the transfer fees the process is considered complete and title deed of the property into the purchaser’s name is issued in approximately 1 month.
We are able to assist you in buying your property in the Republic of Cyprus.
Contact us now for a free consultation.