PURCHASE INFO

THE BUYING PROCESS
ALL ABOUT THE RESERVATION FEE
COUNCIL OF MINISTERS APPROVAL
TITLE DEED SEARCHES
LAND REGISTRY OFFICE (LRO)
CONTRACT SIGNING
STAMP DUTY
PAYING FOR YOUR PROPERTY
PROPERTY REGISTRATION PROCESS
PROPERTY TRANFER TAX
ALL ABOUT TITLE DEEDS
BUYING MULTIPLE PROPERTIES
MAKING ALTERATIONS
MAKING AN OFFER
AS AGREED WITH THE SELLER
TIPS
DEFINITIONS

Buying property in Cyprus is a simple process, provided that you’ve found the house you want to buy, the whole process can take only a few days.

According to Cyprus Legislation regarding property purchase by a non-Cypriot, you’re entitled to freehold ownership of one property – a house, villa, apartment or land up to 3 donums (4,014 sq m) for the purpose of building a house. In certain cases however, permission may be granted to own property that exceeds these limits.

Before you decide to buy in Cyprus, it’s necessary to be aware of the legal process, the costs involved, purchasing procedures, registration, Council of Ministers’ Approval , and other relevant factors. This section covers the above topics, more details can be provided by contacting us.

THE BUYING PROCESS

Upon deciding on the property you want to purchase, you can make an offer . If your offer has been accepted, and the price agreed between buyer and seller, you give a nominal deposit – reservation fee – of usually £1000 - £2000.

This short time period between reserving the property and signing of the sale contract, allows your solicitor to gather your details for obtaining the residency permit , do the necessary searches on the title deeds, and draw up a sale contract stating the payment terms. It also gives you time to arrange and transfer funds for payment of the deposit or the first installment upon signing the contract.

The contract is normally signed soon after your solicitor has done the necessary searches .

Upon signing the contract, normally 20%-35% – or as agreed with the seller - of the value of the property is paid. The payments of the remaining sum are according to the terms agreed and stipulated on the contract.

Upon payment of the final balance, you receive the keys of your property.

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ALL ABOUT THE RESERVATION FEE

- If your offer has been accepted and the price agreed, it’s common to pay a nominal deposit (aka Reservation Fee) of usually CY£1000 - £2000. You may if you wish pay more towards reserving a property, however it’s not recommended.

- The reservation fee legally binds the seller/developer to sell that property to you. In Cyprus, once a reservation is paid, unlike in the UK, no ‘gazumping’ takes place.

- It takes the property off the market.
- The reservation fee secures the price of that day – provided there are no lengthy delays on your part to sign the sale contract*.
- If through no fault of your own, the seller/developer reneges on the sale, your reservation fee is refunded in full.
- The reservation fee is not refunded if you decide for no apparent reason to pull out of the sale – this point cannot be reiterated enough!

*The reservation fee reserves the property for you to purchase within an agreed and assigned time period. The fact that it has been reserved by merely paying £1000, doesn’t mean that it will last forever… Sellers/developers expect the consequent contracts to be signed, and the first installment paid, within 2-3 weeks – maximum 4 weeks – from the date the reservation fee was paid. Delays in signing may be misconstrued as the buyer not being ‘serious’ and the risk of losing both the property and the reservation fee can be rather unpleasant. Therefore, awareness of this point will now ensure that you are prepared beforehand, and that by promptly signing the contract at the agreed time, you are covered.

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COUNCIL OF MINISTERS APPROVAL

Non-Cypriots on having signed a purchase agreement for a property, as a formality and routine procedure, are obliged to make an application to the Council of Ministers (COM).

The Council of Ministers is the body that grants its approval for a non-Cypriot to transfer a property (title deeds) to his or her name. The entire process may take 5-10 months, however in the meantime there are no restrictions in signing a contract, taking possession of your purchased property, and living in it, as you are the legal owner of the property according to contract law.

The Council of Ministers application procedure is undertaken by your solicitor.

The following is required from you for this procedure

- A bank reference.
- Character reference – for controls issues such as criminal records, etc.
- Purchase contract or document stating that the land size is within the required limits and that only one property is owned in Cyprus.
- Documentation stating that the buyer has the minimum required funds (pensions, income from investments, etc) to live in Cyprus.
- Copies of your passport.
- Your solicitor will inform you in case any other documentation or information is required.

What if my application is not approved?
Highly unlikely. Granted that all your documents are in order, your application will be approved. A UK citizen has never been refused approval. Should approval not be granted:

- You can reapply.
- You can still live in your house from the moment you purchase it, even prior to the approval.
- You have 33 years to sell your purchased property.
- It does not affect inheritance rights, transfer rights, etc.
- You can sign a new contract and nominate to transfer it to any other person’s or company’s name.

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TITLE DEED SEARCHES

Safeguards and informs you on any legal encumbrances related to the property. Your solicitor does the title deed searches prior to the signing of the purchase contract.

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LAND REGISTRY OFFICE (LRO)

Once the contract is signed and stamped, it must be deposited at the LRO within 2 months .

This is a safety measure for the buyer, thus blocking the property from being re-sold to anyone else, and guaranteeing the protection and legal rights in the event of non-observance of the contract. It safeguards your ownership rights until the COM’s application has been made and approved, and until the title deeds are issued and transferred to your name.

This process is undertaken by your solicitor.

Notes
Once registered with the LRO, the contract cannot be withdrawn or cancelled, and cannot be sold, transferred, leased or mortgaged by anyone else except the legal purchaser.

If the signed and stamped contract is not deposited with the LRO within 2 months, the buyer is liable to pay an extra fee for the delayed period. To avoid this, generally, the common practice is to leave the date on the contract open – to be filled in last by your solicitor right after both parties have signed. This measure is taken mainly in cases where the buyer lives abroad and the contract has to be sent or posted for signing, and then posted back.

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CONTRACT SIGNING

This can take from a few minutes to a few days. Once the contract is drawn up, both parties sign a set, initial each page, then the witnesses sign – the date is put in last by the solicitor. For authentication and validation, stamp duty is paid. Several copies are hence made, each party receives a copy, including the solicitor, and one copy is promptly deposited at the LRO by the solicitor.

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STAMP DUTY

Stamp Duty is paid within 30 days of signing the contract. Your solicitor handles this.

The buyer is liable to pay the Stamp Duty at the rate of Cy£1.5 per thousand for up to the value of Cy£100,000, and Cy£2.0 per thousand for any amount above that. Thereafter, the contract is officially recognized as an authentic and valid contract upon presentation to various authorities.

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PAYING FOR YOUR PROPERTY

All payments made for the purchase of property by non-Cypriots have to be effected by monies through foreign exchange, imported legally to Cyprus. Since it’s a requirement to pay from external funds, as proof that your purchases was through foreign funds, always you must keep all the documentary evidence of money transfers and payments. The same rule applies for purchasing a duty free motor vehicle. Your solicitor will advise and assist you on this issue.

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PROPERTY REGISTRATION PROCESS

This procedure is done at the LRO, after the COM’s approval is granted. Your solicitor will assist you on this. You will require the following documents:

- Certificate of the Central Bank
- COM’s approval
- Contract registration at the LRO – with the fulfillment of all the obligations of the contract.
- Check book, cash, or other methods of payment towards the property transfer tax .
- Your solicitor will inform you of any other required documents beforehand.

This process may take 5-10 months.

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PROPERTY TRANFER TAX

Property transfer fees are a one off payment for the buyer, and are due when the ownership (title deeds) of the purchased freehold property is transferred to the buyers name at the LRO (Land Registry Office). The rates are scaled gradually - on a sliding scale.

Example : On a purchase price of Cy£110,000:

The 1st £50,000 is taxed at 3%£1,500
The next £50,000 is taxed at 5% £2,500
Remaining £10,000 is taxed at 8% £800
Total transfer fees to be paid £4,800

When the property is bought by more than one person, by a couple for instance, the rate is broken in half:

Example: On a purchase price of Cy£110,000:

Example : On a purchase price of Cy£200,000

At the time you purchase the property, these title deed costs are fixed, so in order to save immediate expenditure, the title deeds may be purchased at a later date or when required.

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ALL ABOUT TITLE DEEDS
Usually properties that are over the age of 2-3 years will have title deeds – even if the original owner hasn’t applied for them.

If you intend to buy a property and wish to make alterations or additions on it, then title deeds are required.

Apartment blocks, housing complexes, holiday home projects and any project that is ongoing, may not be eligible for title deeds until 1-2 years after the completion of the entire complex.

Many people, especially those living in apartment blocks, where extensions/additions aren’t possible, simply don’t apply for title deeds.

If you want to sell your property without title deeds, the original contract with the seller is cancelled, and a new one made with your buyer. This case even applies after 10-20 years! (Cancellation fees of around £1000 may apply in this case however).

BUYING MULTIPLE PROPERTIES
According to Cyprus Law, non-Cypriots cannot have more than one set of title deeds. This regulation may change however or be abolished in the future under EU statutes. To circumvent this limitation, there are numerous investment firms and individuals who do purchase more properties, and simply don’t apply for title deeds.

MAKING ALTERATIONS
If you’re buying off plan or under construction from a developer, some alterations can be made to the original architectural drawings and plans, so long as it doesn’t drastically sway from the overall outlook and uniformity – if in a complex – from the surrounding units. As long as it’s structurally possible and within coverage and density specifications for that zone, it can be done – but in any case, the architects or builders opinion and permission is required. Regarding alterations, during the early stages of construction, or while viewing, simply by consulting with the builder/architect, you’ll be informed as to what you can or cannot do.

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MAKING AN OFFER
Considering that the said price is appropriate for the property on sale, if you make an offer that is acceptable for consideration and not ridiculously below the asking price of the seller or developer, it’s likely that your offer will be accepted or a compromise reached. Bear in mind however, that extras, extensions, alterations, changes in materials used and such aspects, which are above and beyond the existing plans and specifications, will affect the price and, perhaps even the time of delivery of the property if under construction. Developers make allowances for such matters (changes, extras, etc) that are then discussed and agreed between both parties and the costs involved are negotiated to satisfy the interests of both parties. As a general rule, if changes in materials for example, other than the one specified on the plan, are more costly per square meter, the difference is then borne by the purchaser. If on the other hand, the cost per square meter is lower than that specified, then the purchaser saves on the difference. You may even discover developers who do not mind throwing in a BBQ place or an outside shower free of charge!

With resale properties, flexibility is inapplicable, its mostly ‘what you see is what you get’. Alterations, changes, additions, extras and such are at the expense of the purchaser, and after the property is acquired. Above and beyond the price which you agree for a resale property, is negotiable and at the discretion of the seller - for example if you have an interest in their furniture, appliances, etc, as well.

Once the interests of both parties is established, discussed and agreed, it’s likely that the outcome will be a deal that benefits both buyer and seller. Not every single seller you encounter will be as agreeable – some may not budge - and to overlook the human factor is arduous especially when you intend to part with a lot of money to purchase a property from an adamant seller. Nevertheless, if it’s your dream home that you have encountered, the price is within your budget, and you unquestionably see yourself and your family living happily in it, then with the blessing of your solicitor, go ahead and reserve it. It’s a matter of weighing the pros and cons, and it’s entirely up to you if you want to buy it or move on.

Never buy under duress – don’t commit without being at least 90% sure that it ‘works’ for you.

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AS AGREED WITH THE SELLER
A reseller would probably expect payment of the entire amount before handing the keys to you. Developers’ terms vary from 20%-40% as down payment and the remaining sum divided into 2-4 further payments. When off plan or building your own, the payments are made according to the stages to be built – example: skeleton stage, brick stage, finishing stage, etc, etc.

TIPS

There are various reasons why people want to buy in Cyprus: to retire, relocate, invest, work, own a holiday home, or a semi permanent home… Whether your reason is one of the above, a combination of the above, or none of the above, your choice of property should reflect the intended lifestyle criteria. Considering the aspects important for you and your family, your financial resources, and so forth, plan ahead before viewing. Once you have a clear picture, start looking: search, compare, consult with your partner/spouse, kids, pets, bank account, agent, etc, etc, and then, if/when you find the property that ‘has your name on it’, make your move. In case you don’t find what you’re looking for, consider other alternatives: building your own, wait a while in case something turns up on the market, examine a property with potential of being transformed to your desired home, etc.

Perhaps it will help you to compile a list of what you’re looking for in a home – take into account: distance from town center/school/beach/grocer/baker/doctor/newsagent/gym/pub or whatever crucially applies to you… How many bedrooms/WC/size of kitchen, lounge… What area/location: bustling/quiet/urban/rural/coastal… Other notes: pool/garden/special requirements…

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DEFINITIONS

You – apart from meaning you yourself (singularly) also takes into account your family, partner, pets, etc, (plural).
Seller – also developer, individual, company, or whoever owns the property and wants to dispose of it by selling.
LRO – Land Registry Office, where the purchased property is officially registered in the purchaser’s name.

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FEEDBACK - Although we try as much as humanly possible to be correct and concise with the information on the website, however some errors might still occur. If you discover any such errors, please feel free to notify us so we can verify or correct it. Any feedback is welcome and appreciated to help best serve you.

O.G.ESTATES  does not handle or promote sales of properties on the occupied north of the island.

This website is regularly updated. It is advisable to visit O.G.ESTATES   regularly to stay ahead with any new information, properties, developments and prices, etc.