The procedure for buying property in Cyprus
After reviewing the offers on Cyprus real estate market, the infrastructure of a city or region and choosing that real estate that fully meets the wishes of the Buyer, his criteria and financial capabilities, the most crucial moment comes - the conclusion of the contract for the sale of real estate and its registration with the Land Committee Republic of Cyprus.
Basic rules for buying
After the Buyer makes a decision to buy the real estate in Cyprus, he makes a reservation fee for the selected an object. Typically, the reservation fee will be between € 1,000 and € 10,000. After paying the deposit, the property is removed from the sale and reserved for the Buyer, who is issued a confirmation of the reservation document. The paid amount of the reservation fee is included in the cost of the purchased object.
At the same time, the investor enters into an agreement with a local lawyer to support the transaction and issues him the necessary powers of attorney. The participation of a lawyer is required when buying real estate on the secondary market. When purchasing real estate from developers, the services of a lawyer are provided directly by the developer, or the buyer can use the services of an independent lawyer.
Real estate in Cyprus for the Buyer is reserved, as a rule, for a period of one to two months. During this period, the lawyer performs the following actions:
- Checks real estate documentation;
- Organizes the release of the object from encumbrances and pledges (if any);
- Prepares the Sale and Purchase Agreement, coordinating it with the parties to the transaction.
Further, the Buyer, after receiving information from a lawyer about the readiness of the Sale and Purchase Agreement and other documents, agrees with him the date of signing the Agreement. The Buyer can sign the Sale and Purchase Agreement directly in Cyprus, or remotely by sending the documents and the Agreement signed on his part to Cyprus by express mail.
Payment under the contract
After signing the Agreement by both parties, the Buyer makes payments in accordance with the terms specified in the Agreement. After the Buyer pays the first payment specified in the contract (as a rule, such a payment is 30-40% of the value of the purchased object), the lawyer, on behalf of the buyer, together with the developer's representative (or the owner of the secondary real estate), performs:
- Payment of Stamp Duty (Stamp Duty);
- Registration of the Agreement with the Land District Office (Land District Office) in the name of the buyer.
The essence of the registration of the Agreement with the Land Committee is that the state registrar formalizes and fixes the current status of the real estate purchased by the buyer from the Developer in the primary market or from the Seller in the secondary market.
From this moment on, only the Buyer who is the Owner of the property can receive, in particular, a loan from a Cypriot bank secured by this object. The Seller or the Developer will no longer be able to do this, since the first right of claim now belongs to the Buyer.
Preparation of statements
Immediately after registration of the Agreement, a lawyer, if necessary, prepares the following Applications:
- 1. Prepares Application for obtaining permission from the Council of Ministers of Cyprus for the purchase of the first real estate. This procedure is a formality, since the officials check that the Buyer has no legal problems (his name should not appear on the Interpol lists) and the housing being purchased is the first (for citizens of non-EU countries);
- 2. Prepares an Application to the tax authorities for a VAT exemption (if applicable).
Obtaining tax incentives
Approximately 20 days after that, the tax authorities issue an approval at receiving VAT relief for the rate of 5% (instead of 19% on the next property purchased from developers earlier than 10 years after the purchase of the first unit of real estate). The Buyer then pays the remainder of the cost in accordance with the terms and conditions specified in the Purchase Agreement.
Obtaining property rights
Having paid in full for the purchased property, the Buyer takes over the ownership of his property and receives the keys from it. After the completed property is put into operation (in the case of buying a residential unit from developers), the District Land Office issues a Title Deed (Title Deed) for it.
After receiving the Title Deed, the Buyer pays the Transfer Fee (Transfer Fee) (in the case of buying a home on the secondary market) and becomes the registered owner of the home.