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Land for sale in Cyprus

Purchase Procedure And Costs

Cyprus has flexible property buying procedures compared to many countries. Cypriots and European Union citizens are allowed to purchase as much as property as they choose. A non-EU citizen is entitled to FREEHOLD ownership of a villa, apartment, or a piece of land of up to 4,000 sq.m.

International business units may also acquire premises for their activities or for residence of their foreign employees.

For the purchase of cyprus property or any cyprus real estates by non-Cypriots the following procedure must be followed:

1. Contract of Sale  

The lawyer responsible for drafting the contract beside inserting the fair terms and conditions for the protection and interest of the buyer will examine the deeds of the property sold by obtaining a copy from the vendor or the Land Registry Office and generally he will make sure that all the details correspond to the property in question and that it can be sold to the prospective buyer assuring that at the end the buyer will be able to register the title deed into his name free of any encumbrances. When the contract is ready at the satisfaction of the buyer it can be signed by the buyer himself or by his lawyer by virtue of a power of attorney that can also be used for all other necessary acts and documents until the completion of the transaction.

2. Stamp Duty

Once the contract is signed the purchaser is responsible for the payment of stamp duty at the rate of CYP1,50 per thousand towards the purchase price up to the value of CYP100.000, thereafter the rate is CYP2,00 per thousand. The contract must be stamped within 30 days after its signing in order to avoid the payment of a fine.

3. Lodging a copy of the Contract of Sale with the Land Registry Office

As from the date of signing the contract of sale the buyer has the right within 2 months from that date to lodge the contract with the Land Registry Office for what is called specific performance purposes. This is very important for the protection of the buyer mainly for two reasons. First, once the contract is lodged the buyer is considered the beneficial owner of the property until the time he becomes both the beneficial and legal owner of the property by transferring the title deed into his name. Therefore, there is a clear declaration that he bought the property in question, the Land Registry Office is aware of this transaction and his interest is protected e.g. by preventing the vendor to resell the same property to somebody else or by having a mortgage over the property.

The second main reason is to secure that the title deed will pass to the buyer even if the vendor is not willing to act for that purpose. Title deeds usually are ready 3-4 years after completion of the whole project, which is considered a standard practice in (unless the property sold is already built some years ago and is a single project, which means that the title deed is available when the contract is signed). On that time if the vendor is delaying or refusing to grant the deeds then the buyer can file an action against him and ask the Court inter alia for an in injunction for specific performance otherwise the only remedy available to the buyer would be an action for damages something undesirable especially when the property in 3 or 4 years time worth another e.g. 40% of the original purchase price.
 
4. Payments to the vendor

After the contract is signed we will arrange to open the necessary account(s)  on your name(s)  with a local Bank which are going to be used by you in order to transfer your money from abroad and make the necessary payments to the vendor.

5. Permission from the Council of Ministers

Before transfer of the property sold on the name of the purchaser a permission must be sought from the Council of Ministers (District Office) by written application which must be submitted by the purchaser after the agreement is signed. However, this permission is granted more or less as a matter of course to all bona fide purchasers. This procedure may take 8 – 10 months but in the meantime, purchasers can take possession of the property without any restriction.

6. Transfer of Ownership at the Land Registry Office

Property Transfer Fees are based on a sliding scale as follows:

3% - on the first € 85,430

5% - on the next € 85,430

8% - on the remainder

The transaction is concluded with the transfer of ownership by a simple process of registration at the Land Registry office once the necessary permission from the Council of Ministers is granted (as prescribed above) and as soon as separate title deed for the property sold is issued by the Land Registry Office reflecting the property erected on the land. At this stage the buyer is responsible for the transfer fees.

The rates are on a graduated scale towards the price of the property i.e. up to Euro 85, 430 (CYP50,000) 3%, from Euro 85, 430 to Euro 170, 860 (CYP50,000 – 100,000) the rate is 5% and from over Euro 170, 860 (CYP100,000) is 8%.

Example  of Property Transfer Fees in Cyprus old currency (Cyprus Pounds)

For example if the purchase price is CYP 80,000 

The first CYP50,000 x 3% =              CYP 1500

Next      CYP30,000  x5% =              CYP 1500
                                                ------------ 
                                           Total CYP 3000

If the purchase is made in joint names then the total amount is divided by two and you could have a fee reduction advantage 

 For example if the purchase price is CYP 80,000 

 The first CYP40,000 x 3% = CYP 1200

 Next      CYP40,000  x3% = CYP 1200 
                                       ------------ 
                                Total CYP2400

 * The inheritance tax in was abolished as from 1/1/00.

 *  All the above steps for purchasing property in can be done by a power of attorney and the purchaser does not have to come to in order to purchase property in.

Another Example of Property Transfer Fees in in Cyprus old currency (Euro currency) :

So for a home costing € 200,000, the Transfer Fees would be € 9,165.60; for a home costing € 400,000, the Transfer Fees would be € 25,165.60.

If your Contract of Sale is in joint names (e.g. a husband and wife), the lower rates are granted to both parties, i.e.:

3% - on the first € 170,860

5% - on the next € 170,860

8% - on the remainder

As a result, the Property Transfer Fees for a home costing € 200,000 in joint names would be € 7,457.

 

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