Hiring an experienced property lawyer
Buying property in Cyprus can turn into a nightmare without the proper guidance and support from an experienced Cyprus Property lawyer. Recent legal provisions in Cyprus safeguard the rights of a purchaser, however, the purchaser still bears the onus to take certain actions in order to achieve the transfer of ownership of a property to his/her name.
Reservation Agreement (If applicable)
Once a purchaser has found a property he/she is interested in, sometimes he/she wants to ensure that the Seller will be prohibited from advertising, negotiating the sale and/or selling the property to any other person. The solution to this is the signing of a reservation agreement by which the seller is prohibited from advertising and/or negotiating the sale of the property and/or selling the property to any other person in exchange for a fee, the so-called "reservation fee". Depending on the value of the property the reservation fee may be anywhere between 3000 Euros to 10000 Euros but there is no specific limit.
Due diligence
Due diligence is one of the most crucial steps when buying property in Cyprus, that is why we wrote an article specifically for this topic. You can view our full article here. The most important factor in regards to due diligence is to have the title deed of the property and a search certificate examined by an experienced property lawyer. Extra caution needs to be exercised in the scenario of newly-built or recently-built properties where a title deed has not yet been issued.
Negotiation and drafting the Terms and Conditions of the Contract of Sale
The rights of a purchaser of a property emanate from the submission of a Contract of Sale to the Land Registry of the District in which the Property is situated. That is, before the transfer of a title deed of the property in the name of the purchaser. Consequently, it is paramount that important terms and conditions are negotiated in a way that the rights of the purchaser are safeguarded and in a way that they are clearly stipulated and agreed upon. Some important terms include the data of the parties involved (seller & purchaser), the data of the property to be sold, the purchase price, the payment terms, the date of the delivery of the possession of the property, and the delivery of the title deeds of the property, which will turn the purchaser into the owner of the property. As a result, hiring an experienced Cyprus property lawyer is important for safeguarding your rights as a purchaser. Nonetheless, it should be noted that sometimes a Contract of Sale is not necessary, for example when the purchaser pays full price to receive a property with title deeds.
Stamping the Contract of Sale
Before the submission of the Contract of Sale to the Land Registry, it is a requirement that the Contract is stamped by the Tax Department. Depending on the value of the property, this process costs to the purchaser as it is common practice for the purchaser to pay the cost for the stamping of the Contract of Sale.
Submission of the Contract of Sale to the Land Registry
Once the Contract of Sale is duly stamped by the Tax Department, the purchaser has to submit the Contract of Sale to the Land Registry of the District in which the Property is situated. The law provides a strict timeframe of 6 months from the date of signature of the Contract of Sale, for the Contract to be submitted to the Land Registry. This timeframe includes the time necessary for the stamping of the Contract. It is paramount to submit the Contract of Sale to the Land Registry, otherwise, the purchaser does not obtain any rights on the property and may only have a personal claim against a seller who for any reason did not proceed with the sale.
Permit to acquire immovable property in the Republic of Cyprus by non-EU citizens
Citizens of the Republic of Cyprus and citizens of states belonging to the European Union may purchase property without any restrictions. On the contrary, citizens of states that are not part of the European Union may purchase property in Cyprus only after obtaining a relevant permit from the Ministry of Interior. Such application is submitted to the relevant authority with Form Comm. 145 and the relevant supporting documentation that should indicate inter alia, that the purchaser can repay the purchase price and has the income to support him/herself.
Transfer of the title deeds – transfer fees
The final step in the journey to acquire property in Cyprus is the transfer of the title deeds of the Property into the name of the Purchaser. Provided that the due diligence was done properly, the Purchaser will obtain a clean title deed with no notes and no encumbrances burdening the Property. It is clear that this is the end goal when buying property in Cyprus, and if there is the ability to pay the purchase price in full simultaneously with the transfer of a clean title deed into the name of the purchaser, some of the steps above may be avoided (such as steps 4 to 6). The purchaser of a property should have in mind that he/she has to pay the Land Registry for transfer fees which depend on the value of the property.
Our Cyprus law firm is able to provide a wide range of services regarding property law-related matters and the purchase of real estate in Cyprus, by providing any necessary service, guidance, assistance, and advice concerning all stages of purchasing property, while protecting your interests and ensuring a safe transfer of title deeds in your name.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.