The process of buying property in Cyprus

Why do foreigners choose Cyprus

Climate and good ecology are significant factors that influence the choice of foreign buyers real estate in favor of Cyprus. It has a very mild winter here - the average daytime temperature is 17 degrees, the water in the sea does not fall below 16 degrees, and the season in the country is very long, which is probably not the case in any other EU country. Private English and Russian schools provide high-quality education and it is really not very expensive. Cyprus has two international airports, from which you can reach anywhere on the island in a maximum of an hour and a half, thanks to a well-developed network of excellent roads. There are always fresh local fruits and vegetables available throughout the year, as they are harvested 2-3 times a year. As for real estate, two important factors work in favor of Cyprus - the absence of an annual property tax and the opportunity to obtain a residence permit if the value of the property exceeds 300,000 euros.

Object selection

When choosing an object on the primary Cyprus real estate market, it is necessary to clearly check whether the deadlines for the completion of the object are specified in the contract (if the house is still under construction or is at the project stage) and whether penalties are indicated for non-fulfillment of these obligations. The lawyer accompanying the transaction must verify with the developer the availability of all necessary licenses for the construction of this facility and credit encumbrances. And if there are any, then you need to get the appropriate documents from the bank stating that this property will be released from collateral at the time of receipt of the certificate of ownership of the object.

When buying a home in the secondary real estate market, the first thing you should pay attention to is the presence of a title page, that is, the final certificate of ownership. If more than three or four years have passed since the house was commissioned, and the title page has not been received, then violations were recorded during the construction of this project (or there are credit encumbrances from the developer if the object is acquired through him). Accordingly, such a purchase should be approached with extreme caution. There are also cases when the buyer does not issue the title page simply because he wants to avoid paying taxes.

The process of completing the transaction

When the transaction begins, the algorithm of actions will be almost the same, regardless of whether the object belongs to primary or secondary real estate. The first step is to make a deposit, after which this house or apartment (there are no differences when buying different types of objects) It is being withdrawn from sale. Usually, the reservation fee is between 1,000 and 10,000 euros, and a corresponding supporting document must be issued. The paid amount of this contribution is included in the cost of the purchased housing. The buyer's property is reserved, as a rule, for a period of one to two months.

During this period, the lawyer checks the documentation for the object and organizes the release of real estate from liens and encumbrances (if any). The lawyer also prepares the purchase and sale agreement, coordinating it with all parties to the transaction. The difference in it may be as follows: the document prescribes a payment schedule and deadlines for the acceptance of the house if the house has not yet been commissioned, but if it is secondary, then the keys to the house can be obtained from a lawyer or from the agent through whom this object was found after the payments are completed.

After receiving information from the lawyer about the readiness of the documents and the purchase agreement, the buyer agrees with him on the date of signing the agreement. This procedure can be carried out directly in Cyprus or remotely by sending the signed documents to Cyprus by express mail. Then the future owner makes payments according to the terms specified in the contract.

Further, the lawyer, if necessary, prepares an application for obtaining permission from the Council of Ministers of Cyprus for the purchase of the first property by the buyer. This procedure is only a formality, since the Council of Ministers verifies that the investor has no problems with the law (his name should not appear on Interpol lists) and the purchased housing is the first (for citizens of non-EU countries).

Housing purchase expenses

When buying a secondary property, the biggest expense in addition to the cost of the object itself is the payment of the Transfer Fee - up to 85,000 is 3% of the transaction amount, over 85,000 and up to 170,000 is 5% of the transaction amount, and for everything over;170,000 8% of the transaction amount. But now there is a 50% discount in Cyprus, so all these costs are halved. For example, for a secondary property worth 500,000 euros, the Transfer Fee will be 16,600 euros.

It is also necessary to include in the expenses the cost of paying for the services of a lawyer accompanying the transaction, which is usually 0.5-1% of the transaction amount. The buyer enters into an agreement with a Cypriot lawyer for the legal support of the purchase and sale transaction and issues him all the necessary powers of attorney. An important point: the participation of a lawyer is necessary when buying real estate on the secondary market. When buying real estate from a developer, the services of a lawyer are provided directly by the developer or the buyer, if desired, can use the services of an independent lawyer.

After the buyer makes the first payment specified in the contract (as a rule, such payment amounts to 30-40% of the value of the purchased property), the lawyer, on behalf of the buyer, together with a representative of the developer (or the owner of the secondary property), pays Stamp Duty, registers the contract with the Land Committee (Land District Office) on behalf of the buyer..

When buying a primary property in Cyprus, it is necessary to pay VAT - if the first property is purchased in Cyprus, the tax amount will be 5%, if not, it will be necessary to pay 19% of the value of the property. The discounted rate can be maintained when buying another property in Cyprus from a developer, provided that the previous property was purchased more than 10 years ago. After paying VAT, the buyer pays the remaining part of the value of the property according to the terms and conditions specified in the contract of sale.

Then the buyer takes ownership of his property and gets the keys in his hands. After the completed facility is put into operation (in case of purchase of housing from the developer), the Land Committee (Land District Office) issues a certificate of ownership (Title Deed). In case of purchase of real estate on the secondary market, upon receipt of this document (Title Deed), the buyer pays the Transfer Fee and becomes a registered homeowner.

The rights and obligations of the Cyprus property owner

If the owner is not a citizen of the European Union, then after purchasing the property, he can obtain a residence permit allowing him to stay permanently in the country. If the property belongs to new buildings and the purchase price exceeds 300,000 euros, then you can quickly obtain permanent residence, if the purchase amount is less and it is secondary, then the residence permit will be renewed annually.

It is important for the owner of Cypriot real estate to pay utility bills on time, not to change the facade of the house (if it is a residential complex) and observe the rules for using the common areas of the complex.

Thank you for your help in preparing the material:

Yannis Illiadis, company managerFoutina

Igor Petrenko, the company's expertEmpire Property Cyprus