Let's start by buying a property that has already been registered as someone's property, that is, it is not completely new.
So, together with the previous owner of the house, you discussed the price and came to an agreement. The first stage of the transaction will be the deposit – a cash deposit in the amount of 2000-3000 Cypriot pounds, which will show the seriousness of your intentions. By making a deposit, you reserve the object for yourself, it will no longer be shown to other customers. In addition, you will have 10-14 days to calmly prepare the funds needed to buy real estate, or take out a loan from a bank.
As a rule, the deposit is transferred to the real estate agency, which has found a suitable option for you. If you change your mind and decide to purchase another home, the money will not be refunded to you.
By the time you make a deposit, you must have signed an agreement with your real estate agency. The document must specify the percentage for intermediary services. Almost all Cypriot agencies work for 5% of the value of the purchased property plus VAT in the amount of 15% of the commission. If you do not sign such an agreement, it will be impossible to prove that the agency provided you with any services. In addition, there may be a hidden increase in commissions.
Don't miss the lawyer
The next very important stage of the purchase should be the choice of a lawyer who will protect your interests and conduct legal support for the transaction. If you do not speak English or Greek, do not skimp on the services of an interpreter - he will be especially useful to you when it comes time to sign a contract. Russian-speaking buyers often do not have a very good idea of what criteria to follow when choosing a lawyer, although it directly depends on how well the purchase and sale agreement will be drawn up and how carefully the purity of the documents will be checked.
You should hire a lawyer only from a serious law firm where at least 10-12 specialists practice. In no case should you work with a single lawyer whose office consists of only one room. The lawyer's business card should say Advocate or Lawyer, you can also deal with those whose specialty is listed as Legal adviser or Legal consultant. However, a notary Public will not be able to really help you in drawing up a contract and verifying the purity of the transaction, although sometimes it takes on such work.
You should give the lawyer clear instructions on what services you need. If you let the matter take its course, you will be charged the same amount as usual – from 400 to 700 Cypriot pounds, and only half of the document verification work will be done. The fact is that the owner of any real estate in Cyprus has a Title deeds, which is an analogue of the Russian certificate of registration of real estate. The lawyer should take a copy of this document and make an official request to the Land Registry Department of the area where you purchase the property to find out if it is under bail. In 2-3 days, he will receive a response on an official letterhead with the seal of the department, which will provide information on bank loans secured by real estate, if any, as well as the data of its current owner.
You may not delve into the details of the work on drafting the purchase and sale agreement, where there are many subtleties, however, after the document is ready, ask the lawyer to explain each point in detail to you. Only after that you can put your signature under the contract.
Final chords
Another important stage is obtaining a purchase permit from the special committee under the Council of Ministers of the Republic of Cyprus (Council of Ministers Permit). According to the legislation, every foreign citizen has the right to acquire private ownership of an apartment, or a house with a plot of land, or just land for subsequent housing construction, but at the same time the land area should not exceed 4,012 sq. m. Most often, permission from the Council of Ministers comes 6 months after submitting an application.
Finally, your lawyer prepared all the papers, you signed them and transferred the agreed amount to the seller. The deal is done. However, the legal procedures have not yet been completed. Within 30 days after the conclusion of the contract of sale, the document must be registered with the Land Department. This procedure protects the rights of the buyer until the title of the owner is obtained, which will have to wait from 6 months to 1.5 years after submitting the documents. The purchase and sale agreement submitted to the department can no longer be cancelled by anyone except the buyer, unless, of course, his financial obligations to the seller have been fulfilled in full. Thus, the seller will no longer be able to rent, resell or mortgage his property.
It is not difficult to make sure that your contract is registered with the Land Department. On the title and last pages of the contract, an employee of the department puts an oval seal with the date of registration. In addition, the first page of the contract indicates the number of the file in which all data about your property is stored.
Immediately after signing the contract, the buyer must also pay a special stamp duty at the Inland Revenue Department. Its size is determined by the value of the purchased property. The first 100,000 Cypriot pounds in the value of the property are taxed at a rate of 1.5 pounds for every 1,000. The remaining part of the cost is taxed at the rate of 2 pounds per 1,000. So, if your house costs 150,000 Cypriot pounds, then the stamp duty will be calculated using the formula 100 x 1.5 + 50 x 2 and will be equal to 250 Cypriot pounds.
To meet... in 33 years
The final stage in the process of buying a property in Cyprus is to obtain the title of the owner (Title deeds). As already mentioned, his wait may last up to 1.5 hours – in Cyprus, it is generally accepted to do everything slowly. Still, it is not worth much delay in obtaining a Cypriot certificate of ownership, since if you do not receive it within 33 years from the date of purchase, then by law the property will return to the previous owner. It is important to know that if you have purchased a house with a plot of land, then two titles of the owner should be issued in your name - one for the land, and the second for the apartment building itself.
To obtain the title of the owner, it is necessary to pay a land registration fee, or, in other words, a fee for the transfer of ownership of real estate. As well as stamp duty, it depends on the purchase price and amounts to 3% for real estate values up to 50,000 Cypriot pounds, 5% for values from 50,000 to 100,000 pounds and 8% if the purchase was more expensive than 100,000 pounds. Only after payment of the contribution will the property be registered in your name. From now on, you can dispose of it at your discretion - sell, donate or inherit it.
Buying a new building
There are not many differences between the procedures for buying a home that already has an owner and a property that has not yet been built. The buyer signs a purchase and sale agreement with the developer, thus fixing his future rights. Even before you receive the title of the owner, you can rent the property or sell it, but only with the permission of the developer. For example, in the case of a sale, you will have to introduce a new client to whom you assign your rights.
This type of contract also needs to be registered with the Land Department, this is necessary to protect the rights of the buyer. But the documents for granting the title of the owner can be submitted only after the construction is fully completed, the house is accepted by the State Commission, and the buyer has fulfilled all financial obligations to the developer.
When purchasing an apartment or a house under construction, you will always get a more attractive price. But in this case, you need to instruct a lawyer to thoroughly check how the developer finances the construction. The main thing is that the total amount of loans received by the construction company for this facility does not exceed its market price.
A targeted bank loan issued for the purchase of housing will be able to protect you from rare, but still common scams in the Cypriot construction business. The fact is that when granting a loan, the bank's employees will thoroughly check the object that serves as collateral for the loan. If they have even the slightest doubt that all the documents for the property are drawn up correctly, or if they suspect that the financial condition of the developer's company is shaky, they will refuse you a loan. So a loan is not only a way to reduce your own costs when buying, but also a good safety net. By the way, mortgage loans in Cyprus are issued at very attractive rates – from 5.5% to 7% per annum.
In conclusion, we note that the legal side of the transaction in Cyprus is quite understandable to the Russian buyer. Surely many of the rules and procedures seemed familiar to you – there are many similarities in Russian and Cypriot real estate purchase and sale schemes. So do not give up before the apparent difficulties and do not neglect our tips that will make your dream – a house on Aphrodite Island – real!