The property buying process in Cyprus
These guidelines are meant for guidance only and describe a straightforward purchase scenarios. However this information is not meant to replace proper legal advice, which we always insist you take.
EU nationals who are resident in Cyprus may own as much property as they wish. Non-resident EU nationals may own as much land as they wish, but if they wish to buy any other sort of property, ownership is restricted to one house or one apartment for which approval from the ‘Council of Ministers’ is needed. Regardless of their residency status, nationals of non-EU countries must seek the approval of the Council of Ministers before they can own any type of immovable property.
Steps in buying Property in Cyprus
The property buying process in Cyprus is simple and straightforward. Once an investor has located the ideal property to meet his investment requirements buying process is different in Southern and Northern Cyprus.
Southern Cyprus
1. Reservation Deposit Agreement - The first step is the signing of the Reservation Deposit Agreement. This takes the property off the market for a specified period of usually one month.
Within this reservation period, the appointed lawyer will carry out required investigations at the District Land Registry to ensure that the vendor of the property is indeed the owner and ensures that the purchaser obtains good title to the property.
In Cyprus the reservation amount is usually at 1% of the property price. The reservation deposit will be “subject to contract” i.e. it is non-refundable, but it is returnable if the searches are not successful.
Searches before Exchange of Contracts:
2. Planning Department Search - This ensures a building permit exists and that the developer can legally build and sell to other entities.
3. A company search - A detailed company search demonstrates that the developer has the legal capacity to enter into contracts of sale, and that it is not been served a liquidation order.
4. Signing the Contract of Sale - Once all searches have been successful the next step is the signing of the Contract of Sale by both the vendor and the purchaser. This is similar to the English term, "Exchange of Contracts". Upon signing the contract of sale, the purchaser has a 6 weeks period to pay the first installment to the vendor. If the purchaser fails to do so, then the contact can become null and void.
5. Possession of the Property - Possession of the property will only be completed when it is actually delivered to the purchaser. At this stage the purchaser pays for all the utilities to be connected and he establishes all rights in this country, such as: residence, tax, driving, duty-free and domicile.
6. Transfer of Title Deeds - If the property title already exists, then both parties immediately proceed to the transfer of title deeds procedure for the new owners and pay the remaining amount owed. If the property is new, then the title will take up to three years to be issued by the official authority. In this case the remaining amount owed is repaid to the vendor with the delivery of the property. During that time, legal security to the purchaser is provided when a valid contract is signed, stamped and registered with the land registry.
7. Property Taxes, Fees and Rates - Real Estate transfer taxes are paid once to the Land Registry and are necessary in order to transfer freehold ownership to the name of the purchaser. The transferee is responsible for the tax payment.
Northern Cyprus
To purchase a property in northern Cyprus, the process is similar to that of southern Cyprus. However, there are a number of checks carried out by the Ministry of Interior and this will inevitably mean the sale will take approximately app. 4-8 months to be completed.
The process for buying any freehold property:
1. Secure property and agree the price.
2. Contract drawn up by solicitor, setting down the terms of sale, ie. price, time scale, vendor, purchaser and any special conditions.
3. Vendor and purchaser sign the contract
4. Purchaser provides 10-20% deposit, pending legal checks on the property.
5. Solicitor applies for a Purchase Permit from the Council of Ministers, (takes app. 4 to 8 months).
6. As soon as the purchase permit is received, the remaining balance remains due from purchaser.
7. The purchaser pays the balance and the vendor signs title deed into the name of the purchaser.
8. Sale is completed.