So, you have decided to invest in a property on the beautiful island of Cyprus! After doing your research on the different areas of the island and property types, the next step is to find a professional Cyprus estate agent.
Cyprus Estate Agents
A reputable and established agent will help and advise you through all stages of your purchase and associated legalities. If they are worth their salt, they could also help you save thousands in the process through their knowledge of the local area and amenities, the islands property laws, finance options and purchase procedures.
Your agent should be registered and licensed and offer property services in the specific area of Cyprus you are looking to purchase.
Type of Property Purchase
With a vast choice of different types of property in Cyprus, the purchase procedure will vary depending on the property type you choose to invest in. In most instances you will either purchase an ‘off plan’ property that will be built in stages or a completed property that may or may not yet have title deeds.
When buying ‘off plan’ you will make payments to the project property developer at various pre-agreed stages of the build. New build properties in Cyprus attract a VAT rate of 19%. If it is your first property purchase in Cyprus you will only pay 5% VAT and will not incur a tax on the transfer of your title deeds when they are complete.
Enlist the Services of Cyprus Lawyer Specialising in Property
Whilst a dedicated and knowledgeable estate agent is worth their weight in gold, you must also enlist the services of a reputable Cyprus property lawyer. Your estate agent should be able to recommend a choice of property lawyers that they have personally worked with in the past. A good relationship between your agent and lawyer can be of real benefit in enabling the smooth and timely completion of your purchase.
Conveyancing and legal fees will usually amount to a maximum of 1% of the property purchase price plus VAT.
Once your lawyer has carried out all the essential searches and property checks you will be required to pay a deposit to hold the property and ensure it is not sold to another interested party. The deposit required is usually based on a percentage of the agreed purchase price and is fully refundable should there be any legal issue preventing the property sale from going ahead.
Deposit values for this purpose are usually between €2000 and €10,000 and are paid upon both the vendor and the purchaser signing an agreement which contains terms of the sale of the property, including the agreed purchase price and specifics as to what will be included within the sale. When transferring GBP to Euros for the purpose of paying this deposit or the balance of your property purchase, it is advisable to enlist the services of a currency specialist who will guide you as to the optimum time to make the exchange in line with your property purchase requirements.
Contracts
Both parties’ lawyers will draw up contracts for the purchase agreement which will specify the obligations and rights of both the purchaser and vendor. Upon approval, both parties will sign the contract prior to it being sent for stamp duty which is based on 0.15% of the first €100,000 of the purchase price, increasing to 0.2% of the balance.
Tax Clearance
A certificate of tax clearance will be produced in confirmation that the vendor has honoured any outstanding property or capital gains taxes.
Completion
At the completion stage you may visit personally or, have a person represent you at the Land Registry to pay the balance of the purchase fee. At this point the contract will be deposited or, if available the transfer of the Title deed will take place. (Title Deed transfer tax and/or fees apply).