GUIDE TO BUYING PROPERTY IN CYPRUS By: Danos & Associates

GUIDE TO BUYING PROPERTY IN CYPRUS By: Danos & Associates

Introduction Buying property in Cyprus has always been an attractive investment for foreign people and despite the recent economic crisis, there is still intense interest especially from Russia, Asia and the Middle East. Cyprus is considered one of the safest countries in the EU to invest in because of the constantly growing market and competitive prices which are still much lower than those of other European countries. Furthermore, the high quality of life, the attractive climate and the low cost of living have all played a significant role. All these together with the straightforward property law system which offers a great degree of protection to buyers are many of the reasons why Cyprus is considered to be one of the top property destinations.

Legal representation Although the buyer is not obligated by the law to appoint a lawyer in order to buy a property in Cyprus, it is highly recommended in order for the “would be� buyer to be protected since a lawyer, conducting necessary due diligence, can advise their client in their best interest. Firstly, a lawyer is better acquainted with the procedure that must be followed and secondly, a good lawyer can check the status of the property in order to verify that the property has good title deeds or whether the property has any potential charges and/or encumbrances such as a mortgage or a memo. Thus, is advisable for a purchaser to receive independent legal advice.

Land Registry of Cyprus

The public authority which is responsible for immovable property in Cyprus is the Land Registry of Cyprus which has an accurate system of registered land as all land in Cyprus is computerized and logged into a database. The Land Registry can also provide you with the historical background of the property in question and its status. Thus, in order for a buyer to be certain that the property which they are interested to buy has good titled deeds or if it has any potential charges or mortgages or a memo, it is essential to conduct a search with the Land Registry.

EU and non – EU citizens As Cyprus has been an EU member since 2004, the Cyprus law is harmonised with EU law and EU citizens can purchase immovable property in Cyprus without any restrictions.

Inversely, in order for non – EU citizens to be entitled to purchase property in Cyprus, there is a requirement to obtain permission by the Council of Ministers. However, the procedure is not difficult as the government actively encourages the purchase of immovable property in Cyprus by non – EU citizens. In recent years, the government of Cyprus, in its attempt to attract new investors, has introduced schemes whereby a foreign investor can obtain a Cypriot passport and thus an EU passport with all its advantages, or a permanent residence permit in Cyprus, depending on the amount which was invested in the purchase of the property.

Procedure The first stage of the procedure is usually the property reservation. When both parties agree on the sale price, a reservation agreement is often signed by both parties and a reservation fee is paid by the buyer. It is advisable that a purchaser seeks legal advice before signing a reservation agreement. It is important that a reservation agreement includes the full details of the property, the agreed price and if the VAT is included in it, the reservation amount and whether it is refundable and if it will be subtracted from the final price.

The second stage involves getting in touch with the Land Registry. This stage is absolutely crucial as searching for the property on the Land Registry database will let the buyer know for certain if the property which he/she intends to buy has good title deeds. This is vital to protect the buyer from being burdened and exposed by mortgage or bad debt or any potential charges and/or encumbrances on the property.

After the ascertainment that the property has good title deeds, the third stage is the drafting of the contract of sale. When all terms and conditions of the contract of sale are completed, the parties can sign the contract and then, they can proceed with the payment of the stamp duty at the tax office. When a property has title deeds it is possible to avoid signing a contract of sale.

The seller has the duty to pay all taxes due which are connected with the property in order to obtain discharge from the tax authorities which is necessary before transferring the property. The transfer fees must be paid by the purchaser.

If there is a contract of sale, it must be deposited at the District Land Registry Office within six (6) months from the date of signing the contract. By doing this, the buyer of the property establishes his/her rights to the property meaning that all the rights of the buyer are entirely secured. As a result, the property cannot be sold by the seller to somebody else. Inversely, the buyer and the new owner of the property can sell the property and/or rent it and/or mortgage it.

The same applies even if the buyer does not actually have in his/her possession the title deeds yet. Thus, although buyers may not be registered owners due to the delay in the issuing of titled deeds, they are beneficial owners though and their rights are safe. In essence, the Cyprus law protects the buyer’s ownership rights until the title deeds are issued and transferred to them.

Address: Lawyers in Cyprus Georgiou Seferi 7 Hector Complex 1st floor Office 103 Larnaca Cyprus 7060 35724637773 99130525 info@sedinvest.com