Purchase a Property in CyprusUpdated on Tuesday 22nd September 2015
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The real estate market in Cyprus
Until 2004 when Cyprus became an European Union member state, restrictions on real estate property purchases were enabled for foreigners. These restrictions mostly referred to the size of the land plot allowed to be owned by foreign investors. However, realizing the great investment opportunities the Cypriot real estate market provides, the government has started to remove these restrictions.
Real estate due diligence in Cyprus
In order to make sure the purchase process of the property will not be delayed by any legal issues, the buyer is advised to appeal to a Cypriot law firm for real estate due diligence. Our law firm can verify the property for encumbrances such as mortgages or any other financial debts such as utility bills. The lawyers can also perform a verification of the real estate with the Cypriot Land Registry that can provide valuable information about the property title. The buyer is also advised to verify the reputation of the seller and if any lease contracts or titles in favor of third parties have been concluded.
The procedure to purchase a property in Cyprus
Once the foreign buyer has found the right Cypriot property he or she must file an application with the Council of Ministers for the acquisition of the real estate. This measure does not apply for resident buyers. Then the buyer must pay a reservation fee that ranges between 1000 and 5000 euros depending on the value of the property and a reservation contract will be signed. The contract will contain the terms and conditions of the sale and another 10% of the property’s value must be paid within two or three week. After this time, the purchase-sale contract is drawn up and signed by both seller and buyer and it must be submitted with the Land Registry in Cyprus within 60 days. The buyer will be required to present a bank reference and a final completion certificate from the local authorities in order to receive the new property title from the Land Register.
Property purchase costs in Cyprus
When acquiring real estate in Cyprus, the buyer must also consider the additional costs of the purchase. These include a stamp duty that varies between 0.15 and 0.2% depending on the value of the property and the transfer fee that is set at 3, 5 and 8% depending on the property’s value. New buildings that have a Town Planning Permit are charged with the 19% VAT rate.