The involvement of an independent lawyer is highly recommended during the property purchase procedure in Cyprus.
The property conveyancing process begins once an offer is made and accepted and lawyers’ details are exchanged. Typically, the vendor’s lawyer will draw up a contract of sale which will be reviewed, and if necessary amended, by your lawyer to protect your interests.
Your lawyer will check the following:
A title search at the district land registry office will establish the property is actually owned by the vendor and whether there is a mortgage, lien or other legal encumbrance
A search at the local town planning office will provide information on the zoning of the area as well as the building capacity and density at the time. This is more applicable for pieces of land.
PLANNING PERMISSION AND BUILDING PERMIT
In case you are interested in buying an asset for which separate title deeds have not been issued yet, this check with the relevant authorities will verify that a planning and building permit exist for the development.
Once your contract of sale is fully executed, four copies are made and stamped at the land registry office. The original will usually be kept by your lawyer and the copies stamped and certified as being true copies of the original.
The buyer must pay stamp duty within 30 days of signing the contract, as follows:
- € 1.50 per thousand euros for values between €5,000- € 170,000
- € 2.00 per thousand euros for amounts over and above €170,000
- No stamp duty is payable on the first €5,000 and a maximum stamp duty of €20,000 applies.
One copy of the contract of sale must be registered with the land registry. This vital procedure protects the buyer, by ensuring that the property cannot be sold to anyone else or used as collateral by the vendor for a new mortgage / loan.
When the asset title deed is available for transfer and your lawyer will inform you accordingly. Lawyers can effect the asset transfer on your behalf pursuant to a power of attorney.
To transfer the deeds of the property into your name a permit from the Council of Ministers is required (applicable only to non-Europeans).
The buyer must pay transfer fees to the land registry in order for the title deed to be transferred. The fees are calculated on the declared sale price as follows:
- 3% - on €0 - € 85,000
- 5% - on € 85,001 - €170,000
- 8% - on €170,000 and over
Where the contract of sale is in joint names, transfer fees are calculated separately for each person i.e. on the value of the property owned by each person.
For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied on the amount shown above.