Specific steps to buying property in Cyprus
The initial step that a foreign national must take before he or she can
buy property in Cyprus is obtaining approval from the government. Specifically,
a foreign national must require permission to purchase real estate in the country
from the Council of Ministers.
A would-be purchaser of real estate in Cyprus needs to keep in mind that the process
of obtaining approval from the Council of Ministers can take from between eight
to fourteen months. A would-be purchaser also needs to appreciate that if he or
she makes the purchase of real estate without the prior approval of the Council
of Ministers, a title deed will not be able to issue transferring ownership of the
real estate to the foreign national.
While the process of obtaining permission from the Council of Ministers is not a
matter of overnight approval, the process itself is not difficult. The Council has
taken steps to make the process as easy as possible for a foreign national seeking
to purchase real estate in Cyprus. Time consuming in some ways, the application
and approval process is not difficult to maneuver through.
Once approval is obtained from the Council of Ministers, the next step in buying
real estate in the country -- once a piece of real estate has been identified for
purchase -- is signing of the preliminary contract. At the time this agreement is
executed, a holding deposit is posted with either a lawyer or a notary. executed,
a holding deposit is posted with either a lawyer or a notary.
When the holding deposit is paid, a companion reservation deposit agreement also
is executed. In point of fact, it is the deposit and this secondary agreement. The
property is then taking off the market and remains in that position for the time
spelled out in these agreements. Provided that the terms of the preliminary agreement
are satisfied, the property will not return to the marketplace.
The deposit that is lodged in Cyprus normally is as low as 1%. The parties can negotiate
a particular deposit amount -- but, in most instances, the standard deposit is in
the amount of 1% of the overall purchase price of the real estate that is being
sold. The remaining balance due and owing on the overall purchase price will then
be due and owing at the time of the execution of the final contract, which will
be discussed shortly.
During the period of time that follows the execution of the initial, preliminary
agreement, the lawyer who has been appointed to oversee the transaction will investigate
the status of the title the real estate through the District Land Registry Office.
Following this period of investigation into the status of the title, and provided
that the buyer has obtained appropriate financing, the parties move onward to the
execution of a final contract. It is at this juncture that the closing of the real
estate transaction in Cyprus becomes rather complex when contrasted with what occurs
in many other countries around the world.
When the final contract is signed by the parties, the contract itself is filed with
the Land Registry Office to prevent the same piece of real estate from being sold
a second time. An application is then made to the Central Bank of Cyprus to approve
the transfer of funds for the purchase of the real estate. (This approval is not
necessary if both the seller and buyer happen to be foreign nationals. However,
it is required if at least one party to the transaction is a Cypriot.)
The title will be transferred to the buyer at this juncture and the buyer will be
entitled to possession the real estate. It is important to note that if the real
estate is newly developed, the title itself will not issue for upwards to three
years after the signing of the final contract. With that said, the buyer is protected
because of the filing of the final contract with the District Land Registry Office.
There will be some different taxes due and owing -- and paid by the purchaser --
after the signing of the final contract. However, these taxes are not particularly
costly or significant.
Property Abroad always recommends using a
Solicitor or Lawyer
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