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.
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
CYPRUS
