How to buy a property in Cyprus

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Buying a home abroad is something most of us dream about – the different way of life overseas being the main attraction. It is said that 100,000 Brits plan to buy a property somewhere abroad within the next six months or so, and many are choosing to buy property in Cyprus. What attracts British property investors to buy in Cyprus is sunshine that is guaranteed nearly all year round, the fact that 90% of the population in Cyprus speaks English, the low crime rate and the low cost of living in Cyprus, and, of course, the slow and relaxed Cyprus pace of life.

Buying a property in Cyprus gives you the opportunity to abandon ship in the UK and relocate to a sunnier, warmer, more relaxed environment. Buying a property in Cyprus is relatively easy; a non-Cypriot can buy for their own personal use either an apartment, a house, a villa or a piece of land, and the maximum allowed area for purchase is 4,013 sq.m, although in certain circumstances this can be exceeded.

As a matter of course, permission for the transfer of property in Cyprus to a non-Cypriot must be sought from the Cyprus Council of Ministers, normally a formality; while waiting, the buyer can take possession of the property. The application to the ministers can be made within a reasonable amount of time after the contract of sale has been agreed. In Cyprus, real estate transfer taxes are payable in order to transfer freehold property ownership into the name of the buyer; this is done when the authorities have issued the title deed for the property and the purchase has been completed.

Costs and procedures when buying property in Cyprus

The typical fees for buying property in Cyprus are on a graduated scale.

  • up to €85,430 - 3% transfer fee
  • €85,431 to €170,860 - 5% transfer fee
  • over €170,860 - 8% transfer fee

For example, if the price to buy the Cyprus property is €153,774, the first €85,430 will be at 3% (€2,563) and the next €68,344 will be at 5% (€3,417), making the total fees payable €5,980.

Stamp duty when buying property in Cyprus applies after the contract has been signed. This is currently set at 1.5% for each €1,708 up to €170,860. Above this it is 2% for each €1,708.

There is a further annual tax on Cyprus property, the Immovable Property Tax, an annual tax based on the value of the property. The rates are as follows:

  • up to €170,860 - exempt
  • €170,861 to €427,150 - 2% IPT payable
  • €427,150 to €854,300 - 3% IPT payable
  • over €854,300 - 3.5% IPT payable

Acquiring the title deed for a property in Cyprus is a simple procedure of transfer of ownership from vendor to buyer, and this is done through the Cyprus Land Registry Office. In the case of a non Cypriot, a prerequisite of registration is proof that the property has been paid for with foreign exchange.

When someone buys a property under construction, especially an apartment, there is probably no title deed in existence for the building yet. It is important in this case to have a lawyer, and you should consider this and include it in the contract of purchase. When negotiating the contract, the lawyer should be present at all times to safeguard your interests.

The legal fee usually charged by a lawyer when you buy a property in Cyprus is approximately €850, and this fee will cover management of the sale and general agreement, regulating the use of common areas if it applies, and submission to the land registry.

Should you buy property in Cyprus directly from a developer, or is it better to buy through an agent?

One of the most important decisions you will make before deciding which property you wish to buy is actually who you want to buy your property from. Do you want to buy a property in Cyprus directly from the developer, or do you want to buy through an agent?

It is a common misconception that buying through an agent is more expensive. It isn't. With any reputable agent there are contracts in place with developers to ensure that 'double pricing' doesn't happen. And in some cases your agent may be able to obtain a discount for you - if an agent is providing a developer with lots of business, that agent is in a strong position to negotiate on your behalf.

Some of the difficulties that can arise from buying property in Cyprus directly from a developer are obvious things like language barriers, time differences and possibly your poor understanding of the property buying procedures in Cyprus. If you can't communicate to your builder effectively, should jobs need changing or revisiting then you will find yourself in a situation with no immediate remedy, and if the message is not communicated properly then the chances are that what you are asking for won't get done.

On the other hand, when buying property in Cyprus through an agent, the agent has the ability and expertise to ensure the property has been properly 'snagged' before you move in, i.e. your agent is there to ensure that every job has been completed to the highest standard, even small things like an off-centre light switch perhaps.

So by buying Cyprus property through an agent you can be sure that your home has been completed to your specifications.

Here is another advantage to buying a property in Cyprus through a reputable agent. Should you choose to buy directly from a developer, then during the building stage of your property you will need to take into consideration the costs of visiting during the build to inspect the work and to keep on top of any problems that may arise. But when buying property in Cyprus through an agent, if you find that you are not able to go out on an inspection trip then it will be possible for the agent to get photos of the work sent over so that you are constantly kept up to date with the progression of the build.

And will a developer offer you choice and after sales service?

Choosing which area of Cyprus you want to live in is a big decision. A developer will almost certainly want you to buy a property in a particular project, and will say anything to convince you that its build is the best around, that this is the area you must live in. Whereas an agent can offer you unbiased information on the best areas of Cyprus and best current property deals in Cyprus.

Agents will have hundreds of developers listed with them, so their advice really is impartial – if an agent does not think a development is what you are looking for, the agent will move on to the next one... and so on, until your search criteria has been satisfied. A developer, however, will want to show you only its own builds.

Many agents have web sites where you can check what property in Cyprus is on offer at your own leisure, and although web sites won't show you all of the properties for sale, an agent's web site will give you an excellent idea of the types of properties on offer. On the other hand, it is rare for a developer to advertise on its web site (if it has one) other properties for price comparison in the same area, the developer will want to feature only its properties.

Once you have completed a purchase through a developer after sales care may not be offered because, as soon as the developer has your money in its pocket, should anything go wrong you won't have any negotiating power left. An agents, however, will positively want your feedback so that they can then further advise you on your options and, should serious problems occur, also warn others of this developer.

An agent is there to look at things for you from your point of view. A developer, unfortunately, cannot make the same claim.

If you do choose to go down the route of buying directly from a developer, think about getting guarantees of the builder's financial status written into your contracts, and also seek out legally binding guarantees covering the structure of the building for 5 or 10 years if the building is an off plan development, to cover such things as subsidence as the property settles into its foundations.

Naturally, an agent will have already seen examples of the developer's work before choosing to represent that developer, so in this respect, buy buying a property in Cyprus through an agent you can be sure of the quality and status of the builds before you invest.

In conclusion, making the decision to buy a property in Cyprus is one that needs a lot of thought and consideration, it should not be made on a whim. There are many, many people every year who choose to relocate or invest in Cyprus property; if done properly it can be a very worthwhile investment and can lead to a happier and more relaxed way of life.

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