Are you looking to buy a beautiful property in Cyprus? Well, that’s the very first step towards achieving your dreams – the intention. You now need to get the ball rolling. But what should be your next step – you might wonder? In this article, we will explain the whole property buying process in Cyprus and what to expect.
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Property agents in Cyprus
There are hundreds of property agents across the country, from Peyla and Paphos in the east to Limassol and Larnaca in the west, not to mention the capital Nicosia. All these agents will have an amazing portfolio of properties to show you. All you need to do is to have a clear idea of what it is you want in terms of the budget as well as your desired location. With this information, the agents will help you find the best possible deal.
After deciding on the location and the agent to guide you through the process, it’s time for them to show you as many properties as possible. This way, you will get a good feel of the area you are about to settle in. When viewing the properties, prepare to ask as many questions as possible. For example, what are the water shortages like? Does the property have any loans? Does it have a regular supply of power? Or, are there any restrictions just in case you decide to rent the property out? With all these questions answered, you will be able to make a much more informed decision on whether to buy or pass on that property.
What’s more, if after getting the property you want, you are considering renovations, the agent should be able to recommend you to reputable professionals, and should also give their thoughts on the additional costs.
Get a lawyer
In a property transaction, it is imperative that you hire a lawyer to help you through all the complex legal matters. The lawyer has to be a member of the Cyprus Bar Association, and if you are from an English speaking nation, getting a lawyer that speaks English would be necessary. With such a lawyer, you will be able to save plenty of unnecessary troubles and the buying process will be smooth.
The buying process
Step one – once you get a property that completely satisfies your needs, and you are absolutely sure of it, then it’s time to place a bid. When the bid is accepted, the property agent takes it off the market for a period of one month. To show your commitment to buying the property, you might be asked to sign a reservation agreement and also put down a small deposit. But before signing anything or sending any money, you need to consult your lawyer. The deposit might only be a small percentage of the total cost of the property, but you will need to know the circumstances under which the amount will be refunded if the deal falls through.
Step two – at this stage, the lawyer conducts various searches and checks all the relevant paperwork. One of the most critical aspects at this stage is about title deeds and ownership of the property, which is kind of a vexed issue in Cyprus. This is one of the main reasons why you need a lawyer in the first place, as he or she will analyse all the documents to determine the rightful ownership of the property. The lawyer will also check to see if there are any loans associated with the property or any other exemptions that could hinder the purchase. And if it is a new property, it is the responsibility of the lawyer to determine whether the construction followed due process and if it obtained all the necessary permission from the local authorities.
Step three – if there are no issues from the research, then the lawyer will draft a property sale contract that all the parties involved in the transaction shall agree to. The agreement needs to be registered and stamped by the Lands Office. This contract ensures that the seller won’t attempt to sell the property to someone else and also prevents them from using the property in question as security for a loan or mortgage. Basically, it protects the buyer before everything is formalized and the deeds registered in his or her name. What’s more, at this stage, you will be required to transfer an agreed-upon portion of the payment. Keep in mind that due to currency movements, you ought to protect yourself at this stage, as it is very possible that by the time you are finishing up the payment, it becomes way above the amount you last left. So, you need to consult your banker on how you could protect yourself from the exchange risk.
Step four – at this stage, the lawyer writes to the Council of Ministers, requesting the acquisition of the entire property. This is to guarantee you that you won’t have any legal issues in terms of the ownership of the property. It is also at this stage where the reduced VAT is accounted for, and after everything has been approved, any balances remaining should be cleared.
Stage five – this is the final stage where the title deeds are obtained from the regional land chamber, where both the seller and the buyer are present. At this stage, the registration fees, as well as the property tax, should be paid, and receipts proving the same obtained. Also, title deed transfer fees have to be paid, and after that, you will become the new owner of the property.
Please note: other than the agreed purchase price, there are several other extra costs that you should take into account. They include: land registry fees, legal fees, local property tax, property transfer fees, stamp duty value-added tax, sales agent fees as well as property insurance. These fees vary from time to time, and so it is very important that you find out from your lawyer and sales agent about each and every extra cost that you may incur. Since Cyprus is one of the most affordable property markets in Europe, the fees are relatively low as they are about 15% of the purchase price.