Many people have a desire to own their own house in the sun, and Cyprus is the ideal place to realize this ambition. However, it takes planning and investigation to purchase a home in Cyprus. All issues relating to property registration are governed by the Immovable Property (Tenure Registration, Registration, and Valuation) Law, Cap.224. There are no restrictions on the acquisition of property for EEA and EU nationals. Similar holds for organizations with workplaces in Cyprus or some other part of the EU. After receiving the Council of Ministers’ permission and executing a Sale Agreement, non-EU nationals are also permitted to acquire real estate in Cyprus.
Costs and expenses related to buying a home in Cyprus
A home purchase may be a significant financial and time investment that calls for careful preparation. The buyer often bears the following expenditures associated with the purchasing process:
Stamp duty
Stamp duty needs to be applied to properly complete property acquisition agreements. The District Inland Revenue Departments accept stamp duty payments. If you are selling a property for less than €5,000, there is no stamp duty to pay. Stamp duties are determined at 0.15% of the Purchase Price for purchases up to €170,860. 0.20% of stamp duty is applied on properties worth more than €170,860.
Deposits for the sale agreement
When submitting the Sale Agreement with the Land Registry Office, a fixed fee of €50 is due to the District Land Registry Office.
Fees associated with title deed issuing and land registry transfers
When the title deed to the Property is changed to the Purchaser’s name, transfer costs must be paid by the Purchaser directly to the District Land Registry Office. Instead of using the Purchase Price, they are determined using the property’s market value as recorded by the Land Registry. When buying a property that contains VAT, transfer fees are not necessary (though they could be if the purchase price is less than the property’s true worth). According to the rules in effect, they are decreased by 50% and computed using the percentages below:
- Real estate worth up to €85 – 3%
- more than €85 to €170, less than 5%
- Over €170 – 8%
VAT
Cyprus now has a 19% VAT rate. Newly constructed residential, commercial, and undeveloped property parcels are normally subject to VAT (some exclusions may apply). If the property serves as the purchaser’s primary and initial home, they may be eligible for a reduced 5% VAT rate on the first 200 m2 of the property. The VAT Authorities must receive a special application.
Fees charged by real estate agents
A real estate agent could be involved in a transaction. Cyprus’ realtors frequently request 5% of the price tag in return for their administrations. This payment is made by either the seller or the purchaser, contingent upon the circumstance.
Mortgages available to non-Cypriots
Cyprus has a free housing market. Mortgages may be given to EU and non-EU citizens to buy a home in Cyprus. When all the necessary evidence is submitted to the Bank, the mortgage application process typically takes 1-3 months to get loan approval.
Locating real estate to purchase in Cyprus
Before choosing, you must do considerable study on the real estate market. This market research might include looking in the local newspaper, speaking with real estate brokers, and checking online. Starting with a list of the qualities and priorities you have for the Property, have the following in mind:
- Real estate/property type.
- Whether a title deed already exists.
- Location and cost.
- Bedrooms and bathrooms present.
- Dedicated parking and storage.
- The property’s age.
Due diligence
Conducting the necessary due diligence before a home acquisition is the most important phase. Cross-checking if the property is free of any liens, has a clear title, and conforms with all applicable construction and planning regulations is essential. The issuing and transfer of the relevant title deed may be hampered by burdens on the property and any non-compliance problems. Conducting a due diligence investigation on the possible Seller is crucial as well.
Real estate transaction negotiations
It’s recommended to seek legal advice when finalizing the Sale Agreement and payment method, after completing due diligence and agreeing on the purchase price. It is necessary to create, examine, and negotiate the Sale Agreement’s provisions with the Seller or the Seller’s legal counsel. For maximum protection of your rights as a buyer, ensure the Sale Agreement is finalized, apply the necessary stamp duty, and file the mentioned Agreement with the Land Registry Office.
Transfer of ownership
A Sale Agreement must be properly executed and deposited before the title deed to the Property you bought may be changed into your name. After setting up an appointment and delivering the necessary application and accompanying paperwork to the District Land Registry Office, this transfer is finished. Any unpaid balance of the Purchase Price must be cleared on that day, and transfer fees must be paid to the land registry office. A title deed in the name of the purchaser will subsequently be issued by the Land Registry, transferring ownership of the property.
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