Cyprus allows Indians to purchase real estate, however, there are certain limitations. They may purchase one property, no more than 4000 m2, which may be an apartment, a house, or a piece of land. The property parcel shouldn’t be larger than 40 acres. The acquisition of commercial real estate is also possible, but only by legal entities based in Cyprus. Here are some tips:
Reservation
You should make a reservation for a property. Normally, your agent or lawyer holds the reservation fee, which may range from €5,000 to €10,000 depending on the purchase price. This charge removes the property from the market and is subtracted from the final purchase price.
Lawyer consultation
Legal services may include due diligence, CoS preparation and/or review, contract negotiation, exchange, and completion, as well as the registration of the CoS at the LRO. They may also encompass representation during the title transfer at the LRO and the application to the Tax Authorities for a reduced VAT rate. Additionally, these services may involve the application to purchase real estate in Cyprus. Legal costs generally vary between €2,000 and €5,000, or 1% of the acquisition price, for due diligence and conveyancing (from contract review through contract completion).
Due diligence
It is very advised to do due diligence before signing a contract. Your attorney will verify the seller’s property ownership and identify any legal obstacles in the LRO that might impede the sale. The attorney might search and confirm the appropriate zone, building capacity, and permitted building density if the property is a piece of land. Your lawyer may check with the appropriate authorities to make sure that the essential planning and construction permissions are in place for properties that do not yet have separate title deeds. Your lawyer may do the necessary search at the Registrar of Companies if the seller is a corporation.
Purchasing and contract negotiations
A CoS is a personal contract between the buyer and the seller. The CoS will normally be made available by the seller for you (and your attorney) to study. On occasion, the CoS may need to be written by the buyer’s attorney. English is used in CoS. If required, your attorney might set up a translation. The buyer is required to pay stamp duty on the contract amount as follows within 30 days after contract signing:
- 0% for the first €5,000
- €5,001 – €170,000 – 0.15%
- Over €170,000 – 0.20%
The maximum amount of stamp duty is €20,000.
Registering the CoS at the LRO
Contracts, when fully signed, stamped, and with the initial payment (typically 30%–40% of the purchase price), may be submitted to the Land Registry Office for “specific performance” within six months). The LRO is effectively informed of the buyer’s information at this point. The “Sale of Immovable Property (Specific Performance) Law” protects the buyer as long as the sale contract remains valid, preventing the seller from reselling, relocating, or encumbering the property. Even before a separate title deed is issued, the buyer may sell his property after this registration.
Permission to purchase real estate in Cyprus
Immovable property may be purchased by Indian nationals, but only with the Council of Ministers’ approval. The application is submitted together with the signed CoS, and permission is normally given within a month. This is mostly a procedural issue. Possession of the property is not contingent upon approval by the Council of Ministers.
Title deed transfer
After the development is finished, the procedure to issue unique title deeds for each unit in the development normally takes a few years. Upon full payment to the seller, settling government fees and taxes, and securing Council of Ministers’ approval if needed, the title deed transfer can proceed at the Land Registry Office. Lawyers may represent purchasers via a Power of Attorney, and the process is straightforward. The following fees are based on the selling price approved by the Department of Land and Surveys:
- First €85,000 – 3%
- €85,001 – €170,000 – 5%
- Over €170,000 – 8%
The overall transfer costs on a transaction may be decreased if a property is purchased under joint names since transfer fees are based on the property’s worth per buyer. Currently, the foregoing prices are reduced by 50%, and transfer costs do not apply to properties subject to VAT.
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