Negotiation and Signing of the Contract
Property in Cyprus is often purchased in the first instance by a Contract of Sale, the terms of which should be negotiated by a lawyer who is experienced in such transactions. A developer may want to use his own sale agreement but this can be modified. Often it is better to start over in order to achieve a contract that will protect the buyer’s interests. Probably the biggest mistake made by buyers in Cyprus, is to sign the developers standard contract without taking legal advice.
Property contract in Cyprus will be first signed by the buyer. Then the developer will sign when the first payment due under the terms of the contact is made. This is equivalent to the “exchange of contracts” stage that UK buyers will be familiar with.
Points to look out for before signing the contract
A general terms of payment unless agreed otherwise or the house is not built yet are:
a. 50% Deposit paid on the signing of contracts.
b. 49% on delivery of property or in stages if under construction.
c. 1% on transfer of title deeds.
1. Purchase of the property is completed when you sign the contracts and paid the agreed deposit. At this point you pay stamp duty (see chart below) at the tax office and deposit your contract with the Land Registry Dept
2. Possession of the property is completed when the property is delivered to you when:
a. The second payment is paid. At this stage you connect the utilities (Water, Electricity & Telephone etc)
3. Transfer of the deeds in your names will be take place when:
a. You have a temporary Residency Permit or Council of Ministers Permit. from the District Office
b. The Developer has completed the subdivision of the project and the Lands Office has issued a separate title.
Your Legal Security is Provided by the Following:
1. You sign a valid contract of sale for property from the seller free of any legal and financial commitments.
2. When the contract is signed, stamped and registered with the Land Office. This procedure prevents the seller or developer from reselling or mortgaging the property before transfer of title.
3. You will be entitled to take possession of the property prior and regardless of when the transfer of title takes place.
Cyprus Stamp Duty
It is recommended that a Purchase Agreement is always stamped for two reasons:
a) The Purchaser may deposit the Purchase Agreement with the Land Registry Office to protect his or her interest. If the Purchase Agreement is not stamped it is not accepted by the Land Registry Office.
b) For the Purchase Agreement to stand as a legal document before Cypriot law.
In Cyprus, stamp duty is due within one month from the time of signing the Purchase Agreement, and is usually paid by the Purchaser.
Cyprus stamp duty is levied at the rate of 0.15% for current property values up to €170,860, and 0.2% for current property market values above €170,861.
Buying Property in the North Cyprus
If you are planning to buy property in the North of Cyprus, then please think again.
The European Court of Human Rights has ruled that any property transactions undertaken by the authorities in the north are considered illegal under international law.
- 92 percent of the legitimate title-deed holders of the north continue to be the Greek
- Cypriot refugees who were forcibly removed in 1974. Accordingly, it is highly likely that the property you will be asked to buy is constructed on Greek Cypriot land.
Under any potential settlement the right to property will be retained by the legitimate owners (Greek Cypriot refugees) as confirmed by the United Nations and as such any illegal purchases will be nullified.
“…you should seek legal advice and be certain that the person from whom you are purchasing the property is the legal owner with pre-1974 provenance.
This is necessary to prevent the possibility of losing your property in the event of a solution to the Cyprus property question.”
British High Commission, Cyprus
We urge you not to engage in any property transaction which will be illegal and will result in you losing your money. For more information please click here.
