How to buy a property
In order to buy a property in Cyprus the procedure is as below:
1. Choice of property
Whether you are deciding to purchase for investment, relocate to Cyprus, or are looking to acquire Permanent Residency through the purchase of real estate, careful and considerate planning is essential to ensure that you choose the right property for the right reasons.If you like one or more items from our projects, viewing of properties and locations can be arranged and we are happy to show you the highlights of the local area in order for you to get a better feel for the location you wish to purchase in.The duration of the tour will be at least 3 – 5 days, during which you will personally inspect the properties and experience the benefits of the Cyprus lifestyle. During the tour, you will be accompanied by a representative of our company who speaks your language.
2. Preliminary agreement
After selecting a property, you should sign a preliminary agreement and pay a deposit to reserve the chosen property. The preliminary agreement is usually called a reservation agreement. Upon signing the reservation agreement, the property is taken off the market for conducting a legal check and agreeing about the terms of the deal. For this purpose, the buyer has to appoint a certified lawyer who will act on his behalf and will study the property from the legal point of view as well as recommend an appropriate version of the sales contract protecting the interests of the buyer to a maximum. Reservation deposits vary depending on the price of the property and are normally 1-2% of the purchasing price.
3. Opening bank account
On the same day, the buyer is recommended to open an account in a Cypriot bank for making the payments to the seller. Your lawyer would normally assist you in this matter.
4. Contract of sale
Once all the preliminary steps above are made, the buyer and the seller sign a contract of sale. Upon signing the contract, the lawyer applies to the so-called Council of Ministers to obtain a permit to purchase the property (it’s required for non-Cypriot buyers and normally is a simple formality).
5. Registration of contract of sale in the land registry
As the next step, the lawyer submits the contract to the District Lands Office to register the purchase. The Lands Office stamps the contract and records it in the Land Registry. This secures the buyer’s ownership rights until a separate title deed is issued (see Paragraph 7).
6. Settlement with the seller
The payment for the property can be conducted directly to the Seller’s account but for off-plan properties we strongly recommend to use so-called ESCROW accounts which offer a more secured way of payment at which the seller gets payments by tranches, as and only if the construction progresses. Most lawyers in Cyprus offer ESCROW account services.
7. Transfer of title deed
If the seller has got a title deed (ownership certificate) for the property, the transfer of the title deed on the name of the new owner can be done immediately. Typically, this is the case when buying a resale. If the property is brand new, in most cases the seller (developer) doesn’t have a separate title deed for the property and the buyer may end up having to wait some months before it’s issued. Until that time, the ownership rights of the buyer are guaranteed by the registration of the sales contract at the Lands Office (see Paragraph 5). The application to the Lands Office to obtain the title deed is also done by the lawyer.
Extra tip
When doing the legal check of the property you purchase, your lawyer has to investigate if there are any mortgages on the property and if there are it’s a must that your lawyer arranges for the so-called waiver which is a very important document that makes your sales contract prevail any existing liabilities of the seller to the bank with regards to the property.
This document is crucial to guarantee that your property wouldn’t be seized by the bank should the seller go insolvent.
In case your case qualifies for a VAT refund, your lawyer can deal with it.
In case you want to get a permanent residency, our company is able to assist you with this procedure as well.
