The Buying Process & Legal Information

Step One

Reservation Agreement

The prospective buyer has 2 options when they decide to purchase property in Cyprus.These are either to sign a Reservation Agreement (Option to Buy) or sign directly the Contract of Sale.

This will take the property off the market for (usually) one month also secure the price on the property.

During this holding period, the solicitor acting on behalf of the purchaser will carry out all necessary searches at the District Land Registry Office to ensure that the vendor of the property is indeed the owner and the purchaser obtains good title to the property.

The reservation fee is usually 1% of the sale price or at least Euro 1708.60 /CY £1000 / The reservation fee is “subject to contract”

i.e. it is non-refundable, except if the searches carried out by the solicitor are not successful.Please see below.

Searches required before Exchange of Contracts include

1) Land Registry Search

A search with the Land registry office will be carried out to ensure that the seller has a valid title to the property and that the property is mortgage free.For "under construction" properties a check should be carried out to clarify that the planning and building permits can be obtained and that separate title deeds can be issued.

2) Company Search

A detailed company search demonstrates that the developer/vendor has the legal capacity to enter into a contract of sale, and has not been served a liquidation order.

Step Two

Signing the Contract of Sale

Once it is confirmed that the searches are successful the next step in the buying process is signing the Contract of Sale, by the vendor and the purchaser. This is similar to the English Term, "Exchange of Contracts".

Upon signing the Contract of Sale, the purchaser(s) has a grace period of one month to pay the first installment to the vendor. If the purchaser fails to do that, then the contract will be considered null and void and the reservation fee is not refundable by the vendor.

Once the Contract of Sale is signed by both the vendor and the purchaser, the stamp duty has to be paid at the rate of Euro 2.56 / CYP1.50 per Euro 1708.60 / thousand pounds upto Euro 170860.14 /CYP100,000 and thereafter at Euro 3.42 / CYP 2.00 per Euro 1708.60 / thousand pounds.This should be paid within 30 days of signing the contract.

Once the stamp duty is paid, the stamped copy of the Contract of Sale is lodged at the Land Registry Office (by the purchaser’s solicitor) within 60 days from the date the contract was signed.Lodging the Contract of Sale at the Land Registry Office safeguards purchaser's interests in the property.

This means that the purchaser can at anytime use the Contract of Sale for specific performance purposes, as the property is considered to be (at least legally) the purchaser’s property from the moment the Contract of Sale is deposited at the Lands Registry Office.

Should the vendor have the title deeds in hand then the transfer of the title deeds to the purchaser takes place as set out in the Contract of Sale.

It is quite common in Cyprus for title deeds to be issued upto 5 years after signing the Contract of Sale and if the whole amount of the purchase price has been paid to the vendor,then the transfer of title deeds is done as soon as they are issued.

During the interim period between depositing the Contract of Sale at the Land Registry Office and transferring the title deeds to the purchaser’s name, the property is legally owned by the purchaser.

Step 3

Possession of the property

The purchaser takes possession of the property once it has been "delivered" by the vendor.As from the delivery,date the purchaser pays for all utilities to be connected.In addition it is advisable to take out insurance for the property and its contents.

Step 4

Transfer of title deeds.

If the property already has title deeds, then both parties proceed with transferring the title deeds to the new owner, providing that the purchase price is paid in full. If the purchased property is new, then the title deeds may take upto five years to be issued.

This period of approximately five years is standard procedure, especially if the purchased property is on a complex or is part of a large project meaning that separate title deeds have to be issued for each individual unit.

Fees are payable on the issuance of the title deeds and are calculated on a graduated scale depending on the value of the property.Upto Euro 85430.07 /CYP 50,000 - 3%, from Euro 85430.07/CYP 50,000 to Euro 170860.14/CYP 100,000 - 5%, over Euro 170860.14/ CYP100,000 - 8%. However should the property be purchased in joint names (for properties over Euro 170860.14 / CYP50,000)the effective value for calculation is halved.

Important Information

Non-EU citizens require permission from the Council of Ministers to buy property in Cyprus, and this can be applied for anytime after signing the Contract of Sale. It normally takes between 6 to 8 months to be granted and issued.Applying to the Council of Ministers is usually done by solicitor.Once permission is granted they must proove that the purchase consideration is from foreign currency.

In order to apply for the above permission, two reference letters are needed:

a) From a person in a position of authority from the applicant's country, preferably a solicitor or an accountant certifying his good character and clearance from the police confirming the applicant does not have a criminal record.

b) From a financial institution (bank or building society) as to the applicant’s good financial standing.

The above two certificates should be acquired by the applicant in his home country and sent as quickly as possible. These two documents are attached to the application.

Permission is given for one property per family.

Since Cyprus joined Europe on 1st May 2004 any European citizen can freely acquire any number of immovable properties, as all previous restrictions have been lifted.

All payments should be effected through official channels (Banks) and preferably through the purchaser’s solicitor’s clients’ account.

All properties in Cyprus are freehold.

The legal system in Cyprus is based largely on the British system having provisions to safeguard and protect the purchaser's rights.