Buying a Property in Cyprus

There are many reasons why choose to buy a property in Cyprus and the main ones are the beauty of the island along with the weather and the range of fresh food and lovely places to stay. Many people visit for a few weeks and are so enchanted by it that they end up buying property there, sometimes as a holiday home, and sometimes as a permanent place to live. It is a beautiful place to live and there are lots of areas that are still not developed much, so don’t miss the chance of buying a property that is being sold, or find land that is suitable for building and begin to design the home that will give you so much pleasure in the years to come.

If you are English or speak English well, this is going to be another bonus as it is widely spoken there, and driving should be easy as they also drive on the left. There will be the need to learn their rules as there are differences. Locals are welcoming and friendly, so new comers are going to be well accepted. It is however vital that you settle in and get on with your new countrymen, and accept that they live in a different way from you. If you are used to a friendly Sunday shopping with the family, you need to accept that there are areas of Cyprus where this will not be possible as the shops remain closed on Sunday.

For an idea of what the country has to offer, then Famagusta is the place to go if you want to relax on beautiful beaches. Larnaca is stylish and long walks can be taken along the front, before settling down in a fish restaurant and eating fresh fish and enjoying a stunning view of the Mediterranean. Polis and Latchi are for the visitors who want to relax and enjoy the quiet life and you will find that there is something for everyone to do. As the island is not very big, it can be driven across in a few hours and all it has to offer can be viewed. There are days out that mirror the way that Cypriots have enjoyed themselves for a long time and then water parks for those who look to the present. For all there are hillside trails and ocean walks.

So now that you have found out how much you want to live in Cyprus, you need to find out if you are eligible to buy a property and what you will have to do to get one. If you want property in Southern Cyprus then it should not be very difficult. There is not a lot to do if you are already a European citizen but it could be harder if you are already living outside the EU. In fact, 10 years ago it would have been harder to go through the process, but since Cyprus joined the EU in 2004, they have relaxed the rules and regulations. There is not even the need to get a visa if you are a European citizen, but for others there will be stricter rules. They are becoming more relaxed, but they are still not as lenient as for EU members.

Buying a property is more than just looking at the asking price and wondering if there is any chance of a reduction. There will be the price that you actually agree upon and then there has to be at least another 15% on top of that as there will be bills received from Land Registry as well as Legal fees. If you are given a bill from the Estate agent then this should be queried as they are not meant to make charges to the purchaser as it is the responsibility of the seller to sort that out.

One thing to check is that you have money left after you think you have paid all of the bills, as the Land Registry Department can re-value the house that you have just purchased and you could find that you then have to pay extra tax. If you find the price changes a lot it is possible to make a challenge but the legal fees could add up and even if you win, you could have paid more than if you had just accepted it. When starting ask for a breakdown of what you can expect to be included in the fee that you pay and what is likely to be discounted and paid on a later date.

Unless you see the property you want to buy and it is for sale while you are visiting Cyprus it could be difficult to know where to start looking for your next home or holiday home. If this does not happen, internet will be a good place to start, but it is not always easy to tell if the house is in good condition and you could waste your time on a property that has a lot of work needed. Look for details of the latest properties on the market and then arrange to go and have a good look at them. It will help if you know a surveyor of have friends on the island who do, and they will be able to give you an exact account of any work that needs to be done as well as an idea of what you will have to pay to get the house up to standard.

Understanding the law is going to be one of the hardest parts of the process. You may know the law in your own country through previous purchases made there, but it will be totally different when buying abroad. Before you make any decisions or offers, you should find a lawyer to act on your behalf as this way there will be no mistakes and hopefully no delays. They must be independent as if they have connections to the seller or anyone involved in the transaction, they may not do as good a job for you as they should.

It is important that you are happy with the lawyer you choose and that you are able to communicate at a high level with them. They must be able to make you feel that you can trust them, and there is no need to stay with the first one you find if you don’t think it is a good idea. Make sure that you are singing from the same hymn sheet and while the better lawyers are going to be the most expensive to hire, it is worth the extra that you pay to get the exchange carried out quickly and efficiently. There is no need to use a Cypriot lawyer as you can use one at home and that will certainly keep down costs such as phone calls and visits. It may be that a lawyer in your country is a lot more expensive, but decide if you think it is worth it.

Before coming to a decision about purchasing, you need to know just what you will own when the deal will be done. It is no good if it is just the house, as you will want to know that you are also the owner of the land. If your solicitor has any problems at all when it comes to obtaining the Title Deeds in a reasonable amount of time then there could be a problem. This is the reason why a good lawyer is needed, as there are sometimes problems obtaining deeds and there is uncertainty as to what is actually owned.

It is hard to emphasize enough how important the independence of the lawyer is as there is the risk that the contract will not be drawn up in your best interest. It could give advantages to the seller, the estate agent or in the case of a new property the developer. Once this issue is sorted however, there are few obstacles put in the way of buying the property.

If there are any issues then walk away as you don’t want to get caught up in the legal system. It can cost a lot of money and take a long time to sort the problem out and as there are so many beautiful properties for sale it will make more sense to walk away from one where you think there is something wrong. It may be hard to turn your back on the house, but it will be worth it in the end.

It is not meant to sound as if it is difficult to buy a property in Cyprus as by and large it is easy and there are only few obstacles that will be placed in your way. You also need to be aware that there are people who will tell awful stories about how difficult it is and how things will go terribly wrong if you do not have their help. This is certainly not the case, but the exceptions. As with every country, there will be people who see a way to make money when there is no need for them to get involved.

After selecting the property, the fees will be the next biggest payment you have to make but in reality, they are not excessive. Consider the cost in Euros as this is the currency in Cyprus and it is easy to see what will be needed. Once a lawyer is selected they will likely cost in the region of 1700 Euros and for this money they should carry out the search via the Lands Office, find out if there is anything to be built around the premises and draw up the contracts. If land only is being purchased then there should be a check made to ensure it is legal to build on it. They should stamp and then register the contracts and get permission for the sale to go through from the Council of Ministers.

Next is the surveyor and you should ensure that they are registered with The Cyprus Scientific and Technical Chamber and that they are prepared to let you know what their charges will be in advance. There will be a charge of around 500 Euros for the work of a surveyor and for this they will provide a report on the state of the property including work that needs to be done and any issues that could come up in the near future.

Stamp duty also needs to be paid and this will be required within 30days of you signing the contract. If the property costs less than 170,860 Euros the duty will be 0.5% and for a property that costs more than that, it will be 0.2%. Make sure that you have this money available as it will not look good if you are at the final stage of purchase and suddenly have to delay the proceedings as you have not budgeted properly.

The Council of Ministers needs to agree for a non-Cypriot to purchase a property unless they happen to be a citizen of the EU and are already living in Cyprus with no intention of leaving. Papers need to be taken to the nearest office and there are 5 based across the island in Famagusta, Nicosia, Larnaca, Limassol and Paphos. As previously mentioned, it is the responsibility of the lawyer to do this and the action should be included in the fee. There is nothing to be gained or saved by doing this yourself. Since Cyprus became a member of the EU this is very much just a formality for residents of certain countries and there will rarely be a delay when there is a genuine application made.

Other fees are still to be added and if you are using a mortgage to buy the house there will be a registration fee of 1%. This will be 1% of the amount borrowed not the cost of the house. The down side of Cyprus being in the EU is that there is now the need for them to charge VAT on new properties. If you are a first time buyer it is not too bad as it is just 5% but after that it will be increased to 15%. As with all things legal and financial, this can be subject to change to always check for the latest figures before making a commitment.

There will be a selling agents’ fee but this is going to be paid by the person selling the property and this will sometimes be 3% but it seems that the normal amount charge is 5%. There is another fee and this is one that sometimes gets forgotten about as it does not happen at the time of purchase. It can take place quite a long time afterwards and that is why it is sometimes forgotten about. It is a transfer fee and it will ensure that the property becomes registered in your name. This fee varies and will depend upon the number of people involved in the purchase and also the final cost of the property.

Once the property is your name or your family’s, you will have to pay the end of the tax. IPT which stands for immovable property tax will have to be paid each year, and this is not just by foreigners who have decided to invest in Cyprus, but also for Cypriots. There are various ways to pay and if you find that there is not a title deed to the property you have bought, there could still be the need to pay this IPT, but here it will be to the developer. Once the title deed is issued to you, it is more likely than not that the money will be repaid and it will be the Inland Revenue who are responsible for doing that.

One thing that is certain is that the developer of the property will have to pay IPT and you will end up paying a proportion of that. For many residents the laws have changed and it is less likely that this will need to be paid. The first 170,860 Euros are not covered in this ruling and as the majority of properties are going to cost less than this, the home you purchase will be exempt from IPT. If however you are spending a great deal of money and will end up owning a house that is not far off a palace, you will have to pay the tax.

There are plenty of reasons to buy a property and for people in certain parts of the world a major reason is the fact that they will be covered by the EU citizenship. It does apply to property owners all over the island, but it is worth remembering that there are conditions applied to this. You may have to invest a specific amount of money, and you may have to live in the property for a set amount of time. This is an ideal way to gain EU citizenship, but it is not just the case of buying a house and then getting on with your life until the papers drop through the letter box confirming that you are now an EU citizen.

There should be little holding you back from investing in property and if you are serious about it, Cyprus is an ideal place to go and find a new home or holiday home.