As in any island country, the landprice is very expensive in Cyprus.
There is not much of it, and if its owner is diligent, it brings them a lot of fruit. Both literally and figuratively.
For thousands of years, Cypriots have been brought up with a very reverent attitude to land, to the "ancestral roots". The land was revered as the most valuable family property.
Probably, it is based on these ancient traditions that laws concerning the purchase and sale of land are developed and adopted especially carefully. Let's not forget that thanks to the island's property market (and, in turn, thanks to the closed Citizenship by Investment program), Cyprus was able to patch up the holes in the budget after the big haircut.
The country has a land code that reliably protects the owner from any encroachments. The Cypriot Government has repeatedly reaffirmed its commitment to the policy of maintaining a favorable investment climate. Local legislation reliably protects the investor already at the stage of buying real estate. In order for the buyer to best meet their interests, it is necessary to adhere to a certain strategy.
What steps should be taken to protect future owners when buying real estate:
- Check the status of real estate in the Land Registry to make sure that this property is not subject to bank collateral or other obligations that may prevent the transfer of ownership rights to the buyer. You should also check the availability and correctness of permits for the development of project documentation and construction. Their absence or incorrect filling will not allow you to obtain a certificate of ownership.
- Check the financial viability of the seller through the Registrar of Companies, which will also help to avoid various unpleasant surprises.
- Draw up and sign a contract of sale, after making sure that the real estate object can really be sold, and the ownership right is transferred to the buyer, you can proceed to drawing up a contract of sale. It is better to do this together with a lawyer.
- Pay stamp duties. This is a necessary condition for the registration of the contract of sale in the Land Registry. It is paid in the process of legalizing the transaction to the Inland Revenue Department.
- Register the contract of sale at the district office of the Land Cadaster. This must be done within 60 days from the date of its signing. The procedure ensures that the contract cannot be canceled by anyone other than the buyer. Thus, the real estate object cannot be re-sold, leased or mortgaged.
- Apply for title deeds— certificate of ownership of immovable property in Cyprus. Foreign buyers of real estate can issue a "title" only after the approval of the purchase by the Council of Ministers of Cyprus. For the transfer of ownership rights in the name of the buyer, the Land Registry charges a one-time fee of 3% of the amount up to 85.430 euros; 5% of the amount from 85.431 euros to 170.860 euros; and 8% of the amount over 170.860 euros.
After all the above procedures, the ownership document issued to the buyer is registered in the state archive. The information stored in the archive is confidential, and access to it is provided only in special cases.
What statuses can a property owner have in Cyprus?
There are three real estate owner statuses in Cyprus:
After signing the contract of sale of real estate and paying at least 30% of its value, the contract is deposited with the government authority - Land District Office. As a result, you become the owner of the property (Owner).
The essence of the procedure is that the state registrar draws up and fixes the current status of real estate. Starting from this moment, only the buyer can get, in particular, a bank loan secured by this property, and the seller will no longer be able to do this, since the first right of claim now belongs to the buyer. Simultaneously with the deposit, stamp duty is paid.
The actual owner of the property
After full payment of the real estate and signing of the Act of acceptance and transfer, the owner receives the keys to the purchased real estate and becomes the actual owner who physically owns this property and can live in it.
Registered property owner
This status is obtained after the registration of the title deeds for the purchased property and its transfer to the name of the new owner. This is an "armor-piercing paper", a document that provides unconditional ownership of real estate. No one, ever, under any circumstances, will be able to challenge it.
The disadvantage is that obtaining a "title" is a lengthy bureaucratic procedure that can take 1-3 years. However, it is the long and thorough state verification of the correctness of all aspects related to construction that makes the title deeds a document that inviolably guarantees your rights as an owner.
It is worth noting that thanks to the amendments made to the Cypriot legislation in recent years, the rights of real estate buyers without a title have become reliably protected.
It should be noted that some foreign buyers, when purchasing real estate, deliberately do not issue title deeds. There may be two reasons for this:
- A non EU/EEA citizen can get title deeds for only one real estate object. At the same time, the legislation does not limit the number of purchase and sale agreements that a foreigner has the right to conclude.
- The state fee that must be paid when registering title deeds is quite large, and it is more profitable for an investor to purchase real estate by spending as little money as possible.
However, this is a dubious economy and it is more than repaid by the advantages that the title gives. Meanwhile, restrictions on the purchase of real estate can be circumvented if desired.
The fact is that the restriction applies only to individuals and does not apply to firms. Therefore, an investor who is not an EU/EEA citizen and intends to invest in a number of facilities can register a company through which transactions will be carried out.
In order to protect yourself when buying Cypriot real estate, it is better to turn to professionals. The activities of realtors in Cyprus are regulated by law and licensed by the Council for the Registration of Real Estate Agents. We recommend that you contact the top real estate agency in Cyprus - DOM, with the largest real estate catalog on the whole island.
Have you decided to buy an apartment or a house in Cyprus? Contact DOM! The website offers a huge selection of real estate —residential and commercial. Experienced brokers will be happy to help you make the right choice.
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