Buying a House or Property in Cyprus.
 
A step-by-step guide to the essential elements in the process of buying a house, villa, apartment or land in Cyprus. With information on finding the property and making an offer, mortgages, surveys and property taxes.

Financing a Property Purchase.
 
If a lender is required, the buyer should establish how much they need and how much they may borrow in order to finance a Cyprus property purchase. Banks are generally cautious (2009), loans are more difficult to obtain, and will only be granted if the property has a title deed or a Bank Guarantee from the developer. Depending on status, the following rates apply. Up to 80% of the property value can be obtained as a loan, with 20% deposit required, assuming that it is by first time buyers on their main residence, and this is obtainable only by permanent Cyprus residents (that is, a person who has been resident in Cyprus for the last five years. Utility bills are required as evidence of this) · Up to 60% is obtainable, with 40% deposit required, for non-permanent residents and people buying holiday homes.  Note 0.5% of the loan value is now charged by the bank or lender for mortgage arrangement fee. The repayment terms also vary, depending on the lender and the buyers individual requirements, but the term can be arranged for as little as 10 years, and in some cases up to a maximum of 30 years.

Selecting the Type of Property and Location.  

Once assurance of a bank loan has been given and a budget has been fixed, the next step is to establish the type of property required and its preferred location. Research can easily done via the Internet but a visit to the desired area is recommended. An estate agent can help with this by showing some properties - this gives a general feel for what a market has to offer. Buying a property with a title deed is always preferable as it is a clear-cut transaction. However, buying without a deed, or even from plan is fine, providing the deal is done properly (buying property in Cyprus is relatively a very safe investment, as long as professional advice is followed correctly). There is also an advantage to buying off-plan as stage payments usually apply.

Estate Agent.
 
It is important that a purchaser deals with a registered agent only. By law, a registered agent carries an insurance policy to indemnify any wrong doings, and follows a national code of conduct - this assurance is only available with registered agents. It is illegal in Cyprus for anyone who is not licensed and registered to operate as an estate agent, a buyer should request evidence of registration when enquiring about property. Legal estate agents are members the Cyprus Real Estate Agents Association, CREAA.

Reservation Fee.

Once a property has been selected, and an offer accepted, a small holding-deposit (or reservation fee ) is paid. The seller should then provide the necessary paperwork for the property - title deed, architectural plans and other relevant documents - to the lender and agent. On the buyers instruction, the lender begins the mortgage process which usually takes three to four weeks, and the agent will, if you choose to use a lawyer, co-operate with him/her in the Land Registry search, etc, and preparation of sales contracts. If you decide not to use a lawyer, a registered agent is qualified to do this for you.

Lawyers.

Lawyers fees vary from office to office but are generally charged by the hour, and of course the work involved. Buyers are advised to ask for an approximate figure before instructing a lawyer as it can be fairly costly. 

Contracts.

If either buyer or seller is not Cypriot, the contract can/should be in English. Once it is prepared, and the deposit (usually between 20 and 30 percent of the purchase price) is in place, the parties can sign. This contract contains a clause that determines a completion date, usually within 28 days, and completion must be made by this date, otherwise the deposit can be lost and the purchase cancelled. Note -The contract is legally binding - there are no let-out clauses. Stamp duty must then be paid by the buyer for the contract. This starts at 0.15 percent of the purchase price, and the contract should then be deposited as soon as possible at the Land Registry Department, for specific performance. This is essential as it officially commits both parties to the transaction. The deposit costs €1.71 (2009).

From Signature to Completion.
 
In the time period between signature of contract and completion (or transfer of title), the seller must settle all property taxes in relation to the property, such as Local Authority Taxes, Sewerage Taxes (if applicable), and Capital Gains Tax. Certificates for each of these must be available for transfer of title otherwise the transfer cannot go ahead. Transfer forms also need to be completed, and then signed by all parties, and stamped by various government departments. It is the buyers responsibility to ensure the mortgage is in place and the bank will be present for the transfer. Transfer of Title On transfer of title, the buyer must pay the transfer fees in relation to the property. These can be quite costly; they are based on a rising scale in accordance to the purchase price and are as follows. · €0 - €85,000 = 3% · €85,000 - €171,000 = 5% · €171,000+ = 8% It is beneficial if the property is purchased in joint names, as the transfer fees when buying, and capital gains tax when selling, is payable on each individuals half share. Agents commission fees are payable by the seller. The buyer should not be asked to pay anything further.

Property Taxes.
 
Property tax is payable annually, and the rate varies from area to area, and varies depending on the property type land, a residential house, commercial property and so on. Tax can be charged either in a flat annual fee, or in some cases at 0.05% of the estimated property value in accordance with the title deed (in either case, the amounts are moderate).

Other charges.

Other fees payable by a property owner include (some or all of the following · sewerage charges payable annually · services such as refuse removal payable annually · water supply and fees payable every four months · electricity supply and fees payable every two months · telephone supply and fees payable monthly.