Cyprus is a lovely island country in the Middle East. “The Republic of Cyprus” is its official name. Its majestic cliffs, alluring culture, and lovely beaches are famous worldwide. Moreover, Cyprus’s hidden bays and endless stretches of golden sand are a great wonder. Indeed, it is a very fantastic traveling spot. The Republic of Cyprus allures tourist engagement toward itself.
Cyprus is also very well-known for its real estate or physical property. And thus have shown steady economic growth. It has a very optimistic effect on the inner aura of the country. Buying property in Cyprus has many incredible advantages.
How to Buy Property in Cyprus:
Buying property in Cyprus is a critical element of steady growth. The Republic of Cyprus has a broad option of cottages, villas, townhouses, houses, and apartments. Buying property in Cyprus is a straightforward process. It comprises only eight steps. These steps with complete descriptionsHow to Buy Property in Cyprus are given below:
1. Reservation of the Property:
The first step in buying the selected or chosen property is a “Property Reservation Agreement.” It is a contract in which a buyer pays a non-refundable reservation fee to the seller. And he has the right to buy the property for a fixed period of time. Besides this, the vendor must take the property off the market for an agreed time.
The reservation fees depend on the specific price for which the property is to be bought. The reservation fee’s primary intent is to fix the sale price and make the vendor take the property off the market. It also ensures that the seller is not allowed to sell the real estate to any other person during the reservation or fixed period.
2. Appointing a Lawyer:
Appointing an independent lawyer to buy real estate is advised or highly suggested. A lawyer can help you provide legal services. The tasks performed by the lawyers are:
- Checking the title of the real estate to check whether the seller has the right to sell or not.
- To verify that there are no other issues with the real estate title.
- Review of Contract of Sale (CoS).
- Negotiation of the contract.
- Applying to the tax authorities for reduced VAT.
- Act as an intermediate between the buyer and the seller.
- Representation at the Land Record Office for the transfer of title.
- Registration of the Contract of Sale at the LRO (Land Registry Office).
3. Due Diligence:
Due diligence is also known as conveyancing. The analysis is usually expected to be done by a buyer before entering into a contract with another party. Mainly, it involves risk and compliance checks.
It is one of the chores of the appointed lawyer to do due diligence. It is a vital check to see whether the seller is the rightful owner of the real estate or not. Moreover, it affirms the existence of a freely movable title. Before signing the contract of sale (CoS), it is highly instructed that the due diligence process be completed.
4. Negotiation of the Contract of Sale:
After due diligence, contract negotiation is the next step in buying real estate in Cyprus. It is the strategy of coming to a deal on a set of lawfully binding terms. A Contract of sale (CoS) is a private contract between the buyer and the seller. Typically, it is supplied by the sellers so that the buyers and their lawyers can review it. The appointed lawyer reviews the Contract of Sale (CoS) and helps with negotiations. Moreover, he ensures that the contract is duly executed.
5. Application for a Reduced VAT Rate:
VAT is abbreviated as “Value Added Tax.” It is a payable tax on real estate sales within the Member States of the EU. And following EU law, a standard VAT (Value Added Tax) rate of 19% is subjected to all new properties. One can apply for the reduced VAT rate of 5% to achieve a primary residence. But it is subjected to specific terms and conditions. And one can apply for a reduced VAT rate only if the following terms and conditions are fulfilled.
- Persons of age 18 or older are eligible to apply.
- The applicant should not have applied for the reduced VAT rate previously.
- The property for which reduced VAT is to be applied must be used as a residence for the next ten years.
- The reduced VAT rate of 5% applies to the first 200 sqm. For the remaining sqm, the standard VAT rate is applied.
6. CoS Registration at the LRO:
The contract of sale can be recorded at the Land Registry Office (LRO) after the entire execution of the contract and the buyer has paid the first installment. The first installment is mostly 30% to 40% of the purchase price. Registration of CoS at the LRO makes the contract official. And this step supplies security to the seller and the buyer.
Registration at the Land Registry Office (LRO) provides the utmost guard to the buyer under the law. This registration gives rights to the buyers to rightfully sell the real estate even before separate title deeds issuance in their names.
7. Approval to Obtain Immovable Property:
To obtain immovable property in Cyprus, non-EU citizens must get approval from the Council of Ministers. For this purpose, the application, along with the signed CoS, is submitted to the council. Typically within a month, the approval is granted.
Remember that it applies to non-EU citizens only. And Cypriots and EU citizens have no concern with it at all. And the approval to acquire immovable property in Cyprus must be only done before the title deed transfer.
8. Transfer of Title Deeds:
The last step in buying real estate in Cyprus is the transfer of title deeds. For this purpose, the buyer and seller present themselves in the Land Registry Office (LRO) to complete the transfer of title deeds.
