Real Estate Transaction

Our legal team involve a structured process that ensures legal compliance and protection for our clients in real estate transaction.We can engage professional services, including real estate agents, lawyers, and financial advisors, is crucial to analyse the complexity of the transaction. With careful planning and due diligence, investing in Cyprus property can be a rewarding venture. Real estate transactions in Cyprus involve several steps and require adherence to local laws and regulations. Whether you are buying, selling, or investing in property, it’s essential to understand the process and the key considerations. Here’s a comprehensive guide to real estate transactions in Cyprus.

Key Steps in a Real Estate Transaction

1. Property Search and Selection:

2. Legal Due Diligence:

3. Negotiation and Agreement:

4. Sale and Purchase Agreement:

5. Payment of Taxes and Fees:

6. Transfer of Title Deed:

7. Final Steps:

Taxes and Fees For properties

1. Transfer Fees:

2. Stamp Duty:

3. VAT:

4. Capital Gains Tax:

FAQ

What is the process for registering a property in Cyprus?

The process involves several steps:

Legal Due Diligence: Verify the property’s title deed, ensure it’s free from encumbrances, and check for any outstanding obligations.
Sale and Purchase Agreement (SPA): Draft, review, and sign the SPA, usually with the assistance of a lawyer.
Payment of Taxes and Fees: Pay transfer fees, stamp duty, and other applicable taxes.
Transfer of Title Deed: Submit the signed SPA to the District Land Office, pay the remaining purchase balance, and complete the transfer of ownership.

What documents are required for property registration?

Key documents include:

Valid identification (passport or ID card)
Proof of address
Sale and Purchase Agreement (SPA)
Title deed of the property
Proof of payment of transfer fees and stamp duty
Bank documents if a mortgage is involved

How are transfer fees calculated?

Transfer fees are based on the property’s market value and are calculated on a sliding scale:

3% for the first €85,000
5% for the next €85,001 to €170,000
8% for amounts above €170,000

What is stamp duty, and how is it calculated?

Stamp duty is payable upon signing the Sale and Purchase Agreement. The rates are:

0.15% on amounts up to €170,000
0.20% on amounts above €170,000

Are there any restrictions for foreign buyers?

Non-EU nationals may face restrictions on purchasing property in Cyprus. They are generally allowed to buy up to 2 properties, such as a house, apartment, or plot of land. Legal advice should be sought to ensure compliance with local regulations.

What taxes are involved in property transactions?

Transfer Fees: Paid to the Department of Lands and Surveys upon transfer of the title deed.

Stamp Duty: Paid upon signing the Sale and Purchase Agreement.

VAT: New properties are subject to VAT at a rate of 19%, with reduced rates for first-time buyers.

Capital Gains Tax: Applicable on the profit from the sale of property, typically at 20%.

Can I finance the purchase with a mortgage?

Yes, both local and foreign buyers can obtain mortgages from Cypriot banks.

Requirements typically include proof of income, financial statements, and a good credit history.

How long does the registration process take?

The registration process can take a few weeks to a few months, depending on various factors such as the complexity of the transaction, the efficiency of due diligence, and the promptness of tax and fee payments.

What is the role of a lawyer in property registration?

A lawyer provides crucial services, including:

Conducting legal due diligence

Drafting and reviewing the Sale and Purchase Agreement

Ensuring compliance with local laws and regulations

Facilitating the payment of taxes and fees

Representing the buyer’s interests throughout the transaction

Can property be registered in more than one name?

Yes, properties in Cyprus can be registered in the names of multiple individuals, such as joint owners or co-investors.

What happens if there are issues with the title deed?

If issues are discovered with the title deed, such as encumbrances or disputes, the transaction should be paused until these issues are resolved. A lawyer can assist in resolving title deed problems before proceeding with the purchase.

Is it necessary to visit Cyprus for property registration?

While it is beneficial to visit Cyprus to inspect the property and handle transactions personally, it is not strictly necessary. Buyers can grant a power of attorney to a legal representative to handle the process on their behalf.