Buyinga home on the island may take several months, and you might have to part with afew extra dollars while you are at it. Our company was established to providesuch services on a turnkey basis. We have a team of agents and lawyers who areready to represent you at all stages of the transaction and find answers to anyquestions or concerns you might have.
So, what is the procedure for buying a home like?
1. Preliminary agreement.
You will need to sign a preliminary agreement with the property owner detailing all the terms and conditions of the transaction, including when the main contract will be signed, payment options for the property, and other such particulars. Upon signing the preliminary agreement, the buyer pays a deposit. This can be 1-10% of the total price, or some fixed amount – for example, EUR 7,000.00 - 8,000.00. The deposit is non-refundable. After a month or so, the lawyer must check the property you are purchasing and prepare the main contract.
2. The main contract of sale.
Thereafter, within the period specified in the preliminary agreement, the parties sign the contract of sale and certify it with a notary. At this stage, the buyer must pay 30% of the total price of the housing, that is, if we are talking about a finished apartment or villa. For a still-to-be-finished property, a down payment will be required.
3. VAT.
Then comes the VAT payment. It is worth bearing in mind that Cyprus offers a 5% VAT exemption for the first 200 "squares" of a property purchased or built for permanent residence. The remaining area will attract a 19% tax.
4. Stamp duty.
Following this, the buyer is obliged to pay the stamp duty. Its value depends on the cost of the purchased apartments. Stamp duty may amount to 0.15 - 0.2% of the total price of the apartment or house. For example, an apartment priced at plus or minus EUR 150,000.00 will be charged a stamp duty of EUR 225.00.
5. Title transfer tax.
After that, the new owner is required to pay the title transfer tax. In Cyprus, this fee also depends on the final price of the property. This tax fluctuates and may range from 3 to 8%. At the same time, the applicant may be exempt from paying this fee if he/she has already paid VAT for the purchased property or may receive a 50% discount if the property is VAT-exempt. For example, for an apartment priced at EUR 150,000.00, the buyer will factor in the discount and pay EUR 3400.00 to the Cypriot treasury.
6. Transaction registration.
After paying all the taxes, the future "Cypriot" through his lawyer must apply to the land department and undergo mandatory state registration of the transaction. Cyprus law prohibits a registered transaction from being cancelled by anyone other than the buyer.
7. Payment procedure (final settlement with the seller).
Property buyers in Cyprus should be aware that cash payments are not accepted here. All settlements are done exclusively through the bank. At the same time, the required amount can be transferred to the seller's account both from an account abroad and from a Cyprus account. Meaning you can make the payment to the account both while at home and on the island. Also remember that you can bring with you maximum of EUR 10,000.00 in cash per person to Cyprus.
8. Acquisition of title.
To obtain your title deed, be sure to contact the land committee. You will need to submit to the committee your application, receipts for the payment of all taxes, and the previous owner's title, then wait about a month. After that, you and the previous owner will be invited to the title issuing. Congratulations, you are now the official owner of the property!