How to buy property in southern Cyprus: Tips and warnings
Buying a property in southern Cyprus is a dream for many people looking to enjoy the Mediterranean climate, beautiful landscapes and favourable tax regime. The process can seem complicated, especially for those outside Cyprus, so it is worth knowing the key tips and potential pitfalls to avoid problems.
Step 1: Understanding the property market
Before starting the buying process, it is worthwhile to thoroughly understand the property market in southern Cyprus. The most important regions are:
- Limassol: A city known for its high property prices, especially in the centre and along the coast.
- Paphos: A popular tourist region, offering both luxury villas and more affordable flats.
- Larnaca: A port city with developed infrastructure, offering property at more affordable prices.
- Nicosia: The capital of Cyprus, where prices are lower than in the coastal cities, but where local deals are worth looking out for.
Step 2: Selecting the right real estate agent
Finding an experienced estate agent is key to a successful purchase. Make sure the agent you choose is licensed and has a good reputation in the market. A professional realtor will help you find a property that meets your expectations and guide you through all the formalities of the purchase.Our company represents developers directly so the buyer does not pay any remuneration to our company, our remuneration is always covered by the developer and the price of the property is set solely by the developer.
Step 3: Check the legal status of the property
It is advisable to carefully check the legal status of the property before signing the contract. In Cyprus, there is a possibility that the property is encumbered by mortgages or other liabilities. It is therefore important to consult a lawyer who will verify that the property is free of debts and other legal problems. It is also worth checking that the property has valid building permits and certificates.
Step 4: Signing of the reservation agreement
Once you have decided to buy, the next step is to sign a Reservation Agreement. This agreement usually includes details of the purchase terms, price and payment terms. At this point, a down payment is usually required, which is around 2-5% of the value of the property. Make sure that any provisions in the contract are clear and understandable and that your rights are adequately protected.
Step 5: Obtain purchase authorisation
If you are not a citizen of Cyprus or another European Union country, you will need to obtain special permission from the Cypriot government to purchase a property. The process is usually straightforward and involves submitting an application along with copies of documents proving your identity and information about the property you intend to buy.
Step 6: Finalising the transaction
Once the authorisation has been obtained, you can proceed to finalise the transaction. The final sale and purchase agreement should be drawn up by a solicitor and submitted to the Department of Land and Geodesy (Land Registry), which provides full legal protection. Once the contract is signed and all dues are paid, you will become the official owner of the property.
Step 7: Taxes and charges
When buying a property in Cyprus, you need to be aware of tax obligations and fees. The main costs are:
- Secondary market transfer tax (Transfer Fee): Calculated on the basis of the value of the property progressively and ranges from 3% to 8% , after taking into account exemptions the effective (real) rate is about 2.5 %
- Secondary market transfer tax - No tax
- VAT: For new properties the VAT rate is 5% and applies to the purchase of the first property in Cyprus, for subsequent properties the rate is 19%.
- Notary and legal fees: Dependent on the valuation of the property and on the arrangements with the lawyer and notary.
Warnings and pitfalls
When buying property in southern Cyprus, it is worth bearing in mind a few potential risks:
Title issues: Make sure the property has a clean title that is registered with the Land Registry. Properties without full land rights can be risky, these are mainly cases involving secondary market properties.
Properties with outstanding mortgages: In some cases, developers may sell mortgaged properties, which can pose a problem for the new owner. A lawyer should check whether the property is free of such encumbrances.
Developers: When choosing a property from a developer, make sure that the company has a good reputation and that the construction complies with building regulations. Lack of planning permission or quality issues can lead to serious complications.
Summary
Buying a property in southern Cyprus can be a great investment, but it requires a thorough analysis of the market and an understanding of local regulations. Working with a licensed realtor, lawyer and notary is crucial to safeguard your interests. By exercising caution and paying attention to every detail, you can avoid problems and enjoy your new home in beautiful Cyprus. Our company will provide you with full legal representation in Cyprus to protect your interests at every stage of your Property purchase.