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PROPERTY PURCHASE OR SALE
| THE PROCEDURE |
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Before even finding a property you wish to purchase, or before finding a purchaser for the property you intend to sell, it is advisable to contact the lawyer of your choice to advise of your intention to give instructions.
Once you have found a property to purchase [or a purchaser in the case of a sale] you advise your lawyer of the agreed purchase price and confirm your contact details [i.e. telephone/fax numbers and e-mail address]. Thereafter, with this firm, the process would be as follows:-
- You will receive a Client Care Letter which will set out the terms of engagement. Legal instructions will be given once you have signed and returned a copy of this letter to our office. At this stage we will also be requesting the following documents:-
| a) |
A copy of the page of your passport showing your photograph and ID details for each purchaser/vendor] |
| b) |
Confirmation of your residential address [ i.e. photocopy of a current utility account or a recent Bank Statement which records your name and address] |
- Thereafter the Contract of Sale will be prepared by your Lawyer [as the purchaser] or reviewed [as the seller] and after agreement between the corresponding Lawyers, a copy will be forwarded to you [preferably by fax or email] in order that you approval the relevant details of purchase/sale contained therein. Once approved the Contract of Sale can then be signed by all parties [in person] or by virtue of Power of Attorney [refer note below]
- Once the Agreement has been signed by all parties and the relevant payments made under the terms of the Agreement, your Lawyer will attend the local Income Tax Office in order to pay on your behalf Ad valorum income tax [refer note below] in order that the Agreement can be certified.
- The Lawyer will then deposit/file the original Agreement with the Land Registry under the provision of section 2 of the Sale of Land [Specific Performance] Law, Cap 232. This being a provision to ensure that once a Contract of Sale is deposited/filed with the Land Registry and the required conditions are fulfilled, the purchasers may apply to the Court for the transfer of title of the property in question into their name[s] thus specifically enforcing the terms of the Agreement.
- A certified copy of the Contract of Sale, together with a photocopy of the Inland Revenue receipt and Land Registry filing receipt will be forwarded to you by mail for your retention.
| COUNCIL OF MINISTERS APPROVAL TO OWN PROPERTY IN CYPRUS |
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Under current legislation, non-Cypriot citizens cannot own, and therefore cannot accept registration of a property into their name[s] without the prior permission of the Council of Ministers by making application to the District Officer. Whilst this is a formality for EU member citizens, [since the accession of Cyprus to the EU in May 2004] the permission can take several months to obtain. It is important to stress however that this permission is required prior to the transfer of registration [Title Deeds] only and will not be obtained prior to the signing of the Contract of Sale of the property.
However, after May 2009, EU members and companies will be in a position to acquire and invest in, any type of property and will be treated as Cypriot Nationals.
In order for your Lawyer to make the written application to the District Officer on your behalf, you will be required to provide the following information:-
| (i) |
Occupation |
| (ii) |
Marital status |
| (iii) |
Number and age of all/any children [including those over 18] |
| (iv) |
Religion |
| (v) |
Annual income |
| (vi) |
Details of capital [approximate] although statements may be requested to substantiate |
| (vii) |
Details of other properties owned in any country |
| (viii) |
Confirmation of any property for which Council of Ministers approval has previously been obtained by yourself [or any member of your immediate family] |
| (ix) |
Dates of any previous visits to Cyprus. |
| POWER OF ATTORNEY |
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In cases where you will not be in Cyprus for the entire purchase/sale process, you may decide to grant to your Lawyer, a Specific Power of Attorney, in order that as your attorney, they may undertake tasks on your behalf. The Specific Power of Attorney document may be signed by you as follows:-
| a) |
If signing the document whilst in Cyprus, you sign the document in the presence of a Certifying Officer after presentation of your passport. The original document is then retained by our office. |
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| b) |
If signing the document in the UK [or any Country covered by the Hague Convention] this must be in the presence of a Notary Public after presentation of your passport. The signed Power of Attorney duly notarised and a copy of your passport duly certified must then be faxed by the Notary to our office. Thereafter, the original document will be sent by the Notary to the Foreign Office for Legalisation through the Apostille procedure [process by which the signature and seal of the Notary are authenticated]. Once the document has been returned to you by the Foreign office, you will forward this document and the certified copy of your passport to our office in Cyprus by Registered mail. Details of your nearest Notary can be found by contacting a local Solicitor’s office or visiting www.thenotariessociety.org.uk |
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| c) |
If signing the document in any other Country, [not covered by the Hague Convention] you will be required to sign, after presentation of your passport at the Cyprus Embassy in the presence of the designated official. Where possible, a copy of the document and a copy of your passport duly certified should be faxed to our office and the original document and certified passport copy should be sent to our office in Cyprus by Registered mail. |
| AD VALORUM INCOME TAX - AGREEMENT STAMP DUTY |
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This must be paid and the Agreement certified within 30 days of the signing of said Agreement. The tax is calculated as follows:-
Up to and including the first CYP 100,000= (EUR 170,860.14) 1.5% [per thousand] is payable
Thereafter 2% [per thousand] is payable.
E.G. |
Property purchased for CYP 150,000= (EUR 170,860.14) |
Income tax due on the 1st CYP 100,000= (EUR 256,290.22)
will be CYP 150= (EUR 259.29) |
Income tax due on the additional CYP 50,000= (EUR 85,430.07)
will be CYP 100= (EUR 170.86) |
| Total payable will be CYP 250= (EUR 427.15) |
| COMPLETION |
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Legal purchase completion:
Defined as being when the Contract of Sale has been deposited/filed with the Land Registry and a copy of the Contract of Sale and filing receipt have been issued to the Client
Property completion
Defined as receipt of the final Architect’s Certificate or Engineer’s certificate from the Developer.
Site completion
Defined as receipt of the District Officers Completion Certificate which evidences that all relevant building and local authority works have been completed satisfactorily. or Engineer’s certificate from the Developer
| NEW BUILD - STAGE PAYMENTS |
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Under the terms of your purchase Agreement you may be required to make payments to the Developer at specific stages of the construction of the property. With the exception of cases where the balance of funds are by way of mortgage or loan, the payments as per your Contract of Sale should be forwarded, on or before the required payment date to the Client Account of your Lawyer. These funds will be held on account, until the Lawyer has received a copy of the Certificate issued by the Architect or Engineer for satisfactory completion of the respective stage of construction, from the Developer. Once receipt of this certificate has been confirmed to you, the require payment will be released to the Developer and the receipt held on file together with the Certificate copy.
| TRANSFER FEE - TITLE DEEDS |
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When separate Title Deeds are available for transfer into your name and you have fulfilled the required criteria [as detailed below] the Transfer Fee is payable calculated on the value of the property.
Criteria
| a) |
When all relevant building works have been completed satisfactorily and the District office have issued the Completion Certificate |
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| b) |
When you [or your Lawyer] are in receipt of the Council of Ministers approval letter for you to own property in Cyprus |
Fee calculation
Property purchase in Sole name
| UP TO CYP 50,000= (EUR 85,430.07) |
3% |
CYP 50,001= TO CYP 100,000=
(EUR 85,431.78) TO (EUR 256,290.22 ) |
5% |
| CYP 100,000= (EUR 256,290.22) AND OVER |
8% |
Property purchase in Joint names
| UP TO CYP 100,000= (EUR 256,290.22 ) |
3% |
CYP 100,000= TO CYP 200,000=
(EUR 256,290.22 ) TO (EUR 341,720.29) |
5% |
| CYP 200,000= (EUR 341,720.29) AND OVER |
8% |
E.G. Purchase in sole name
Purchase of property for the sum of CYP 150,000= (EUR 170,860.14) |
| 1st CYP 50,000= |
@ 3% |
CYP |
1,500= |
EUR |
2,562.90 |
| 2nd CYP 50,000= |
@ 5% |
CYP |
2,500= |
EUR |
4,271.50 |
| 3rd CYP 50,000= |
@ 8% |
CYP |
4,000= |
EUR |
6,834.41 |
| Total payable to transfer title |
CYP |
8,000= |
EUR |
13,668.81 |
E.G. Purchase in joint names
Purchase price divided and will be CYP 75,000= (EUR 128,145.11) each purchaser |
| 1st CYP 50,000= |
@ 3% |
CYP |
1,500= |
EUR |
2,562.90 |
| 2nd CYP 25,000= |
@ 5% |
CYP |
1,250= |
EUR |
2,135.75 |
| Total payable to transfer title |
CYP |
5,500= |
EUR |
9,397.31 |
| (being CYP 2,750= (EUR 46,98.65) per purchaser) |
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