Buying in Cyprus
When purchasing a freehold property in Northern Cyprus, there are certain procedures that must be carried out with the Ministry of Interior – this is known as a purchase permit application. This can sometimes take up to 18 months to complete, but due to Government initiative this time frame has reduced significantly through 2010 and by the end of 2011 the predicted completion time for new applications is expected to be around 6-12 months. This does not mean however that you have to wait for this amount of time before you can take possession of your property.
The process for buying in Cyprus any freehold property:
- Decide on the property
- Agree price and payment schedule
- Pay an agreed non-refundable holding deposit (to be held by the Vendor) to secure the property off the market for a period of 7 days along with the 0.5% contract stamp duty.
- Contract to be drawn up by the solicitor clearly setting down the terms of sale including price, timescale and any other special conditions.
- Contract signed by both parties.
- Contract is stamped at the Tax office and the 0.5% contract stamp duty is paid by the purchaser’s lawyer, within 21 days of the contract date.
- The contract is registered at the land registry office by the purchaser’s lawyer.
- Purchaser provides the agreed deposit (normally 20%) within the time frame specified within the contract (usually within 14 days).
- Purchaser’s solicitor applies for the Purchase Permit from the Council of Ministers.
- The purchaser pays the final balance on the date agreed by both parties within the contract, along with the 5% KDV (VAT) and takes possession of the property.
- For off-plan properties, or ones that are under construction, stage payments are agreed until completion of the property under the terms of the contract. Purchaser then takes possession of the property as above.
- Upon transfer of title the purchaser must pay the balance, the transfer of title stamp duty (currently 3%) and 1% of that stamp duty to the local municipality.
- Sale completed.
The costs involved are as follows:
- Solicitors Fees: Including all legal documentation and drawing up of contract, POA (power of attorney), purchase permit application, contract stamping & registration and completing the sale – £1,250-£1,750
- Stamp Duty: Currently at 3% of the valuation levied by the Land Registry Offic and 1% of the stamp duty charge paid to the Local Municipality.
- KDV (VAT): Currently at 5% of the valuation levied by the Land Registry Office. Payable on all sales except those where title is not being transferred from a company, but an individual.
- Contract Duty: Fixed 0.5% of the Contract price – payable to the TAX office by the purchaser within 21 days of the dated contract.
Process for buying in Cyprus a leasehold property is as follows:-
- The process to purchase a leasehold property is very similar to freehold purchases. However you must apply either to the Ministry of Tourism who will grant the lease.
- A deposit of 20% must be paid at the time of application and held on behalf of the Vendor. Once the application has been accepted by the Ministry of Tourism the sale can proceed to a completion fate agreed by both parties. The lease is then transferred from the Vendor to the purchaser.
The costs involved with a leasehold purchase are as follows:
- Solicitors Fees: Including all legal documentation – drawing of contracts and POA = £500
- Stamp Duty: £500 fixed
- Contract Duty: Fixed 0.5% of the Contract price – payable to the TAX office by the purchaser within 21 days of the dated contract.