Acquisition of Real Estate
Acquisition Of Real Estate
Acquisition of Real Estate Property in Cyprus includes:
- Transfer of title deed
- Long lease for periods of more then 33 years
- The acquisition of shares in a company that owns immovable property, if such acquisition results in the company becoming controlled by foreigners
- The establishment of a trust or any type of set-up, which is connected with the ownership of real estate, for the benefit of a foreigner, including tax benefits
Although the proceedings for the obtaining of the permission might need a considerable amount of time to be fulfilled, purchasers are entitled to occupy their properties until then.
Furthermore, any contract for the purchase or lease of property is valid even if the Pertinent Authority rejects the foreigner’s request for permit. As such, when purchasing a property, it is advisable for the relevant contract to include provisions for such an event so as to secure a refund of any money paid or any other remedy.
The application to the Pertinent Authority requires information about the personal details and financial standing of the applicant and particulars of the property and its present owner. Also it must be accompanied by a number of legal documents.
As a General Rule, Permission is granted to Bona Fide Applicants Provided they have:
- No criminal record in their country or in Cyprus
- The financial means to support themselves in Cyprus. (An income of €20,503 per annum between the couple is considered satisfactory)
As of 1 May, 2004, citizens of the E.U residing in Cyprus or Cyprus based companies controlled by citizens of a Member State are not considered to be foreigners. As for Citizens of the EU not residing in Cyprus, there is a transitional period until May, 2009, after which, they will be treated as equal to Cypriot citizens, regardless of their residential status.
Specific Performance - Safeguard for the Buyer
Specific Performance Law safeguards a purchaser of immovable property from a transaction between a seller and a purchaser, especially when the purchaser is not allowed to immediately transfer the acquired property onto his/her name even though payment of the consideration has been effected.
According to the provisions of Specific Performance Law, the purchaser of immovable property may secure the transfer of the acquired property onto his/her name by depositing a duly signed and stamped copy of the contract at the Land Registry, within two (2) months from the signing of the contract.
By depositing the contract in the Land Registry, the purchaser prevents the owner from transferring the property elsewhere or changing it, for as long as the contract is valid and legally effective. No burdens, charges or encumbrances can affect the right of specific performance after the contract has been deposited with the Land Registry.
Depositing a copy of the contract to the Land Registry gives the purchaser the right to seek “specific performance” of the terms and conditions of the contract and thus to register the property onto the purchaser’s name, even though the owner may not be willing to accommodate such procedures.
Advice to Prospective Buyers
With his 45 years experience in the real estate business, Mr. Bambos Palourtis has the following advice for prospective buyers:
Property should have title deeds.
- If the property is burdened with a mortgage, then the bank should be included in the negotiations.
- If there are no title deeds available due to mortgage by the seller, then an agreement should be made with the bank that with the issuance of title deeds the property will be free for transfer.
- Payment should always be made through a bank.
- If the buyer is not a permanent resident of the European Union, then a special application to the District Officer for a license to transfer the property is needed. This process takes approximately 30 – 40 days and costs in the region of €300-€500.
- Every Contract of Sale needs to be stamped and sealed by a Notary Public before it is submitted to the Land Registry for Specific Performance purposes.
- Deal with licensed professionals. Check first.
- Always when you find a professional, agree fees to be charged in writing prior to providing the service. Also request an estimated completion time of the job agreed and provide confirmation by email with relevant documents attached.