Purchasing real estate in Cyprus through an Assignment of Rights (AOR) remains one of the most sought-after instruments among professional investors in 2026. This mechanism allows one to purchase a property in a development under construction or recently completed, for which a title deed has not yet been issued. Given the shortage of finished housing in Limassol and Paphos, an AOR offers an alternative to direct purchase from the developer, often offering more attractive locations or prices. However, the legal nature of such a transaction requires a thorough understanding of Land Registry procedures and the tax obligations of the parties.
Contents
- 1 The essence Assignment of Rights mechanism in 2026
- 2 Benefits of Purchasing Real Estate by Assignment
- 3 Risks and critical points of the transaction
- 4 The Assignment of Rights process in 2026
- 5 Tax liabilities of the parties upon assignment
- 6 Practical recommendations for investors
- 7 FAQ: Frequently Asked Questions
The essence Assignment of Rights mechanism in 2026
An assignment agreement is the legal transfer of rights and obligations under an existing purchase and sale contract from the original purchaser (the assignor) to a new party (the assignee). As of 2026, this procedure is strictly regulated by the Sale of Property (Specific Performance) Law.
When you purchase a property through an assignment agreement, you effectively take the place of the original buyer in their relationship with the developer. It’s important to understand that in Cyprus, the issuance of title to a new property can take from two to five years after completion. During this period, the property remains “titleless,” and its transfer is possible only through the assignment agreement.
Benefits of Purchasing Real Estate by Assignment
The investment attractiveness of such transactions in 2026 is determined by several factors that make them more profitable compared to purchasing a property from scratch from a developer or on the secondary market with a ready-made title.
- Access to exclusive properties: Often, prime sea-view apartments or corner units are snapped up during the pre-launch stage. A resale offer is the only way to gain entry into a sold-out project.
- Below-market price: In 2026, investors who entered the project at the foundation stage two years ago can secure profits by selling the property slightly below the developer’s current price list to expedite the transaction.
- Time savings: Properties under resale are often in the final stages of construction or have already been completed. You don’t have to wait 24 months for completion, as you would with a new off-plan project.
- Property transparency: Unlike a pit, when transferring land at the finishing stage, you can directly assess the quality of construction, the view from the window, and the actual insolation of the premises.
Risks and critical points of the transaction
Despite the obvious benefits, purchasing a property without a title deed carries specific risks that need to be mitigated at the due diligence stage.
Developer’s consent
According to most standard contracts in Cyprus, assignment of rights is not possible without the developer’s written consent. As of 2026, developers often charge an assignment fee, which can range from €2,000 to €10,000, or 1-2% of the property’s value. You should determine in advance which party will cover these costs.
Checking encumbrances
The main risk is that the original buyer may have used the contract as collateral for a loan or had other injunctions (Memos). In 2026, your lawyer is required to obtain a fresh certificate from the Land Department (Search Certificate) confirming that the contract is clear and ready for transfer.
Tax complexities and VAT
If the original purchaser was approved for a reduced 5% VAT rate, this benefit is not automatically transferred to you. From 2026, the Cyprus Tax Authority is closely monitoring whether the new owner will pay the full 19% rate upon transfer or submit their own application for the 5% rate if the property is their first residence on the island.
Comparison of purchasing from a developer and by assignment
| Characteristic | Purchase from the developer (Off-plan) | Purchase by assignment (Assignment) |
| Price | Developer’s base price | Market price, possible discount from investor |
| Deadline | 18–36 months | Often the object is ready or almost ready |
| Selecting units | Any free | Only those that are for sale from investors |
| VAT payment | Directly to the state | Depends on the status of the object and the parties |
| Legal basis | Direct contract | Tripartite Agreement (Buyer-Seller-Developer) |
| Title status | Will be released later | Will be released later in the name of the new owner |
The Assignment of Rights process in 2026
The assignment process requires the synchronization of actions by three parties: the seller, the buyer, and the developer.
Step 1: Due Diligence
Your lawyer reviews the main contract between the first buyer and the developer. Particular attention is paid to the payment schedule: how much has already been paid and how much remains owed to the developer.
Step 2: Concluding an assignment agreement
An Assignment Agreement is signed. This document specifies the price at which the seller assigns their rights and confirms that the new buyer assumes the remaining obligations to the developer.
Step 3: Deposit with the Land Department
This is a critical stage. The seller’s old contract is withdrawn from the register, and a new assignment deed is simultaneously deposited. From this point on, you officially become the owner of the property’s rights in the Cypriot government system. This guarantees your right to obtain specific performance title in the future.
Tax liabilities of the parties upon assignment
In 2026, taxation of assignments has its own peculiarities that you should be aware of in advance.
- Capital Gains Tax: The seller (original purchaser) is required to pay 20% tax on the profit made from the transfer of rights. Without proof of payment of this tax, the Land Department will not accept the transfer of ownership documents.
- VAT: If the property is subject to VAT, it is important to ensure that the entire tax amount corresponding to the paid portion of the cost has been transferred to the budget by the developer.
- Transfer Fees: Since there is no title deed yet, this fee is not paid at the time of transfer. You will pay it later when the state issues the individual title deed in your name (if the property was not subject to VAT).
Practical recommendations for investors
When purchasing real estate under a transfer agreement in 2026, always request a Statement of Account from the seller confirming that the property is in good standing with the developer. It’s not uncommon for sellers to “forget” about accrued late payment penalties or unpaid maintenance costs (Common Expenses) for the period after the building has been completed but title has not yet been received.
Also, make sure the assignment agreement clearly states the right to receive the keys. If the property is already completed, the transfer of rights must be accompanied by the physical transfer of the property to your use.
FAQ: Frequently Asked Questions
Is it possible to formalize a transfer of property if the property is still under construction?
Yes, this is the most common practice. Transfer of rights is possible at any stage: from the foundation being poured to the issuance of individual title deeds. In 2026, many investors are reselling their contracts at the 80% completion stage to secure maximum capital gains without the need to fully pay for and furnish the property.
Am I required to pay VAT again when purchasing by assignment?
No, VAT is paid once on the property price set by the developer. However, if the reassignment price is significantly higher than the original contract price, the tax authorities may consider the difference a separate type of income. As the new buyer, you continue to pay VAT according to the schedule set out in the original contract.
How long does it take to change ownership at Land Registry?
In 2026, thanks to the digitalization of the Land Registry system, the process of depositing a new contract takes 5 to 10 business days after all documents are submitted. The main time (up to 3 weeks) is usually spent obtaining tax certificates from the seller and consent from the developer.
What happens if the developer goes bankrupt before title is released?
Your assignment agreement, deposited with the Land Department, grants you the right of “Specific Performance.” In 2026, this means you have a priority claim to the property over the developer’s creditors. The court may order the transfer of title to you even if the developer goes into liquidation, provided the property has been completed.
Is a power of attorney required to execute a remote assignment?
Yes, in 2026, you can complete a transaction remotely. To do this, you need to prepare a power of attorney for a Cypriot lawyer, have it notarized, and have it apostilled in your country of residence. This will allow the lawyer to sign documents on your behalf at banks, the tax office, and the Land Department.
