Purchasing real estate in Cyprus can be a profitable investment, but the process requires thorough legal preparation and compliance with all legal regulations. The services of a lawyer (or attorney, as they are often called in Cyprus) when purchasing real estate in Cyprus include several key stages that ensure the safety of the transaction and the protection of the buyer’s interests.
Contents
- 1 Main Legal Services When Purchasing Real Estate in Cyprus
- 1.1 Drafting a Reservation Agreement
- 1.2 Ensuring Compliance with Building Regulations and Permits
- 1.3 Preparation and Review of the Sales Agreement
- 1.4 Support for International Buyers
- 1.5 Filing the Contract with the Land Registry
- 1.6 Conducting Legal Due Diligence
- 1.7 Registration Process and Transfer of Ownership
- 1.8 Assistance with Obtaining Permanent Residency by Investment
- 1.9 Reducing VAT to 5% on the Purchase of a First Home
- 1.10 Compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) Requirements
Main Legal Services When Purchasing Real Estate in Cyprus
Drafting a Reservation Agreement
The first step after selecting a property in Cyprus is to sign a reservation agreement. This agreement, prepared by a lawyer, temporarily secures the chosen property for the buyer. The seller agrees not to offer the property to other buyers and not to engage in negotiations with them. To confirm these obligations, the buyer makes a deposit, the amount of which is specified in the agreement and typically ranges from €3,000 to €10,000 depending on the property’s value.
Ensuring Compliance with Building Regulations and Permits
If the property is under construction or was recently built, it is important to ensure that all necessary building permits are in place. The lawyer checks for all required permits and certificates, which is especially important to guarantee the legality of the transaction and the subsequent issuance of the property’s title deed.
Preparation and Review of the Sales Agreement
After signing the reservation agreement, the lawyer begins preparing and reviewing the main sales contract. This document records all key terms of the transaction: the property description, price, payment procedures, and the timing of the transfer of ownership. The lawyer may also negotiate with the seller to secure the most favorable terms for the buyer.
Support for International Buyers
Special attention should be given to international buyers who may face additional requirements, such as obtaining permission to purchase real estate from the Council of Ministers. The lawyer assists in submitting the application and obtaining this permission.
Filing the Contract with the Land Registry
To protect the buyer’s rights, the lawyer files the sales contract with the Land Registry. This action provides legal protection for the transaction and ensures that the property will be secured for the buyer, even if the seller attempts to enter into a deal with another party. Filing the contract also helps avoid potential disputes and complications in the future.
Conducting Legal Due Diligence
The lawyer conducts a comprehensive check of the property, known as due diligence. This process includes verifying ownership rights, checking for encumbrances and outstanding taxes. Special attention is given to verifying the existence of the title deed—a document confirming the seller’s ownership of the property. If the title deed is absent, the lawyer investigates the reasons for its non-issuance.
Registration Process and Transfer of Ownership
The final transfer of ownership is completed at the Land Registry, where both parties submit all necessary documents. The lawyer coordinates this process, ensuring the correct preparation of all papers and the timely payment of all taxes and fees, thus completing the transfer of the property to the new owner.
Assistance with Obtaining Permanent Residency by Investment
When purchasing real estate of a certain value (in accordance with the criteria of the Permanent Residency by Investment program), the lawyer provides full support. This includes helping with the preparation of all necessary documents, submitting the application, and negotiating with immigration authorities. This enables the buyer to successfully complete the process of obtaining a residence permit and minimizes the risk of rejection.
Reducing VAT to 5% on the Purchase of a First Home
In Cyprus, the standard VAT rate on real estate is 19%, but when purchasing a first home, the buyer may be eligible for a reduced rate of 5%. The lawyer assists in preparing all necessary documents to obtain this benefit and provides advice on complying with the conditions required to qualify for the reduced rate.
Compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) Requirements
One of the mandatory conditions when purchasing real estate in Cyprus is compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. A lawyer assists both the buyer and the seller in undergoing all necessary checks with the banks, which can be quite lengthy and complex. These measures are aimed at ensuring the legality of all financial transactions and protecting against fraud.
Purchasing real estate in Cyprus is a complex process that requires thorough legal support. Our company collaborates with an experienced licensed lawyer who will guide you through all stages of the transaction and ensure the protection of your interests. Your transaction will be conducted safely and in full compliance with all Cypriot legal requirements.
