Buying Property in Cyprus

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Buying Property in Cyprus

Cyprus has different types of very good and prestigious properties that have retained their value even during the 2008/2009 financial crisis. Properties such as villas, houses of character and deluxe apartments have proven to be a good and steady investment to most investors seeking a high return on their investment. According to the Central Bank, the advertised prices for property returned to positive territory in March. Data showed that, in the first quarter of this year, prices increased by 4.5 per cent when compared to a year earlier.

Permit to Buy Property in Cyprus

Citizens of all EU member states, who have resided in Cyprus continuously for a minimum period of five years at any time preceding the date of acquisition may freely acquire immovable property without the necessity of obtaining an AIP Permit. On the other hand, citizens of all EU member states, who have not resided continuously in Cyprus for a minimum period of five years may only purchase their primary residence or any immovable property required for their business activities or supply of services, whilst those that have not resided in Cyprus for a minimum period of five years, require an AIP permit to acquire immovable property for secondary residence purposes. Individuals who are not citizens of an EU state may not acquire any immovable property unless they are granted a permit in terms of Chapter 246 of the Laws of Cyprus.

Procedure for property acquisition:

  1. Choose a property and agree on the price with the seller.
  2. We draw up and negotiate a Preliminary Agreement of sale that is acceptable to both parties.
  3. The Preliminary Agreement is signed at our office by you (or, in your absence, one of our lawyers on your behalf by power of attorney) and by the seller.
  4. This is normally valid for three months, but a longer or shorter period can be agreed upon.
  5. Normally a deposit of 10% of the purchase price is lodged with us on signing this contract; this is forfeited in favour of the vendor, if the sale is not completed by you without a legally valid reason.
  6. This contract binds both parties to keep their agreement for the sale subject to a number of conditions / procedures being fulfilled before the contact lapses.
  7. Signature of a final Deed of Sale and passing of the keys to the new property owners.

We are in a position to provide a full service in connection with the drafting, review and negotiation of preliminary agreements proposed by the sellers. Our role during the three month term of the Preliminary Agreement consists of:

  1. Conducting the necessary legal searches and trace the seller's title to the property to ensure that the property rightfully belongs to him and that it is not affected by any liabilities (hypothecs, privileges, etc.) burdening the property.
  2. Instructing an architect to check whether all the necessary planning permits are in place and to ensure that the property is vacant so that you can take up immediate possession.
  3. Applying for an AIP permit (the Government authorisation required by non-resident seeking to acquire property in Cyprus. A process of 1-3 months.
  4. Drafting of a Cypriot will to govern your property in Cyprus.

To afford our clients a comprehensive service, we have fostered relationships with property sales consultants who maintain the same level of service and loyalty that our clients are used to getting from us. These will pick you up at your hotel and drive you round on various property viewings, possibly on weekends if your time is limited.

The typical fee chargeable to sellers and buyers by private property brokers for their services is equivalent to one per cent each. The brokerage commission chargeable by local real estate agents is incorporate in the price and is payable by the seller only.

Buying Property in Cyprus Via Companies

It has become increasingly popular to buy property in Cyprus through a company. This is usually used in order to use the retained earnings within the company directly. There is no distribution from the company to the personal shareholders, and therefore there is no additional dividend tax. This can be also used for asset protection purposes.

Buying Property in Cyprus Via Trusts

Property in Cyprus can also be acquired via a trust. The setting up of trusts in Cyprus is regulated by the Trusts and Trustees Act. Cyprus has built a reputation as a respected and stable trust jurisdiction, based on a modern trust law, proper authorisation and regulation of trustees and a respected judicial system.

The trust is increasingly being adopted for varying levels of asset protection and estate planning. Foreign and local families alike are not too reluctant to shed the pride of direct property ownership in favour of a well-planned family strategy and competent property management that can be provided by a professional trust company, often recommended by the family’s trusted lawyer.

Therefore, it is now very common for property to be bought in trust for use by the new Cyprus resident family and friends, and to be maintained and managed in the best interests of the beneficiaries and in a manner that maximises the property investment held in trust. As specialist property trustees, we are able to competently manage a real estate portfolio in an effective manner, bringing together expertise not only in trust and financial management but also in property investment, development and management, as well as considerable experience in real estate transactions in Cyprus.

Renting Property in Cyprus

Renting a property in Cyprus is a fast procedure. A rental agreement can be signed within a few days after all the aspects are agreed to by lessor and lessee.

Property Management

For residents of Cyprus who do not actually reside permanently on the island there is the possibility of engaging a property management company. This would typically cover needs such as sorting out rent collection, tax matters, insurance cover, utility bills, keys and inventories.

Our Firm's Role

We have extensive experience in real estate transactions in Cyprus. Our property lawyers and planning consultants can provide consulting on residential, commercial, mixed-use and industrial property acquisition, sale and lease; consulting on residential, tourism and industrial real estate development; government permits and procedures. Chetcuti Cauchi advises on all legal aspects of buying, renting or developing property in Cyprus. We also work closely with banks, architects and involved parties to ensure smooth property transactions. We are also able to coordinates our in-house project management service for conversion or refurbishment projects of residential and commercial property where appropriate.

Our Property & Development Team also provides a full service in connection with the drafting, review and negotiation of preliminary agreements and deeds of sale/purchase of property in Cyprus.



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