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The property market in Cyprus is one of the major industries which is becoming increasingly complex and investors are advised to seek independent advice as to their rights, protections and obligations. Property in Cyprus has been a key driver of economic prosperity.
Our team, made up of real estate appraisers, lawyers, capital gains experts and real estate agents, can be invaluable for future investments, whether acquisition or sale. private or commercial real estate. Our firm has a proven track record of successful acquisitions of complex real estate assets and real estate transaction services.
Before You Buy – Real Estate Due Diligence
There are some things to look out for during the property buying process and steps to take to help you avoid the pitfalls.
Our team of experts can provide a real estate due diligence report before the acquisition of the property, which will allow you to make a concrete decision with all the advantages and disadvantages of the local real estate market as well as the property itself. .
The due diligence report (non-exhaustive) may consist of:
- Land registry Search on the title deed and if it is free of any encumbrance and unpaid mortgage
- Pending utility bills, such as
- Unpaid municipal charges
- Unpaid water board fees
- Exceptional sewer charges
- Unpaid electricity charges
- Information about previous and current owners
- Control of building and town planning permits
- If there are rental agreements in place
- If the property may have a VAT charge when selling
Submission of the Sale-Purchase Contract (SPA) to the Land Registry
Once the buyer and seller come to an agreement, the sale-purchase agreement will take place. It is important to note that the buyer, in order to obtain full legal protection and to be able to raise a matter in court in Cyprus, must submit the SPA to the Land Registry, within 6 months from the date of signature.
1. Fees for filing the sales contract
A fixed rate of 50? is payable to the District Land Registry Office upon filing of the Bill of Sale with the Land Registry Office.
2. Capital gains
Real estate capital gains are subject to a 20% tax on the value of the sale. If, however, the property is purchased from a banking institution or third party that has a non-performing loan, the capital gains may be adjusted significantly, once a capital gains decision is obtained. Our experts can prepare and submit the decision to the tax department.
3. Stamp duty
Varies between 0.15% and 2% depending on the value of the property;
- No stamp duty applies for the sale of properties with a value of less than €5,000.
- For purchases up to €170,860, stamp duty is calculated at 0.15% of the purchase price.
- For properties with a value above €170,860, 0.20% stamp duty applies.
4. Transfer Fees:
Vary between 3% and 8% depending on the value of the property:
VALUE OF THE PROPERTY IN €
Up to 85,000 -> 3%
85.001-170.000 -> 5%
Over 170,001 -> 8%
The current VAT rate in Cyprus is 19%. VAT generally applies to newly developed residential properties, commercial properties and land without accommodation (exceptions may apply). A specific request must be submitted to the VAT administration.
- Preparation, review and execution of sale-purchase agreements
- Real Estate Due Diligence Reporting on Property
- Assistance and appearance of the Land Registry
- Capital gains and tax advice
- Stamp Duty Service
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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