- Title deeds
- Transfer of property from the vendor to the purchase
- Contract of Sale
- Fees and tax payable
Title deeds are issued by the Land Registry Office, which is the only competent government department to register charge and transfer immovable property. Examination of the Title Deeds or Certificate of Registration of the Immovable Property is essential.
By examining the registration certificate we ascertain the following:
1. Identity of the property (in other words the Title Number and the location of the property)
The title number and sheet/plan are unique elements, identifying the property and distinguishing it from any other property. The location of the property is mentioned on the top left-hand side of the certificate, whereas the registration and the title number and sheet/plan, on the top right-hand side. The size of the immovable property is mentioned at the top left-hand side, expressed in square meters (one decare is equivalent to 1000 sq.m and a hectare to 10,000 sq.m.). Old property titles mention donums and evIeks (one donum is equivalent to 1338 sq.m and one evIek is equivalent to 334.5 sq.m).
In the case of apartments, the number on the door and the floor on which the apartment is located are also mentioned. As regards the size of the apartment, new title certificates analyse the meters of the apartment and the meters of the covered verandas separately, as well as the percentage that the apartment is entitled to in the common owned areas.
2. Owner of the Immovable property
The owner of the immovable property may be a person or persons or a company or companies. They are referred to by their identity card number and in the case of companies by the registration number allocated to them by the Registrar of Companies.
The share owned by the owner is mentioned on the left-hand side of his name in fractions or in full e.g. the whole part or ½ or ¼ or 32/74. Apartments and houses, which have been built in the context of a unified development plan, have a separate title each.
Where more than one person owns the immovable property, a specific examination is necessary.
An immovable property may be burdened with the following charges:
It is registered under the name of the mortgage creditor in person, with the consent on the owner.
b) Interim Order
It is the commonly known memorandum. When a creditor secures a Court decision in his benefit, he may register such decision at the Lands Registration Office and charge the immovable property registered under the name of his debtor, for the purpose of turning such property into a guarantee for the collection of the agreed debt.
d) Deposition of the Contract of Sale to the Land Registry Office
The contract of Sale may be deposited to the Lands Office in favour of the purchaser, following the payment of the stamp duty and the stamping of the contract. Such deposition prevents the property from being sold twice and grants the purchaser certain rights and priorities as regards the immovable property.
In addition, it is an indispensable precondition for the specific performance procedure in front of a Court of Law, as provided for by legislation. Where the above procedure is successful, it ends up with a Court Order to transfer the property to the name of the purchaser.
Any rights related to the immovable property such as access fees etc are mentioned on the title. Apartment titles mention the percentage of service charges as per the joint ownership property, parking places, storage places or garden.
Contract of Sale
1. Drafting the Contract of Sale
An advocate usually drafts the Contract of Sale. Such contract must contain all elements required by the Law for a valid and binding agreement including the following:
a) The name and particulars of the Contracting Parties.
b) Full particulars of the immovable property to be sold, such as the topographic plans etc, inventory and any other indispensable particulars.
c) Price of sale, terms of payment and foreseen interest.
d) Date of delivery of freehold and consequences of non-delivery.
e) Time of transfer and obligations of both parties for the preparation, such as the issue of a freehold title by the vendor and the 'relevant permits by the purchaser.
f) All those particulars such as an insurance coverage and stamping.
2. Deposition of the Agreement to the Land Registry Office
It may be done in person and/or by the advocate of the Purchasers.
Transfer of property from the vendor to the purchaser
1. Permission of the Council of Ministers
A permission granted by a committee (district officer) under the instructions of the Council of Ministers is needed in order to transfer immovable property to aliens (non-EC residents). For acquiring such permission, an application, must be accompanied by the documents mentioned below:
a) A site plan
b) A copy of the property title
c) A copy of the building permission
d) A copy of the contract of sale
e) A plan view of the house or apartment
f) The area of the immovable property to be acquired
g) A bank reference and a bank statement of the applicants
h) Copies of the pages of the passports of the applicants and of their spouses
i) The marriage certificate of the applicants or a relevant certification of their embassy, where the spouses do not have the same surname and where the name of the husband is not mentioned on the passport of the wife.
j) A copy of the residence and work permit of the applicants in Cyprus EC citizens who are residents of Cyprus do not need the permission of the Council Of Ministers. They only need to prove that they are residents in Cyprus.
k) Registration number from the Immigration Office (pink slip)
l) Application to the District Office
The transfer in the name of the purchaser is affected either in person or through a representative, by means of a Power of Attorney certified by a certifying officer. The following is needed for transfer:
a) Free property title
b) Stamped Contract of Sale
c) furnish of receipts of payment of all fees, charges and taxes burdened on the immovable property being transferred. Such fees, charges and taxes may be one or more of the following: (i) Immovable property tax, (ii) Urban immovable property tax, (iii) Capital gains tax, (iv) Inheritance tax (if applicable).
d) Certificate of payment of liabilities issued by the Sewage Board
e) Municipal fees
f) Community fees
g) Land Registry fees
The procedure of acceptance of the transfer is concluded by the calculation of the registration fees from the Land Registry Officers and their payment by the Purchaser to the Land Registry Office.
The level of fees depends on the type of transfer and it is either calculated on the estimated value or on the purchase value of the immovable property. Estimated value means the value of the immovable property as it has been registered in the records of the Land Registry Office.
If the purchaser has taken a bank loan or a loan from another organisation, the transfer and mortgage in benefit of the creditor, take place simultaneously.
The Land Registry Office issues a new property title under the name of the purchaser and forwards it to the purchaser, following the transfer.
Fees and tax payable
1. Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of 2.56 EUR per thousand (or 0.15%) up to the value of 170,860 EUR thereafter the rate is 3.42 EUR per thousand (or 0.20%). This should be paid within 30 days of signing the contract.
For example if the purchase price is 250 000 EUR:
|The first 170,860 EUR||EUR 170,860 * 0.15 % =||256.29 EUR|
|Any amount above 170,860 EUR||EUR 79,140 * 0.20 % =||158.28 EUR|
% : Rate per thousand
2. Transfer Fees
Real Estate Transfer tax-fees are necessary in order to transfer FREEHOLD ownership to the name of the purchaser. This can be done as soon as the relevant Government Authority has issued the title deed and the purchase has been completed. The Transferee is responsible for the tax payment. The rates are on a graduated scale.
|Value of property
|Up to 85,430.10||3|
|From over 170,860.14||8|
For example if the purchase price is EUR 250,000:
|The first 85,430.10 EUR||EUR 85,430.10 @ 3 % =||2,562.90 EUR|
|85,430.10 to 170,860.14 EUR||EUR 85,430.10 @ 5 % =||4,271.51 EUR|
|Any amount above 170,860.14 EUR||EUR 79,139.86 @ 8 % =||6,331.18 EUR|
PLEASE NOTE: Should the purchase be made in joint names (provided the price is more than 85,430 EUR) the effective value for calculation is halved.
For example if the purchase price is EUR 250,000:
|1st Buyer||EUR 85,430.10 @ 3 % =||2,562.9 EUR|
|EUR 39,569.9 @ 5 % =||1,978.5 EUR|
|2nd Buyer||EUR 85,430.10 @ 3 % =||2,562.9 EUR|
|EUR 39,569.9 @ 5 % =||1,978.5 EUR|
3. Immovable property tax (per annum)
The Immovable property Tax in Cyprus is calculated at the market value of the property as at 1st January 1980 and that is why the majority of property owners in Cyprus don’t have to pay any property Tax. The property Tax is calculated according to the following chart:
|Property Value (1980) EUR||Annual Tax|
|0 – 170,860.1||No Tax|
|170,861.85 – 427,150.36||2.5|
|428,858.96 – 854,300.72||3.5|
The annual charges that a property owner can face in Cyprus is the Council Tax that varies from 80 – 350 EUR per year accordingly to the area and size of the property.
4. Capital Gains
Subject to numerous exemptions and indexation, a 20% charge is levied on the profit. A 85,430.10 EUR tax-free allowance is made for own house provided that is your residence for five years and 17,860.1 EUR for other property. Other discounts include any payments made for the improvement of the property or for any additions on the property as well as the inflation rate.
As from 1st of May 2004, there is VAT only in newly built properties in Cyprus. The VAT stands at 5% for first time buyers while a percentage of 18% applies to people buying a second property in Cyprus. There is no VAT for the purchases of a resale property or Land.