Conclusion Of Property Purchase In Cyprus By Foytina
Property acquisition in Cyprus is in many other countries a certain legal procedure that shall and must be observed by all the parties concerned. Foytina's expert agents are in position to coordinate this whilst liaising with all parties to prevent pitfalls and secure the conclusion of a deal.
In case you wish to raise a loan for funding a purchase, then a Cyprus-bank becomes a participant in the procedure. You will have to prepare a set of documents and draft them appropriately to fulfill the bank's requirements. Foytina can help you even on this aspect! Tax and duties parameters that might arise from property acquisition might arise, hence a comprehensive dicussion with your Foytina agent must be conducted.
Find below the sequence of steps and relative actions when executing a purchase in Cyprus. (following scenario refers to a buyer purchasing a fully constructed property subjected to VAT):
- - Step 1: Buyer pays a reservation fee to Foytina agent for the selected property the range of which varies. Upon payment, the property is normally withdrawn from the Market and priority is given to the particular buyer, however only for a certain period of time. Foytina's agent will inform you for the terms and conditions of the reservation fee payment. Reservation fee will count towards the deal's total amount, if gets finalised. IMPORTANT: Please note that this step (Step 1) might not apply in some transactions and/or can be skipped.
- - Step 2: Buyer engages a Cyprus lawyer for legal support of the transaction. Foytina can help in finding the right one if buyer requests so. Buyer will sign the required Powers of Attorney to the lawyer as well if needed. Thereafter the customer can return home if wish so. Lawyer will at least perform the following actions (this period is normally called 'due diligence performance'):
- - Checks the legal documents for the property
- - Reports any encumbrances of the property, if any are found
- - Drafts Property Sales Agreement and has it approved by the Parties.
- - Opens a clients bank account in order to act as the escrow of the payments involved
- - Step 3: Buyer enters a Purchase Agreement (also known as Sale Agreement) and simultaneously pays Deposit Amount which comprises of some percentage of the deal's value. Upon payment, the property should be withdrawn from the Market for good and the Agreement's provisions are performed.
- - Step 4: Buyer's lawyer continues and carries out the following actions:
- Stamping the Sales Agreement with simultaneous payment of Stamp Duty
- Depositing the Agreement with regional Land Registy Office in order to prevent double sale of the property.
- Sends a request to obtain permission from the Council of Ministers of Cyprus for property acquisition. Essentially this is a mere formality. Only two points are checked – the customer shall have no problems with the Law (his/her name shall not appear in Interpol lists) and the purchased property shall be the first (for not ЕU citizens)
- The lawyer prepares application for reduced VAT rate if buer is eligible for this.
- - Step 5: Once the application for reduced % VAT is examined, the customer transfers the deal's balance to the seller depending to the final VAT rate achieved and takes possession of the property (keys are delivered to him/her). Sellers transfers all utility bills to the Buyer with zero debt.
- - Step 6: Ownership of property is registered to the Buyer and Land Registry prints out and delivers to the Buyer the original document of the Title Deeds showing the Buyer's full name on.
The above procedure may vary depending on the circumstances involved. Adjustments should be made if, for example:
- -The customer takes bank mortgage
- -The property is off-plan or under construction
- -The customer buys resale property which is not subject to VAT
- -The customer signs the Sales agreement whilst being outside Cyprus
Depending on the circumstances, Foytina can definitely help you, simply ask us so!
The Foytina.Com Team