The procedure of purchasing a property is a bit lengthy and complicated. Below we provide you with a brief overview.
Once you have selected your property, you pay a deposit to the Seller. A legal purchase contract will be drafted and signed by you and the Seller. The first instalment is then payable as.
You may appoint your own solicitor to examine a purchase contract provided by the Seller. You and your solicitor should carefully examine all drawings and plans of your property, its site position, planning permissions, building licence and check whether there is a mortgage on your property.
Before signing the purchase contract, you shall decide in who’s name the property shall be registered in:
• your own name,
• joint names of both spouses,
• the names of adult children who will inherit the property, OR
• in the name of a limited company owned by you and/or your family members.
If the property is bought through a limited company and the deal is disclosed, overseas tax residents may be taxed by the tax authorities of their country of permanent residence for the benefit-in-kind arising from free accommodation on the property owned by the company.
If the purchased property is not transferred immediately into the name of the purchaser (i.e., the property is new or not yet completed), the contract of agreement shall be submitted to the Land Registry Office and duly stamped within two months from signing. Thus, the property is pre-registered in your name and this will protect you in the case that the Seller for any reason would not or would not be able to transfer the property to the Purchaser. This purchase contract certificated by the Land Registry Office will be the document on which legal proceedings can be taken through Cyprus Law for the compulsory transfer of the purchased property to the Purchaser - called ‘Specific Performance’. However, if the purchase contract is not deposited, the only remedy is to sue for damages for breach of contract.