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A Guide for Foreign Investors
So you want to buy property in Cyprus. But you’re worried about investing in an unfamiliar country where tons of things can easily go wrong.
Don’t worry. You’re not alone.
Buying property in Cyprus has, unsurprisingly, exploded in the past couple of years. From its highly-affordable housing market to low taxes and even lower crime rates, it is no surprise that this quaint Aegean island has taken off.
Whether you are looking to buy your next retirement home or rent an apartment by the sea, buying property in Cyprus can be tricky, especially if you are not yet accustomed to their realty procedures.
This guide explores the common faults buyers often make when purchasing property in Cyprus and outlines the steps you can take to avoid getting caught in the confusion!
It is not uncommon to come across unlicensed estate agents in Cyprus. Thankfully, the government has introduced new legislation to counter these illegal activities, but you still can’t be too careful when it comes to finding a registered agent.
Registered estate agents, such as Prime Property, must pass a series of professional examinations before qualifying to work, guaranteeing they are adequately knowledgeable of all transgressions that may affect your purchasing experience.
Nowadays, most property deals will be covered by insurance, protecting buyers and sellers if a transaction goes awry.
Before buying, it is essential to make sure you first obtain permission to buy from the Council of Ministers, a division of the executive branch of government, via a written application that can be found on their website.
The application requires the input of specific property details so you should fill out this application after you have found a property to purchase.
When buying from a developer, there is a mortgage involved, and you may not get your hands on the title deed of the property until the mortgage is paid in full. Not only that, but it’s even possible you’ll be made liable for that mortgage if the developer or landowner declares bankruptcy.
A title deed is an official certification from the Land Registry of the Republic of Cyprus that names the legal owner of a property. Making sure the potential sellers have a legal title deed to the land is essential when it comes to protecting technicalities that may infringe your purchase.
You should make sure your development contract is deposited with the Lands Office to guarantee the developer is legally responsible for your property until the title deed can be transferred to you.
Appointing a lawyer is one way to make sure a developer is not cheating you. By finding a lawyer specialising in property investments before signing a contract, you are less likely to fall victim to a contract that does not protect the buyer and is biassed towards the developer’s demands.
Hiring a lawyer is the most important precaution to take when buying property in Cyprus, whether it’s from a developer or owner, because a local lawyer will have the best knowledge of each step you should take.
After hiring a lawyer, it is essential to write a contract that clearly outlines both you and the seller’s obligations. All terms negotiated between you and the seller need to be expressly included in the written contract, including the agreed inventory.
Your lawyer will help draft this contract to make sure you are fairly represented and obtain all ownership rights.
Having a lawyer is also helpful in conducting due diligence. Due diligence is when the lawyer makes sure there are no pre-existing mortgages on the property. He will also make sure all mortgage negotiations have been documented in writing, including the signature of any co-owners.
Because many properties often have co-owners, ensuring all owners’ agreement of the sale is a crucial step to avoid fraudulent errors later on.
Another reason for exercising caution when buying is that property ownerships are still heavily disputed in Northern Cyprus. Thousands of displaced peoples have had rulings in their favour from the European Court of Human Rights - meaning, if they owned a property before 1974, they could still be considered the legal owners today!
The Cyprus Property Action Group has advised potential buyers to only purchase a resale property with a full Title Deed, thus ensuring legal ownership goes straight into your hands.
Ownership disputes are also common in divorce proceedings and are one of the many things to double-check before buying. If you try to develop on a property that has not been legally attained, you risk forfeiting both your property and money.
The easiest way to avoid all of these potential pitfalls is by starting with a qualified estate agent that has experience with property purchases in Cyprus.
Here, at Prime Property Group, we offer rental and property management services along with local guidance on how and where to get started. Get in touch with us here or submit a request on our website to start the search for your next home or rental today!
Более подробную информацию о налогах и сборах при покупке недвижимости на Кипре вы можете получить на нашей странице.
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