Cyprus Property Purchases: Legal Considerations

Whenever you buy property abroad, there are some legal considerations and expectations that catch you by surprise. Sometimes the surprise is small; sometimes it is great, but there is always something that you learn during the process. This is because property is not transferred quite the same way in every country around the world. When you purchase property in some countries, you will have to have the full purchase price when you make an offer. In others, you can make an offer, secure a contract, and then seek financing. You just never really know how the transaction is going to go unless you do your homework.

Properties in Cyprus are among the most sought after properties around the world. Relatively low property prices and a strong economy are what lure most people to this beautiful island paradise. Majestic mountains, sandy beaches, ancient historical sites, shops, restaurants and luxury living accommodations don’t take away from the initial allure either. They only add to it.

Purchasing property in Cyprus as an expatriate is relatively easy and straightforward. However, there are some costs and procedures involved that might catch you by surprise. Here are just a few of the legal considerations that you should make before you purchase property in Cyprus:

• You must become a permanent resident of Cyprus if you plan to spend the majority of your time there. If you plan to spend 180+ days a year in Cyprus, you should look into getting approval as a permanent resident.
• You can obtain a mortgage through a Cyprus bank for a Cyprus property. Interest rates are usually very low, and fees minimal.
• Down payments for property in Cyprus vary according to your residency status. If you are a resident of Cyprus, you will have to put 10% down. If you live in an EU country, you will have to put 20% down. Residency outside of the EU requires a 30% down payment.
• You will be required to pay a reservation fee when you make an offer on a property.
• You will also need to hire a lawyer. Lawyer fees usually average about .75% of the purchase price of the property.
• Banks will also charge you anywhere from .75% to 1% of the mortgage price to cover arrangement fees.
• Only Brits are exempt from the Cyprus property inheritance law. Under the law, property holders have to leave their property to their spouse and children in equal parts. UK citizens are allowed to leave their property to whomever they wish IF they have a will.
• If you sell the property for profit, you will have to pay capital gains tax amounting to 20% of the profit earned from the sale.

If you plan to buy property in Cyprus or another country, you should be very careful to learn about all of the laws surrounding property in that particular country. Hiring a local agent or lawyer is also a great way to ensure that you don’t make any mistakes along the way.

Steven Clarke - Marketing Manager for www.cypruspropertyclub.co.uk. Cyprus Property Club brings buyers and sellers of properties in Cyprus together and contains 1000's of Cypriot properties for sale across all the top locations including Peyia, Kato Pafos, Oroklini.