Real Estate Lawyers in Cyprus: Ensuring Secure and Compliant Property Investments

Interest in purchasing real estate in the Republic of Cyprus has surged in recent years, driven by attractive investment programs. These programs allow third-country nationals to obtain a permanent residence permit by investing in residential or commercial properties in Cyprus.

With its year-round warm climate, strategic location, favorable tax regime, extensive double tax treaties, and robust legal system aligned with English common law, Cyprus is an ideal destination for both residence and investment.

Steps to Acquire Real Estate in Cyprus

For a smooth real estate acquisition process, it is recommended to engage an experienced lawyer to handle and oversee the procedure.

A. Due Diligence Stage

Before acquiring real estate, a thorough due diligence process is essential. Prospective buyers should request identification documents from the seller, such as a passport or national ID for individuals, or corporate certificates and the Memorandum and Articles of Association for companies. Key documents include the Certificate of Registration of Immovable Property (Title Deed) and a recent Immovable Property Search Certificate from the Department of Land and Surveys, which discloses any legal encumbrances on the property.

If the property is a house, apartment, or building, additional documents confirming the issuance of all necessary building and planning permits, a certificate of final approval, and up-to-date architectural plans should be obtained. For properties with registered mortgages, a waiver from the bank must be provided.

For land acquisitions, ensure the land is suitable for building purposes. Further information and documentation can be requested based on the initial findings.

B. Know-Your-Customer (KYC) Procedures of Banks

Before finalizing a sale agreement, prospective buyers should inform the seller’s bank about the proposed acquisition. The bank will conduct internal KYC and due diligence procedures to verify the buyer’s identity and source of funds, ensuring compliance with regulatory requirements.

C. Drafting of Sale Agreement and Payment of Stamp Duties

After due diligence and KYC procedures, the buyer and seller will negotiate and draft a Sale Agreement, outlining payment terms, transfer of title, and other critical conditions. Engaging a lawyer for drafting and reviewing the Sale Agreement is strongly advised to protect the buyer’s rights.

The executed Sale Agreement must be stamped by the Tax Department, with applicable stamp duties paid within 30 days to avoid penalties. Stamp duties are calculated as follows:

• 0% for the first €5,000
• 0.15% from €5,001 to €170,000
• 0.20% from €170,000 and above (capped at €20,000)

D. Deposit of Sale Agreement with Land Registry; Specific Performance

Once the Sale Agreement is executed and stamp duties are paid, the buyer can deposit a certified copy of the agreement with the Land Registry within six months. This deposit secures the buyer’s rights under the Specific Performance Law, allowing them to transfer the property to their name once all conditions are met.

E. Permit for Purchase by Non-EU Citizens

EU citizens can purchase property in Cyprus without restrictions. However, non-EU citizens must obtain approval from the Council of Ministers before the property can be transferred to their name. This application is submitted after executing the Sale Agreement, accompanied by personal and financial information of the purchaser.

F. Transfer of Property and Delivery of Possession

The seller must obtain a Tax Clearance Certificate from the Tax Department, confirming all taxes and fees are paid. Both buyer and seller (or their attorneys) must present the Sale Agreement and Tax Clearance Certificate to the District Land Registry Office, where the transfer fees are calculated and paid. Transfer fees are as follows:

• 3% on the first €85,000
• 5% on €85,001 to €170,000
• 8% on amounts above €170,000

Certain exceptions apply, such as total exemption from transfer fees for VAT-subject transactions or a 50% reduction for non-VAT transactions. Upon completion, the Title Deed is issued within one month, registering the buyer as the new owner.

Our Legal Services

At Dionysiou Legal, we assist you through every step of the property acquisition process, including:

• Conducting due diligence on the seller and property
• Drafting, reviewing, and negotiating Sale Agreements
• Property valuations and investment analysis
• Advising on tax implications of property transactions
• Applying for purchase permissions for non-EU citizens
• Handling Land Registry transfers
• Advising on financing, town planning, and zoning regulations
• Estate planning, administration, wills, probate, and re-sealing

Contact us for any inquiries or to discuss how we can assist you with your real estate investment in Cyprus.