Buying Properties or Land in The Occupied Areas of Cyprus
The occupied parts of Cyprus has recently experienced a 'property sale' boom and accumulated construction. The vast majoirty of the properties affected by the boom are owned by Greek Cypriots who were forcibly expelled from their homes due to the Turkish invasion. To this day, the Greek Cypriots are still not allowed to return to their homes and properties and repossess them. The big problem of this situation is that it is a haven for illegal and corrupt businessmen to make a quick profit from the empty homes and unused lands no longer possessed by the Greek Cypriots.
European citizens who are thinking of buying properties belonging to Greek Cypriots in the Turkish-occupied area of Cyprus will have to think very hard before doing so. Consequently, this action constitutes a criminal offence which will result a European arrest warrant in whichever one of the 25 EU countries they may be including Cyprus.
In case a Greek Cypriot citizen appeals to a Court of the Republic of Cyprus accusing a European citizen who lives in the Turkish-occupied areas of illegally buying his or her property, the Court is more likely to approve the issue of a warrant for the European citizen arrest so that he or she can be charged. If an arrest is not possible because the European defendant lives in the occupied areas or has emigrated to another European country, the Court has the power to conduct a European arrest warrant. The defendant will be liable for an immediate arrest in whichever one of the 25 countries he or she is located in.
Following a law passed on 17th of March 2005 by the Cyprus House of Representives, if a European citizen illegally buys, cultivates, distributes or uses immovable property i.e. a house or apartment/flat and land, the citizen will carry a prison sentence of up to two years or a fine of up to 5000 Euros.
Buying Properties In The Republic Of Cyprus
EU Citizens are free to purchase property (a home in Cyprus) just as local persons, but for a second home there is a restriction in that, permission has to be granted by the Cyprus government. This restriction for the second home will be lifted in 1/5/2009. After this date, all EU citizens will be allowed to purchase whatever property they wish, just as locals. However, since 1/5/2004 professional people can work, stay and invest in Cyprus property, without restrictions. For example, an estate agent or a developer can purchase property, as from the 1/5/2004, with the intention to exercise their profession. However, from the 21 December 2004, a new law regarding Estate Agents has come into force, which places certain conditions and obligations on ayone wishing to exercise the profession of an Estate Agent in Cyprus.
Non Cypriot residents are given permission to acquire only one of the following:
One apartment
One house
A building plot or land up to three donums (4,014m).
For legislation purposes, acquisition of real estate includes:
Transfer of registration
Long lease of more than 33 years.
The acquisition of shares in a company,which owns real estate, in the case that such an acquisition results in the company becoming non Cypriot resident-controlled.
The establishment of a trust or any type of set-up, which is connected with the ownership of real estate for a non Cypriot resident's benefit.
As a general rule, all foreigners are permitted to acquire house/business premises in Cyprus, provided they have:
No criminal record in their own country or Cyprus.
The resources to support themselves in Cyprus. (Approximately an annual Ł12,000 per couple is sufficient.)
Procedures invovled by a non Cypriot resident acquiring property:
a) Application to the Ministerial Council or the District Officer of the area the property to be purchased is located. This should be completed and submitted to the District Officer of the area the property is situated. The information required to complete the form are as follows:
Personal details of the applicant and his/her financial status.
Particular information of the property
Particular information of the present owner, the sales contract and terms of payment.
The type of acquisition, whether freehold, long lease, by shares etc.
The District Officer will then co-ordinate with other Government Departments to make further enquiries and prepare a report of approval. This procedure may take up to 3 months, but in the meantime, there is no restriction in taking possession of the property.
(Please note: If you buy a property and it is not transferred into your name immediately, you are advised to file your sale contract at the District Land Registry within 2 months from signing. [Stamp duties must be paid within 30 days from the signing of the contract otherwise there is a penalty.] If you do not file the contract and the seller changes his mind regarding the sale, you canonly claim damages, whereas if you file your contract, you will be able to seek the remedy (through the courts) of Specific Performance (i.e. for the transfer of the property into your name). The filing of the contract operates also as a charge on the property.)
b) Application to Central Bank
On receipt of the approval from the District Officer to acquire the property, an application should be submitted to the Exchange Control Officer to confirm that the purchase was paid for in foreign exchange. This application should be submitted together with the following documents:
Copy of receipt or evidence of the foreign exchange importation. The Central Bank of Cyprus will provide the required certificate, saying that the said purchase was paid for in foreign currency.
The sale contract.
Copy of the Ministerial Council's permission to acquire the property.
Title Deeds of the property if available.
c) Application for transfer of ownership at the District Land Registry
The transfer of ownership of concluded by a simple procedure at the District Land Registry. The application should be submitted in person to the Land Registry together with the following:
Title deeds of the property.
A copy of the Ministerial Council's permission to acquire the property.
The Central Bank's certificate stating that the property was acquired using foreign currency.
Receipts of payments of all property taxes to date (these taxes may include town taxes, sewage tax and road construction tax).
The information needed for this application is:
Name and address of both the seller and purchaser.
The buyer's identity card or passport number.
Particular information about the property.
During the course of the registration procedures the District Land Officer will review the value of the property in order to determine the transfer fees and he may not accept the value of the property as stated in teh sales contract, but as assessed by the Land Registry Values (it is based on the property price in the open market on the day of the original transaction/sales contract). The buyer is liable for the payment of the determined transfer fees.
The transfer fees are calcuated as follows:
Property Value (CyŁ)
Transfer Fees
Accumulated Transfer Fee (CyŁ)
0-50,000
3%
1,500
50,000-100,000
5%
4,000
100,000 and over
8%
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If the property is placed in joint names e.g. the name of a couple (husband and wife) or two individuals, then the purchase value is split into two parts that results in reduced transfer fees. For example:
A property bought for CyŁ100,000 payble fees are:
Property in one name
Property value (CyŁ)
Transfer Fees
Accumulated Transfer Fee (CyŁ)
Up to 50,000
3%
1,500
50,000-100,000
5%
2,500
Total fees payable
4,000
Property in the names of two persons
Property value (CyŁ)
Transfer Fees
Accumulated Transfer Fee (CyŁ)
50,000
3%
1,500 (Husband's share)
50,000
3%
1,500 (Wife's share)
Total fees payable
3,000
Both the seller and the buyer may give a specific power of attorney to a third party to attend and conclude the transfer on their behalf. If all documentation is in order, the transfer procedure only takes a few hours.
