Owning your own home in the sun is a dream for many, and Cyprus makes a perfect location to make this dream come true. However, buying a property in Cyprus requires research and preparations.
Our guide on property purchase in Cyprus will help you understand the process and what you can do to avoid possible problems.
Inside the guide:-
- Buying a property in South Cyprus
- Can foreigners buy a property in South Cyprus?
- Buying a property in Cyprus after Brexit
- Is it safe to buy property in Cyprus?
- Do I need a lawyer when buying a property in Cyprus?
- Legal process when purchasing a property
- How much does it cost to buy a house in Cyprus?
- Buying a property in North Cyprus
- Is it safe to buy a property in North Cyprus?
- Can foreigners buy a property in North Cyprus?
- Types of Title Deeds
- Legal process and extra costs when buying a property in North Cyprus
Buying a property in South Cyprus
South Cyprus is in the EU, more robust economically, more expensive than its northern neighbour and more popular with the international community as it provides opportunities for doing business with the EU.
Can foreigners buy a property in South Cyprus?
Foreign nationals can purchase property in southern Cyprus without any restrictions; however, you have to apply to the Council of Ministers for permission to purchase a property.
As a rule, most applications get approved, but the paperwork can take a long time. You can sign a sales contract and even register it with the Land Registry Office, but your title deeds won’t be granted until you get your Council of Ministers permission.
To be on the safe side you might want to have a clause in your sale contract protecting your interests in case you are refused permission to buy which is very unlikely.
Buying a property in Cyprus after Brexit
UK citizens can buy a property in Cyprus following the same rules and regulations as any other non-EU citizens.
There are certain restrictions regarding the size of the plot of land you want to buy and how long you can stay in your Cyprus home without officially becoming a resident.
You can stay in any of the EU member states for 3 months out of every 6 months without a visa. If you want to stay longer, you will have to apply for permission to do so.
As to the size, your plot of land shouldn’t exceed 4,014 sq m.
Getting a mortgage can also be a bit trickier, so it’s advisable to use a reputable international broker.
Is it safe to buy property in Cyprus?
It’s safe if you do your due diligence and understand the process. Here’s a list of precautions to take to avoid pitfalls when buying a house in Cyprus:
- Always make sure the land is not mortgaged;
- Use an agency with a good reputation;
- Have a look at any properties already finished by a developer if buying off-plan to ensure you know what standards you can expect;
- Make sure you understand how your property will be maintained;
- Check that your lawyer is independent and not in some way related to the developer/vendor or estate agent.
Do I need a lawyer when buying a property in Cyprus?
It is highly recommended to employ a lawyer experienced in dealing with all the complexities of paperwork and, most importantly, tracking down the property’s title deed before proceeding to buy.
Very often developers take out mortgages on land or property. If you sign a contract with such a developer, and they go bankrupt, you are likely to become liable for that mortgage. This has affected many buyers in southern Cyprus and is a very traumatic experience for those affected.
Have your lawyer conduct checks for mortgages placed on the land. Remember that if you sign a contract for a property in Cyprus with any financial claim or a mortgage on it, you will not obtain the deeds in your name until the mortgage is paid off, so tread very carefully indeed.
Make sure your lawyer does not represent the selling side (private vendor or developer) as well because this can be common practice and is very dangerous in terms of ensuring your best interests are looked after.
If you are buying a property in Cyprus that needs renovation, check access to utilities and services and that you will be able to develop/improve the property according to local planning laws.
Legal process when purchasing a property
When you find the property you wish to buy, make an offer to the current owner through your agent.
If both sides are happy to proceed, a formal contract of sale is drawn up in writing and translated into all the languages necessary. It should then be deposited with the relevant District Lands Office within two months of being signed by both parties.
The buyer usually puts down a deposit of about 10% of the sale price.
The title deed can only legally be transferred, however, once the government has given the appropriate permissions and the imported funds have been certified. The estate agent or lawyer will then register the property in the name of its new owner.
How much does it cost to buy a house in Cyprus?
You should allow for at least an extra 15% on top of the buying price to pay for transfer fees, stamp duties and legal fees. The vendor usually pays the agent’s fees.
Transfer fees depend on a property’s value and range from 3% to 8%.
Stamp duty is also determined by a property’s price. It can vary from 0.15% to 0.20%, but shouldn’t exceed 20,000 EUR.
Buying a property in North Cyprus
Buying property in North Cyprus can seem very attractive price-wise. The Forbes ranked North Cyprus as the top destination for best beachfront buys in 2021.
However, it’s highly recommended to rent first and get to know locations and the quirks of the property market before you commit.
Is it safe to buy a property in North Cyprus?
There have been some changes to the law in recent years in the North Cyprus property market which have made buying a property in the TRNC much safer. Nevertheless, your own due diligence and knowing the process is vital. A reputable estate agent is also a crucial part of the deal.
Here are a few tips to follow when you are property hunting in North Cyprus:
Rather than being tempted by an off-plan offer, you are far better to look at the pre-constructed stock that is either being sold as a resale or something that is completed on an already finished and inhabited site.
Rent first! Why not rent a property in Cyprus first to get a feel for it. And to see whether you would be comfortable committing to the island for the long-term. After all, property is a long-term commitment if you buy it.
What’s more, there is an ongoing dispute between the Greek Cypriots in southern Cyprus and the Turkish Cypriots in Northern Cyprus over who actually owns the land across both sides of the island on which property is constructed.
For example, before the 1974 conflict, the land that Larnaca International Airport is now constructed on belonged to a Turkish Cypriot family.
Following the cessation of hostilities and the division of the island, the Turkish Cypriots inhabited all the land in the North and the Greek Cypriots all the land in the South. Now, generations later, there is still arguing about who owns which land.
As a foreigner, you may have absolutely no desire to get involved with this in-fighting as it really is none of your business. In which case, rent a property or buy a home with the ‘right type’ of indisputable title deeds.
Can foreigners buy a property in North Cyprus?
Foreigners wishing to purchase in North Cyprus are allowed to acquire one property per person, or up to one donum of land (1,338sq meters or 14,400 sq ft). This restriction does not apply when buying foreign or Turkish titled property.
To be able to purchase a property you have to get permission from the Council of Ministry, which is now quite a quick process.
If you want to buy multiple properties as an investment, you have to look at a trust solution and will definitely need professional advice.
Types of Title Deeds
There are several types of title deeds under which land and property are sold in North Cyprus, some of which are considered more desirable than others.
Property or land owned by Turks or Turkish Cypriots before the division of Cyprus in 1974 is sold under Turkish Title. Property that used to be owned by foreigners (Europeans or other nationals) before 1974 is sold under Foreign Title.
Both titles are internationally recognised.
TRNC Title (Kesin Tasarruf Belgesi – Absolute Possession Document) covers properties and lands that were given to Turkish Cypriot refugees in compensation for the land of similar size and value that they lost in the south following the war in 1974.
Should the two sides of the island ever reach a political agreement based on the United Nations’ Annan Plan, properties and lands covered by TRNC Title may be subject to claims for compensation from former Greek Cypriot owners.
However, the compensation will be most likely based on pre-1974 values and be minimal, especially if the lands in question were derelict or grazing lands before 1974.
Most new developments in the TRNC happen on such land.
TDM Title or “Turk Mali Degil” – Not Turkish Title, covers the land that was owned mostly by Greek Cypriots before 1974 and was given to Turkish settlers after 1975. Purchasing a property covered by TDM Title can be a higher risk.
Legal process and extra costs when buying a property in North Cyprus
The process of purchasing a property in the TRNC is quite straightforward. As a rule, two lawyers are involved in the purchase – from the seller’s and the buyer’s side.
A buyer and a vendor agree on the price and the agreement is drawn in English. The agreement specifies the price agreed, time of completion and any other conditions of sale. At this point, the buyer is required to put down a 10% deposit.
The buyer’s lawyer then applies on behalf of the buyer for a permit from the Council of Ministers to purchase the property. When the permit is obtained, the buyer pays the rest of the price and the transfer of all rights of the property into the name of the buyer is signed by the vendor. The transaction is officially complete.
Make sure to budget 3% for stamp duty and a minimum of £1,000 for your solicitor’s fees.
Tax on a property purchase in North Cyprus is 5%.
If you have any questions about living in North Cyprus or buying property there, please, refer to our North Cyprus FAQs page.
You might find useful:
- Living In Cyprus – The Expats’ Guide: take a look at both the North and South of Cyprus to decide whether the island is the right place for you;
- Best Places To Live In The Republic Of Cyprus – most popular expat locations in South Cyprus;
- The Best Places To Live In North Cyprus (TRNC) – most favourite expat locations in North Cyprus ;
- The Expat Guide to UK Pensions Abroad – detailed information about your state, workplace and private pensions when you retire abroad; your options, tax implications and opportunities if you transfer your pension pot abroad or leave it in the UK.