INTRODUCTION

The favorable location of Cyprus at the crossroads of Europe, Asia, the Middle East and Africa, together with the fact that Cyprus is a full member of the E.U. as of May 1^st, 2004, its safe and protective legal system, the excellent infrastructure the high standard of legal, banking and accounting services provided, the continuing development of the island, the extensive use of the English language, the excellent climate and the hospitality and friendliness of the locals, are some of the reasons that established Cyprus as an ideal centre for both business and pleasure and thus attracted to the island a considerable number of individuals and foreign investors interested in immovable property.

SERVICES PROVIDED BY MARIA S. TAKI LLC

For foreigners wishing to invest in immovable property in Cyprus it is advisable to seek and obtain professional legal advice and guidance, to help you through the complex proceedings and formalities and also to avoid any unpleasant consequences.

We have vast experience in Real Estate and Property Law, offering a wide range of services including:

• • • Search at the Land Registry Office to ascertain the property is free from any burdens, charges or encumbrances.
    • Negotiating and Drafting of Contracts.
    • Introduction to a Banking Institution and negotiating and advising on loan and other financing arrangements.
    • Stamping of Contract.
    • Depositing Contract at the Land Registry for Specific Performance purposes.
    • Submitting the application and all relevant documentation to the pertinent authority for obtaining the approval to acquire immovable property ( for third country nationals).
    • Representation at the Land Registry and/or any other authorities for the title deed formalities.
    • All other relevant services.

LEGAL SYSTEM

The legal system in Cyprus is generally based on common law and our legislation is, to a large extent, modeled on the respective English legislation. However, in the field of Immovable Property Cyprus legislation and the legal system in general is considerably different than the one applied in the UK.

First of all, the protection of ownership is safeguarded by the provisions of the Constitution, the ultimate Law of Cyprus, which establishes the equality of all persons and the respect for human rights, including the right to ownership, without discrimination.

According to Cyprus Law, Cypriots, as well as foreigners can enjoy all rights relating to ownership of their property without any interference either from the State or individuals.

ACQUISITION OF IMMOVABLE PROPERTY

• Cypriots & E.U. citizens living in Cyprus

Under Cyprus Law, Cypriots or persons of Cypriot origin as well as EU citizens who have their permanent residence in Cyprus are allowed to acquire any property without any restrictions.

The residential status is ascertained by the District Offices and is obtained when a person resides in Cyprus for a total period of 185 days per year or more.

• EU citizens

EU citizens have no restrictions in purchase immovable property in Cyprus. All citizens of the EU are treated equally with Cypriot citizens regardless of their residential status.

• Third Country Nationals 

According to Cyprus Law, third country nationals must obtain the permission of the Council of Ministers prior to the acquisition of real estate property.

A foreigner, the law uses the term ‘alien’, is any person who is not a citizen of the Republic, including an alien controlled company. The term does not include foreigners of Cypriot origin, or the non-Cypriot spouses of citizens of the republic.

Acquisition of real estate property includes:

• • • Transfer of title deed.
    • Long lease for periods of more than 33 years.
    • The acquisition of shares in a company that owns immovable property, if such an acquisition results in the company becoming controlled by foreigners.
    • The establishment of a trust or any type of set-up, which is connected with the ownership of real estate, for the benefit of a foreigner, including tax benefits.

Although the proceedings for the obtaining of the permission might need a considerable amount of time (2 months) to be fulfilled, purchasers are entitled to occupy their properties until then.

Also, any contract for the purchase or lease of property is valid even if the Council rejects the foreigner’s request for permit. As such, when purchasing a property, it is advisable for the relevant contract of purchase to include provisions for such an event so as to secure a refund of any money paid or any other remedy.

The application to the Council requires information about the personal details and financial standing of the applicant and particulars of the property and its present owner. Also it must be accompanied by a number of legal documents.

As a general rule permission is granted to bona fide applicants provided they have:

• • • No criminal record in their country or in Cyprus.
    • The financial means to support themselves in Cyprus.

Other Restrictions:

• • • The acquisition of an Apartment and/or a House and/or Villa;
    • A Plot of Land and/or Commercial Property (e.g., a Shop or Land which is not divided into other plots with an area of approximately 4,000 square meters);
    • A residence unit and/or a shop which does not exceed 100 square meters;
    • A residence unit and/or an office which does not exceed 250 square meters;
    • Non-EU Nationals are not allowed by the law to obtain a permit for the acquisition of Agriculture Land; and,
    • In the case of a married couple, only one permit will be granted, as they are considered one applicant.

SPECIFIC PERFORMANCE

One can wonder about the safeguards of a transaction between a seller and a purchaser, especially when the purchaser is not allowed to transfer the acquired property onto his/her name, sometimes for a long period of time after payment of the consideration, as in the case of a purchaser waiting for the several formalities to be completed.

According to the provisions of Specific Performance Law, the purchaser of immovable property may secure the transfer of the acquired property on to his/her name by depositing a duly signed and stamped copy of the contract at the Land Registry within two (2) months from the signing of the contract.

By depositing the contract to the Land Registry, the purchaser prevents the owner from transferring the property elsewhere for as long as the contract is valid and legally effective. Note that no burdens, charges or encumbrances can affect the right of specific performance after the contract has been deposited with the Land Registry.

Depositing a copy of the contract to the Land Registry gives the purchaser the right to seek “specific performance” of the terms and conditions of the contract and thus to register the property on to his/her name, even though the owner may not be willing to accommodate such procedures.

FEES AND CHARGES

Usually the relative fees and charges for the acquisition of Immovable Property in Cyprus are paid by the Purchaser. These include legal fees as well as transfer fees, stamps and other fees imposed by the Cypriot authorities.

Transfer Fees

When registering the property under his/her name, the purchaser will be liable to pay the following transfer fees, calculated according to the property’s market value: