Cyprus property transfers and title deeds procedures

Cypriot title deeds are being issued at a faster rate than ever but according to the Cyprus land registry, only 21% of people told the deeds are ready for issue respond to have their properties transferred.

 

The present situation (2011) of the Cypriot economy and the lack of funds by the buyers, contributes to the reasons, after 3 years of people clamouring to secure titles then the buyers do not respond, one wonders how serious the ownership of title deeds situation really is.

 

It is a major asset for a property to have a title in the owners name, the retention of the title in the developer/sellers name, entails some risks and added costs. Risks because no one knows what might happen to the seller and in addition, the title owner can charge the “rightful owner” with annual immovable property tax plus interest for which the “rightful owner” may be tax exempt.

 

Every time a property is sold, similar to UK stamp duty, transfer fees are due, even if no actual transfer is made. There is a way out (not 100% legal, nor recommended by us, nor tested in a court so there is a risk) where the first buyer wishes to sell to another (second buyer) to have the registered owner/developer transfer the property directly to the new-second buyer. For this to have some chance of success:

 

The co-operation of the owner/original seller is required. Probably the developer who sold the property in the first place. Check if in your sales contract there is a provision for you to cancel and ask the developer/owner to transfer the property to another person’s name.

 

    If the developer co-operates the first buyer must:

    1.  Withdraw his sales contract from the Lands Office

    2.  The first buyer must enter into cancellation agreement with the developer/registered owner

    3.  Secure a tax clearance certificate from the Income Tax people, paying any capital gains.

    4. Pay all property/sewage/Municipal taxes due, up to the date of cancellation including common expenses outstanding.

    5. Pay an agreed cancellation fee to the registered owner, in this case probably the developer as above.

 

 Once this is done, the registered owner/developer can enter into a new sales contract with the second buyer, depositing his sales contract with the Cyprus registry office. In this case, there is a chance that only the second buyer pays transfer fees and the first buyer does not. 

 

It is a risk that the district land registry will under the current economical situation, after all they want all the money they can get, not allow it and force the original buyer to pay transfer fee’s, in this case check that the developer will refund the cancellation fee you have paid which can also be substantial.

 

Transfer fees are charged on a scale as shown below based on the value at the time of sale. This could be the declared sales price, or the district land registry office valuation, they look to see what price similar properties have sold for recently and can, as happened to us, increase the value on which the fee has to be paid, you can appeal but all this takes time.  

 

Transfer Sale Fees

Up to €85.430 3% €2.563

€85.431 – €170.860 5% €46.834

€170.861 and over 8%

 

We always advise you use a solicitor in these cases unless you understand the system and what needs to be done; it also helps to know someone in Cyprus who can assist you. Please contact us for recommend solicitors that are trustworthy.

 

A calculator is available to calculate fees on the government web site but this is provided as a guide only.

 

Please note: we do not advise or suggest you take any of the above risks, the decision is entirely yours for which we do not accept any responsibilty.