How To Buying Property in Cyprus: A Quick Guide

Buying property in Cyprus has become very popular amongst British investors. The island offers almost year-round sunshine, good quality of life and some very cheap property deals. But before you rush out and take advantage of this sunshine island, there are a few things to consider before making a property investment.

Before you even open negotiations with an estate agent in Cyprus, you must check to ensure that they are fully licensed and insured. All estate agents are required by law to be licensed and the certificate must be displayed in the office. Legal estate agents are members of the Cyprus Real Estate Agents Association (CREAA).

Once you have found your property you will need to decide how you want to pay for it. You can either go for the straightforward option and buy with cash, you can re-mortgage your home if the property is a second home (but do remember that your home may be at risk if you do not keep up with payments) or you can finance your property with a mortgage from a Cypriot bank. A financial advisor experienced in buying property in Cyprus will be able to give you the best advice as to which option to choose.

Regardless of the cost of the property itself and how you finance it, there are additional costs that you will have to fund yourself. The reservation fee is paid to the estate agent or developer once you have agreed on the price and payment terms. Legal fees will also be a major expense (as with buying any property) and you will need to be prepared to pay around 0.75% of the purchase price to cover legal costs. There will also be stamp duty to pay on the contract price. Agency fees are paid by the vendor and you should not be asked to pay any additional fees to cover agency costs.

If you decide to buy a property in Cyprus through a mortgage, there are certain restrictions as to how much you can borrow. Cyprus residents can arrange up to 90% mortgages, although EU residents are required to provide a minimum deposit of 20% of the purchase price. All Cypriot banks charge arrangement fees of between 0.75-1% of the amount of the mortgage and most mortgages are based on a 10 year repayment term.

Once you have paid your reservation fee on a property it will immediately be withdrawn from sale. You now have up to 28 days to do all your searches and surveys and appoint a lawyer to carry out the legal checks and agree a contract. Your lawyer will normally prepare a contract of sale in English, but before signing do check that all the details are absolutely correct. Once the contract of sale has been signed it becomes a legally binding document and you have a further 28 days to complete the purchase.

Buying property in Cyprus is very similar to the system used in the UK, but it is essential that you appoint a lawyer familiar with Cypriot law and procedure. As long as you ensure that the process is followed to the letter and every detail is correct before making a final commitment, buying property in Cyprus is a worthwhile investment and there are still plenty of bargains to be had on this beautiful island.

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