ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN CYPRUS]

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A special form of interest that may be created over real estate and provided by Cyprus law, is the “life interest reservation” ( in Greek: Δικαίωμα Επικαρπίας ). This confers to the stipulated beneficiary, the right to possess, enjoy, receive the income from and exploit the property for the period of his life while the title is in the name of another. Leases Real estate in Cyprus may be leased under private agreement between the owner and the lessee. Long-time leases (i.e., leases for a period of 20 years), are deposited with the Land Registry Office and registered as a “burden” or “interest” over the property. Even if the property is sold or mortgaged, it carries with it

depends on the complexity of each case. An acquisition may be completed fast (in a few days), or where complexities exist (e.g., mortgages, banks, multiple sellers) within a longer time. It is common for real estate agents to be involved in real estate transactions. The estate agent profession is regulated in Cyprus and under the law the existing estate agents’ fee cannot exceed 5% of the sale price plus VAT. The customary is for the agent ’s fee to be paid by the seller (except where agreement exists for other arrangement). The acquisition of a real estate property in Cyprus includes the following steps: 1. Reservation . Usually this effected by a “reservation agreement” whereby the seller grants to the buyer an option to purchase the property within a certain period in consideration of a reservation fee. 2. Property Due Diligence . It is strongly advisable to conduct a due diligence on the ownership status of the property. Among other checks, the process includes review of a recent official Recent Land Registry search certificate, and copies of the planning and building permits. Where the property purchased includes a building, expert opinion (from architect or civil engineer), is also advisable to be obtained. 3. Sale and Purchase Agreement. The sale and purchase agreement include the final terms and conditions of the agreement between the buyer and the seller. 4. Stamp Duty. The sale contract must be stamped by payment of the applicable stamp duty calculated on the purchase price (at a rate of 0.15% for €5.001 - €170,000 and 0.2% from €170,001 and over). Stamp duty is customary to be paid by the purchaser.

the registered lease. 4. Types of Properties

The most common types of real estate property in Cyprus are plots of land, houses, flats, commercial and industrial properties (such as office space, shops, and industrial premises). Plots of land and buildings are categorized by the planning department as residential, agricultural, commercial, industrial, tourist, forestry or of other special or protected zone. The permitted use of the property depends on the planning zone that it falls in and the permitted uses for that zone. Cyprus has adopted EU Directives for the protection of the environment, including for water quality, atmospheric pollution and climate change, noise, nuclear radiation, waste disposal, conversation of flora and fauna and assessment of the environment impact of proposed projects in the process of issuing the required permits. B. IN PRACTICE: ACQUISITION OF REAL ESTATE The required time for the completion of acquisition of immovable property in Cyprus

ILN Real Estate Group – Buying and Selling Real Estate Series

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