But, as with any foreign property purchase, you need to be aware of the differences and it is certainly worth seeking professional advice to avoid any pitfalls that could be potentially financially damaging. After you have found the property in Cyprus that best suits your needs, the first step before you buy is usually the signing of a preliminary contract.

The purchase procedure in Cyprus is based upon the British legal system, where a solicitor must be engaged to draw up the contract and perform the conveyancing. Contracts are subject to clear title being established and any necessary government permits.

Builders, developers and estate agents often have ready-made contracts that are drafted to protect their own interests, which should be scrutinised by your lawyer. Alternatively ask them to raise their own contract – which is preferable. You should also instruct your lawyer to obtain the necessary permits and not leave it to an estate agent or developer. It's also possible to sign an option or reservation agreement. This reservation fee is not a deposit and is usually CY£1,000 or CY£2,000 to secure a property for a period of time (for example, 30 days) – while waiting for funds to arrive from abroad. If you pull out of the purchase this fee is normally lost.

Buying a new finished or resale property
When you sign the contract for a new or resale property or a plot of land you must pay a deposit. If you are buying a resale or a new finished property (that is, not off-plan), you usually pay a deposit of ten per cent when signing the contract (the actual amount may be negotiable), with the balance paid on completion when the contract of sale is signed. Note that before signing a contract it is essential to have it checked by your lawyer. One of the main reasons is to safeguard your interests by including any conditional clauses in the contract.

Deposits
Deposits are refundable under strict conditions only, most notably relating to any conditional clauses such as failure to obtain a mortgage, although a deposit can also be forfeited if you don't complete the transaction within the period (for example, 30 to 60 days) specified in the contract. If you withdraw from a sale after all the conditions have been met, you won't only lose your deposit, but may also have to pay the estate agent's commission. Contracts are only cancelled when either party is 'in breach' for not fulfilling the terms stipulated.

Conditional clauses
Contracts, whether for new or resale properties, usually contain a number of conditional clauses that must be met to ensure the validity of the contract.

Buying off-plan
When buying an uncompleted property 'off-plan', that is, property still to be built or which is partly built, payment is made in the following stages:
* 30 per cent on signing (minus the reservation fee)
* 20 per cent when concrete skeleton and roof is finished
* 15 per cent when bricks and plastering is completed
* 15 per cent when tiling and carpentry is completed
* 10 per cent carpentry, sanitary ware etc
* 10 per cent on completion with CY£500 held back until title deeds are ready

If a property is already partially built, the builder may ask for a higher initial payment, depending on the stage of completion. The contract contains: The timetable for the property's completion;   Stage payment dates;  The completion date and penalties for non-completion;  Guarantees for building work; Details of the builder's insurance policy;  A copy of the plans and drawings;  Technical specifications; and  Most important of all a copy of 'The Title Deed'.

Tax advantages
Legal safeguards: The legal system in Cyprus is largely based on the British system and safeguards the rights of purchasers in many ways. Once the contract of sale is signed and deposit paid, the contract is registered at the land registry and a legal procedure called 'specific performance' takes place which protects the ownership. This protects the ownership rights until the title deeds are issued and transferred to the buyer's name. The contract in the hands of the land registry can not be withdrawn by anyone, the property can not be leased, sold, transferred or mortgaged. Only the purchaser can alter this status.

Inheritance and capital gains tax
Before registering the title deed, you should carefully consider the tax and inheritance consequences for those in whose name the deed will be registered. Property can be re-registered in a single name, both names, the name/names of children or your partner.

And finally
The above is a brief summary of the procedure involved in buying your home in Cyprus. It is designed for information purposes only and should not be taken as financial advice. You are strongly advised to obtain independent financial advice prior to entering into any contract.

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Some information in this guide is based on the book Buying a Home in Greece and Cyprus by David Walkiden
This guide was updated by Cyprus Property Services

Article first published in June 2006