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Once an offer is made
on a property, it is normal to pay a deposit of between
CY£1,000 and CY£2,000. Upon signing the contract
the purchaser pays 20 to 30% of the value of the property,
and the balance thereafter. Officially, permission to
buy a property in Cyprus must be sought in writing from
the Council of Ministers. The procedure is something
of a formality and you make take possession of the property
while awaiting official permission. The title deeds are
transferred into the buyer´s name by registering
the papers at the land registry office, either in person
or through a power of attorney.
Legal
The legal system in Cyprus is based on the British
legal system, as is the land registry. Transfer taxes
on the purchase of a property are 3% on the first
CY£50,000,
5% on CY£50,001 to CY£100,000 and 8% on
CY£100,001 and over.
Stamp duty is levied at CY£1.50 per CY£1,000
on the price, up to the value of CY£100,000 and
thereafter at CY£2.00 for every additional CY£1,000.
Annual
property tax is charged at 2 to 3.5% of the market
value of the property. In the case of individuals,
however, the first CY£100,000 of the house
value is tax exempt.
The legal fees are approximately CY£500
and cover the review and alteration, if required
of the
Sale Agreement, revision of the General Agreement
(which regulates the use of common areas, where applicable)
and submission to the land registry for specific
performance.
Southern
Cyprus
Currency
The Cyprus Pound is the currency in Cyprus, and has
been used since 1879.
Northern Cyprus
Currency
In North Cyprus you can pay
with several hard currencies
such as UK sterling, Cyprus
pound, US dollar or Euro.
All these currencies may
be used in shops, hotels
and restaurants, or can be
easily exchanged. Sterling
(GBP) is the best form of
currency.
Travellers Cheques are accepted
and easily exchanged in banks,
exchange bureaux and hotels.
Credit
Cards and ATMs are widely acceptable and practical,
you can pay with them in
many stores, restaurants,
supermarkets or petrol stations.
From ATMs (automated teller
machines) cash can be withdrawn
at any time, although with
some bank charges applied.
Banking
North Cyprus is well served
by commercial banks, most
of which are branches of,
or susidiaries of, the major
banks operating in Turkey.
There is also an HSBC in
Kyrenia.
It is easy to open an account
and you can open accounts
in TYL or Sterling or both.
Transfering money from the
UK typically takes three
days. Recently the banking
sector has started to expand
its range of financial services,
although banks do not have
the wide portfolio of financial
products which one is accustomed
to in the UK.
Southern Cyprus
Mortgages
Based on the valuation
or purchase price (whichever
is lower) of your Cypriot
property, it is possible
for you to take a loan
for up to 70% of its value
in all major currencies,
for the purpose of purchasing
a new property or re-mortgaging
an existing one for home
improvements (a re-mortgage
for any other purpose will
be looked into on a case
by case basis).
The minimum loan that
will be considered is £20,000
and the maximum is CYP
150,000 over a repayment
period of no more than
30 years. This is available
to individuals up to
the age of 65 . Current
interest
rates as at 11 th July
2003 are from approx
2.00% + LIBOR.
Northern Cyprus
Mortgages
North Cyprus Financial
Services, are able to
arrange mortgages with
lenders based in the
UK secured only on the
property here in the
TRNC. There is no distinction
between title deeds (Turkish,
Esdeger, TMD) and both
completed properties
and new builds may be
financed. Currently advances
of up to 70% of new builds
and 80% of finished products
may be advanced at rates
of 2% above UK base,
all subject to status.
The life of the mortgage
may extend up to twenty
years.
Northern Cyprus
Purchasing A Freehold
Property Process:-
-
When you have decided
on a property, agree
a price.
- Arrange
a meeting with
your appointed
solicitor
who will draw up
contracts stating the terms of
the sale ie: price,
timescale, vendors & purchasers
details, stage payments
etc.
- When both parties
happy with contract vendor & purchaser
sign.
- Purchaser
pays 20% deposit
- Purchase permit is
applied for by
your solicitor
to the Council
of Ministers which takes approximately
12 months. Once
purchase permit has been
received
the remaining
balance is
due from purchaser.
- When the vendor receives the final payment
the Title deeds will be
signed into
the purchaser name
and the sale
is officially completed.
- If purchasing a leasehold
property the
whole process is much the
same as purchasing
a freehold.
- The exception being you apply either
directly or via your solicitor
to the Minister
of Tourism
who will
grant the lease rather then
applying to the Minister of
Interior
for a freehold
property.
Purchasing
A Leasehold
Property
Process:-
- When
you have
decided on
a property,
agree a price.
-
Meeting with your appointed
solicitor
for drawing up of the contracts in
which
both vendor & purchaser
must
sign. Application to Minister
of Tourism
applied
for.
- Deposit
of 10
- 20%
is held
for the
vendor.
- Once application
has
been granted
the
sale can continue
to
completion with
the
balance remaining
being
paid
and
the lease
being
transferred
into
the
purchaser's name.
Land
Land
in Northern
Cyprus is
measured in
donums. 3
donums equals
1 acre, 1 donum
equals 1338sq
metres. Foreigners
are limited
to 1
donum per
person or
1 house
(husband and
wife count
as one
unless they
have different
surnames).
Extra
Costs:-
In
line with
the rest
of the
world there
are some
additional costs
involved when
purchasing a property
in North
Cyprus.
They
are as
follows:
-
Solicitor
- £1200
- This is
a one off
fee for
the conveyance
work.
- District
Land Office
(DLO) - 6%
of the
estimated value
of the
home, this
is usually
lower than
the sale
price and
is based
upon the
cost to
replace the
building.
- KDV
(vat) - 5%
This is
a one off
cost which
the majority
of the
builders in
Northern Cyprus
include this
in the
purchase price
but this
must be
stated in
the contract.
- Council
Tax - 1%
- This is
a one off
cost at
time of
purchase, with
no further
payments of
council tax
in the
future.
- Mains
connections - Electricity £500 & Water £200
- Approximately
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