New Cyprus Legislation enables purchasers to obtain title deedsChristos Paraskevas
The new Legislation
A. Title Deeds
The Cypriot Parliament has recently enacted new legislation with regards to the transfer and issue of separate title deeds of immovable properties purchased in Cyprus and the avoidance or reduction in the payment of transfer fees for the said properties.
The law applies to all cases where a contract of sale to purchase a property was deposited at the relevant District Land Registry Office on or before 31st December 2014. However, buyers who failed to deposit their contract of sale can still benefit from the law, provided they obtain a court order to allow them to deposit their contract of sale at the relevant District Land Registry Office.
According to the new law, where a title deed for the property has already been issued, then (a) if the purchaser has fully paid the purchase price or (b) has paid part of the purchase price and agrees to pay the balance into a special suspense account and provided that the purchaser has fully abided by his obligations under the contract of sale, the Land Registry Office will proceed and transfer the title deed of the property in the name of the purchaser, irrespective of the existence of a mortgage or any other charge on the property due to the seller.
Where a title deed for the property has not been issued yet, then provided that the purchaser fulfils the aforementioned same conditions as set above, he can still file his application for the transfer of the title deeds of his property in his name together with an application for the update of the title deeds of his property that will expedite the procedure of the issue of separate title deeds for his property, again irrespective of the existence of a mortgage or any other charge on the property due to the seller.
B. Transfer Fees
Purchasers of immovable property will be requested to pay transfer fees within 60 days of a notice to transfer the property. If the purchaser pays within the 60 days, he will be entitled to an extra 10% reduction on the transfer fees over and above the 50% reduction on transfer fees already provided if the transfer is made until 31st December 2016. The purchaser also has a choice of paying the transfer fees in 12 monthly instalments.
Purchasers of immovable property in Cyprus that have paid VAT on the purchase price of their property will not incur any transfer fees if such transfer takes place until 31/12/2016.
The provisions regarding the 50% reduction in the payment of transfer fees apply as well to new purchases of properties for which the transfer of title deeds takes place until 31st December 2016.
C. Capital Gains Tax
In addition, any sale of immovable property in Cyprus that will have been purchasedfrom 16th July 2015 until 31st December 2016 will incur 0% capital gains tax.
Our Real Estate and Immovable Property Law department has already been receiving requests from purchasers that wish to benefit from the provisions of the new legislation and obtain title deeds for their properties in Cyprus and pay zero or reduced transfer fees, as well as from new purchasers that want to take advantage of the 0% capital gains tax provisions.