Search the property titles and check for encumbrances
Agency: Department of Lands and Surveys
While this procedure is not required by law, it is common practice to perform due diligence before entering into this type of transaction. To request this information, the buyer requires an authorization of the Seller. In practice the seller goes with the buyer to the Department of Lands and Surveys and requests the information on encumbrances on the property for the buyer.
Time and cost: 1 day, EUR 50 (EUR 20 is paid for the property title search + EUR 30 is paid for the search of any encumbrances (i.e. mortgages, memos, etc.) on a specific property)
Lawyer drafts the sale agreement
Agency: Lawyer
In order to prepare the sale agreement, the lawyer requires the following information: names of the parties, amount of transaction, object, bank loan information (if any), resolution of the assembly of shareholders and/or of the board of directors approving the transaction (in case of companies), any power of attorney granted to the representatives of the seller or the buyer, the memorandum and articles of association of the buyer and the seller, a certificate of directors and secretary of the buyer and the seller, a certificate of shareholders of the buyer and the seller and the certificate of registered address of the buyer and the seller. It is important to point out that the use of a lawyer is not required by law.
The documents below are required by the lawyer when preparing the sale contracts:
- Notarized Power of Attorney of the Company representatives
- Notarized Minutes of the board of Directors
- (3)Memorandum & Articles of Association of the Board
- Certificate from the Registrar of Companies as to the Directors Secretary Shareholders (for Private Companies) and the registered address
Time and cost: 2 days, EUR 750 (EUR 500-1000)
File the contract at the Department of Lands and Surveys
Agency: Nicosia District Lands Office
The deposition of the contract of sale with the Department of Lands and Surveys is mandatory under The Contract Law, Cap.149 as amended (Law no.99(I)/2013) and applies to all sales contracts that are signed from the date of the entering into force of the law, 9th of September 2013 and onward. Furthermore, in pursuance with the Law No. 81 (I)/2011, the buyer is given 6 months from the date of signing the contract of sale to deposit it to the District Land Office of the district where the property is situated.
The objective of this reform is to protect the parties’ interests, especially the buyer’s in case of violation of the agreement. The deposit of contract serves the following objectives:
- It prevents the seller from selling the same property twice.
- If the seller does not perform his obligations ( i.e. he does not come to the land registry to transfer the property), the buyer can apply to the court which issues a decision requiring the Department of Lands and Surveys to transfer the property to the absence of the seller – what is called “specific performance” of the contract ( i.e. if the seller refuses or fails to comply with his contractual obligations).
Time and cost: 1 day, EUR 50
Pay transfer Taxes
Agency: Tax Department
To transfer a title, a certification that all taxes have been paid is needed from the Tax Department. The Tax Department provides receipts for the proof of payment of (1) Stamp Duty (the Director of which is also the Stamp duty Commissioner): Stamp duty is paid based on the purchase price; and (2) Capital Gains Tax: The sale contract is filed for assessment of capital gains at the Tax Department. The market value of the property is determined by the Director of the Department of Lands & Surveys. CGT is imposed at 20% on gains from the disposal of immovable property. The taxable gain is calculated by deducting from the sale price the following: (a) Acquisition cost, or market value at January 1st, 1980 if the asset was acquired before that date; (b) Expenses incurred to improve the property; and (c) Sale expenses, interest on loans and immovable property tax.
Time and cost: 1 day, EUR 2,228.96
Stamp duty as per following fee schedule:
- 0 – 5000 EUR – 0%
- 5000 EUR – 170,000 EUR=0.15%
- over 170,000 EUR=0.2% plus 150 EUR
Obtain Sewerage Board Tax clearance
Agency: Sewerage Board
The seller should apply and obtain a sewerage board tax clearance from the Sewerage Board office evidencing the sewerage board tax on the property to be sold has been paid.
Time and cost: 1 day, no charge
Obtaining the certificate of payment of municipal taxes (property taxes and refuse collection fees)
Agency: Municipality of Nicosia
As art of the property transfer process, the seller is required to obtain a document from the Municipality of Nicosia certifying absence of any outstanding municipal tax obligations (property taxes and refuse collection fees).
Time and cost: 1 day, no charge
Declaration of transfer of immovable property at the Land Registry and issuance of the new title deed
Agency: District Land Office of Nicosia
As proposed by the Law No.81(I)/2011, the sale contract must be registered at the Land District office within 6 months after the signature of the contract. The change of ownership takes place when the declaration of transfer is completed and the property is then registered in the name of the buyer at the Land District office. The original and the copy of the contract of sale must be duly stamped.
The buying Corporation is responsible of paying for the Transfer Tax based on the value of the property as determined by the Director of the Department of Lands & Surveys.
The fees charged by the Department of Lands and Surveyors for the transfer of immovable property are as follows:
- Up to 85,000 EUR = 3%
- From 85,001 – 170,000 EUR = 5%
- Above 170,000 EUR = 8%
Documents to be provided to the Land District Office are as follows:
- Completed Form N270 (Declaration of Transfer of Immovable Property).
- The certificate of registration (title) of the immovable property, which is to be transferred
- Completed Form N.313.
- Proof of payment of all fees, charges and taxes payable for the property under transfer.
- Immovable Property Tax and Capital gains tax (Receipts of payment for these taxes are obtained from the Internal Revenue Department)
- Sewerage Board Tax (receipt obtained from the Sewerage Board)
- Town rate (receipt obtained from the municipality in whose boundaries the property is situated)
- Communal rate (receipt obtained from the community in whose boundaries the property is situated)
The declaration of registration is done after the evaluator at the Registry assesses the value of the property, based on the amount stated in the sale agreement. If the assessed price is higher than the paid amount stated in the purchase agreement, an inspection will be conducted by staff from the land registry. This valuation is required in order to prevent fraud (i.e. state in the sale agreement a lower amount in order to pay less transfer fees).
In case of properties that have an additional Value Added Tax cost on the selling price, then there is a full discount on the sum for title transfer, until 31/12/2016. In the rest cases the title transfer fees if paid prior to the 31/12/2016 then 50% discount is applicable. The changes are due to the amendment of the Transfer Fees Law, Cap. 219, L.115(I)/2015
Time and cost: 2 days, EUR 86,058.47
The fees charged by the Department of Lands and Surveys for the transfer of immovable properly are as follows:
- Up to 85,000 EUR = 3%
- From 85,001 – 170,000 EUR = 5%
- Above 170,000 EUR = 8%
