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Information for Cyprus Expats on the Cyprus property transfers and title deeds procedures
Vouni Village House
It is noticeable that title deeds are issued at an increasing rate, yet, according to the Lands Office, only 21% of thοse informed of the issue, respond to have their properties transferred. The state of the economy and the lack of funds by the buyers, is one of the reasons, but, again, after these 3 years of an uphill battle to secure titles, for the buyers not to respond, it makes one wonder how serious the financial situation is.
It is a major asset for a property to have a title, whereas the retention of the title in the developer/sellers name, entails some risks and added costs. Risks because no one knows the future of the seller and in addition, the owner charges the buyer with property tax plus interest etc etc for which the buyer may be tax exempt.
What we have found here is that people who at long last got hold of their title, do not wish to have it transferred on their name in the hope (if they wish to sell it to another) to make the new buyer pay his own (first buyer) as well as the second buyer transfer fees. This is not logical. Every time that the transaction is made, transfer fees are due, even if no actual transfer is made. There is a way out (not 100% legal nor tested so there is a risk) in case where the first buyer wishes to sell to another (second buyer) to have the registered owner/developer transfer the property directly to the new-second buyer. For this to have some chance of success (we stress that nothing is certain) we suggest:
The cooperation of the owner/original seller is required. So check if in your sales contract there is a proviso that you can ask the developer/owner to transfer the property to another person’s name.
If the developer cooperates the first buyer must:
(i) Withdraw his sales contract from the Lands Office
(ii) The first buyer must enter into cancellation agreement with the developer/registered owner
(iii) Secure a tax clearance certificate from the Income Tax people.
(iv) Pay all property/sewage/Municipal taxes due, up to the date of cancellation including common expenses etc outstanding.
(v) Pay an agreed cancellation fee to the registered owner.
Once this is done the registered owner/developer can enter into a new sales contract with the second buyer, with then, the second buyer, having to deposit his sales contract with the Lands Office etc. In this case there is a good chance that only the second buyer pays transfer fees and the first buyer is off the hook.
The other thing that we note is that on the property’s first buyer add his transfer fees (which may or may not pay) and ask for an increased price as part of the sales price. The sales price is determined by demand and supply and it is not a matter of adding up one’s costs. Something with a title, surely should command a higher price, but at these times of non-sales, it is important to have the title as an added plus and not charge for it if the market does not respond. We feel that if a potential buyer is made to pay 2 times the transfer fees, most likely the deal will be lost. Bear in mind that the transfer fees are charged on a scale as shown below and it is based on the value at the time of sale. This could be the declared sales price, or the Lands Office valuation if it thinks that it is below the market value at the time (if one disagrees with the Lands Office, he can object through the court – see our previous articles on the subject).
Transfer Sale Fees
Up to €85.430 3% €2.563
€85.431 - €170.860 5% €46.834
€170.861 and over 8%
So, in conclusion, if you price your property correctly and you wish to sell it, do not come up with “innovative charges”, which are outside the market conditions notwithstanding how very logical sound you. Ask what the market can afford and either you will be involved in a transaction of double transfer fees, or try the methodology given above. We do remind you that you should involve a solicitor in this case.
© Antonis Loizou website
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