Purchasing - costs involved

Buying a property in Cyprus is like any house purchase, there will be costs involved, costs that are not immediately obvious, so here is a checklist of what you are likely to encounter. Some of these costs are covered in other sections.

The first thing to remember is that all prices on this website and others offering Cyprus properties are in Cyprus Pounds, so once you have reckoned up your costs convert them to Pounds Sterling for your convenience. You are able to search in UK sterling or Euros by selecting this option in our search facility.

1. Cost of getting here You may require more than one inspection trip whilst your property is being constructed, try to come out in the off peak season as airfares are much cheaper than in the summer time or other holiday periods.

2. Reservation fee Once you have selected the house of your dreams then all agents and developers will ask you for a reservation fee. This takes the property off the market and ensures that it will not be sold to anyone else. Too often people have asked to have time to think it over for a day or two only to find that the property they wanted has been sold whilst they think about it!

The amount required is only normally around CY£2,000 and payment is accepted by cheque, cash or credit cards. For credit card payment there is normally a surcharge. This reservation fee is normally refundable if you do not proceed, but make sure you have that in writing.

3. Legal Fees This can vary but reckon on paying around CY£1,000 or in some cases 1%. Do try to negotiate and get more than one quote.

4. Contract of Sale This will be prepared by your solicitor and is covered within their fees. Within 30 days of signing you will be expected to pay up to 30% of the agreed sale price, less your reservation fee. Also payable at this time is the Stamp Duty, which in the case of a CY£100,000 property would be (CY£1.50 x 100,000) CY£150

Also in the Contract will be the payment schedule, ordinarily it would be along such lines:

Reservation fee CY£2000
Initial deposit 30% of sale price (less reservation fee). On Contract 2nd payment 30% of sale price 6 months later or when framework is erected 3rd payment 30% of sale price 6 months later or when roof and walls are completed 4th payment 10% or balance of sale price on completion or 1 month after completion

There will be some variation on payment terms according to how long the build time is but the schedule should be agreed during negotiation and included in the contract of sale. Most developers are fairly flexible in agreeing payment terms that fit in with your particular financial circumstances so don't be afraid to ask.

5. Off Plan Investments For most of our off plan investments the payment schedule will be designed to suit the buy to sell investor and could be along the lines of 30% deposit and then no further payment until completion. Each project varies and full details are given on request.

6. Bank Charges Some banks and lenders will charge arrangement fees for the setting up of a loan facility as well as exchange commission for converting currency. Make sure you ask what these are likely to be. Typically they may charge 1% of the loan amount for arranging this, so in the case of a 70% loan on the CY£100,000 property, this would be CY£700 plus any commissions. Try to make sure you exchange your currency at a time when the exchange rates are most favourable, it could save you a considerable amount. By opening two accounts, one Sterling and one in Cyprus Pounds you can take advantage of currency fluctuations by transferring from £Sterling to CY£ and then paying according to the payment terms agreed with the vendor.

7. Property Transfer Tax This is only payable when the Title deeds are transferred into your name. In the case of a re-sale this could be effective as soon as you take possession of the property, in the case of a new build it could take up to three years. Make sure you ask this question when signing the contract. For your CY£100,000 property this would amount to, (CY£50,000@ 3% and CY£50,000@ 5%) CY£3,800

Costs to consider after you take possession of your property.

OK so you have the keys to your dream home and now what? Well you will need to furnish it of course and the cost will depend upon your intended use. Is it to be a holiday home strictly for your own use? Will you let it out to receive some rental income? Is it to be your permanent residence?

Furnishing For a three bedroomed home for holiday use then a budget of CY£6,000 should be sufficient. As for permanent living then that depends on your taste and budget.

Maintenance Charges for common services will vary according to the development, but reckon on somewhere between 250 - 500CYP per year.

Management costs for renting out your property As a guide, if you use an agent to find a tenant on a long term lease then the fee is usually around one months rent. For short term holiday lets, a company would charge up to 25% of the rent and that will include weekly cleaning, collection of tenants from airport, payment of utility bills etc.

Agents Info - Cyprus (A.I.C.)
2nd Floor
145-157 St John Street
London
EC1V 4PY
URL: www.agentsinfo.co.uk

Tel: 00 357 25 581 679
Fax: 00 357 25 581 674
Email: sales@agentsinfo.co.uk