Buying A Cyprus Property Still Under Construction
Strange as it may seem to actually buy a Cyprus property under construction before it is even built that is the way things are done in Cyprus. Most Cyprus developers don't even lay any foundations until some of the houses have actually been sold and 25-30% of the cost of the property has been paid. This is great news for them because they that way they always have a steady supply of cash coming in to pay for the Cyprus property whilst still under construction.
It may seem like a strange idea to actually buy a property before it is even built but that is the way things are done in Cyprus. Most Cyprus developers don't even lay any foundations until some of the houses have actually been sold and 25-30% of the cost of the property has been paid. This is great news for them because they that way they always have a steady supply of cash coming in to pay for the ongoing Cyprus property construction costs. The balance of your Cyprus property payments are then expected to be paid in three stages of 25% each as the different phases of construction are completed. These are usually: the shell, roof and plaster then the final interior finishes such as tiling ect.
Despite the disadvantages of having to pay for most of your Cyprus house whilst its still under construction and having never set foot in it this system has worked extremely well in Cyprus for many years. The obvious difference between buying Cyprus property whilst under construction and U.K. property purchase is that you only pay on completion in the U.K. Of course any developer Cypriot or otherwise will require some kind of a deposit or reservation fee. At the time of publishing this article a developer offering Cyprus property under construction would require around £cy2000 to reserve a plot for thirty days after which time the first payment of 25% would become due.
When a contract is raised to purchase cyprus property under construction by a developer you will need to employ the services of a local solicitor. The good news is that the legal system in Cyprus is very similar to that in the U.K. and most of the lawyers or their staff speak very good English too. You should check your contract carefully and go over anything you are unsure of with your solicitor before you sign it. The contract not only forms an agreement between yourself and the developer as to the full specifications of your Cyprus villa or apartment it also constitutes your right of ownership to the property untill a separate title deed is drawn up.
Because most Cyprus property construction is carried out on rural or former farming land there is only one deed passed onto the developer. This is the reason why you are unlikely to receive your title deeds until all the properties on the development are completed and all the services ect have been installed. This main purpose of the contract between yourself and the developer of your Cyprus property still under construction is to bridge that gap thus clarifying your rights of ownership. Once seperate title deeds are raised for each individual property they will then override the contract.
There are a couple of important issues you should be aware of however before you dive in and part with your life savings. Firstly, all the properties within a development must remain unaltered until the land office has issued the separate title deeds. In other words any extensions or immovable structures that were not on the original plans before the Cyprus developer started construction of the property could jeopardize the title deeds for every property on the development. This could even include such things as barbecue areas and pergolas with solid cover such as planking or tiles so it's worth keeping an eye on what your neighbours are up to.
The other thing that catches many foreign buyers out a few years down the road is the cost of obtaining their title deeds! Thats right, you will have to pay a property tax based on the original purchase price of your Cyprus property whilst it was under construction. This is based on a sliding scale related to value of the property and at the time of publishing this article was as follows
3% on the first CYP50,000, 5% on the next CYP50,000 followed by 8% on any further amount over CYP100,000. You would be wise to make provision for these "hidden costs" when budgeting for the purchase of any Cyprus property still under construction and even some resale properties too.
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ABOUT THE AUTHOR
Kevin Moore lives half the year in Cyprus where he writes regular articles about this beautiful Island including tips on buying Cyprus property. Visit the web site to learn more Cyprus Property Construction