Advice and suggestions before and after the sale of property
The Cyprus Association of Estate AgentEntrepreneurs advises us on what we should do to transfer our property, as well asabout the necessary preconditions that we have to follow.
TRANSFER OF PROPERTY
Transfer of propertyis the transfer of ownership of a property from one person to another, an unintentional act of both the owner and the buyer.
According to the provisions of the Sale of Land (Specific Performance) Law,a purchaser of immovable property can secure the transfer of the acquired property on his name, depositinga duly signed and stamped copy of the sales contract at the Land Registry, within 60 days after signing the contract. By depositing the contract at the Land Registry, the purchaser prevents the vendor from transferring the property to any other name or changing it, for as long as the contract is valid and enforceable. The buyer has to pay the stamp duty tax based on the contractual purchase price which are from 1.5% for a purchase from € 0 – € 170860.14, and 2% above € 170860.15. The contract should be stamped within 30 days from the date ofits signing, to avoid paying a fine and interest. The sellershouldclarifyhistaxationwithin 30 daysofsigningthe sales agreement,otherwise he willpay interests.
NECESSARY PRECONDITIONS BEFORE THE TRANSFER TO THE IMMOVABLEPROPERTY TAX
The seller should have all his tax accountsdeposited. Atthe Immovable Property Tax Department, certain forms must be completed to indicate the property of the seller (IR303) and his personal information (IR163). Both the buyer and the seller will sign the form (IR401) (in case that there is a stamped document, the buyer does not sign) which states the selling price, the way the property was acquired and if there are any costs with receipts / invoices e.g. the commission of a registered estate agent. The tax issuer will then go through the form andestimatethe analogous taxation, if there is any. The first € 17,860.01 is tax-free per person,only once. If it is a residence used for home ownership by the seller, abovefive years, there would be tax exemption up to € 85, 430, 07, while for professional farmers the tax exemption amounts to € 25,629.02. In the case of companies, a provisional tax of 10% should be paid. The CapitalGainsTaxis leviedattherateof 20% onnetprofits arisingfromthedisposalofthe propertyownership inCyprus.
FORM FILLING N.313
The form (N.313) holds the details of the sale and is sealed by the Immovable PropertyDepartment and Capital Gains as well as by the Income Tax.
NECESSARY PRECONDITIONS FOR THE TRANSFER TO THE LAND REGISTRY
The Immovable Property Tax and Capital gainsForm (N313)should be submitted at the land registry, along with a certificate by the Municipality or Community within which the property is located, which states that all the property taxes or any other tax falling under the Municipal or Communal fees,are paid. Moreover,they should providea certificate by the Sewerage Board which affirms that thedrainage fee is paid, and one bythe Value Added Tax if it is the first property being subjected to VAT (a certificate must be attached). An Important document is thetitle deed, which has to be submitted along with the other certificates. Whenall the above documents are completed and signed by the parties, they shall be deposited in any District Land Registry offices, together with the form (N 270) which is filled upat the Land Registry. During the transfer of the immovable property in the name of the buyer, he is responsible to pay the following transfer fees, calculated in accordance with the valuation of the property that will be carried outby the Valuation Branch: for the Asset Market Value up to € 85,430.07 the Transfer Fee rate is 3%, from € 85,430.08 to € 170,860.14 is 5% and above € 170,860.15 the rate is 8%.
Also the rate of 0% to 50% of transfer fees (according to a proposed amendmentand election of a law to suspend the payment of transfer fees till the 1st of June 2012). The paymentcan be made bypersonal checks, cash or credit card.
A transfer can be done with in a few hours with out any problems, while the title deed will be mailed to the beneficiaries.
Marinos Kineyirou: Vice-president of the Cyprus Association of Estate Agent Entrepreneurs, President of the Real
Estate Agent Entrepreneurs Association of Larnaca- Famagusta and Property Auctioneer