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Payment

All you need to know about the payment process

Payment

If your property is a resale and you can move straight in, you will make whatever payment you’ve agreed with the vendor at this point.

This may be full payment (less any holding deposit paid) or it may be a ‘deposit’ of as little as 10 per cent of the sale price, in which case the balance is usually payable within a month. If your property is under construction, you make the appropriate stage payment according to the sale contract (normally 30 per cent of the total cost).

The amount due (after the deposit and any mortgages are subtracted), including all fees and taxes except the transfer fee, which isn’t payable until you obtain the title deed, must be paid by banker’s draft or bank transfer.

Payments can be made in any currency from any country and are usually made by telegraphic transfer into the client account held by the buyer’s lawyer. However, transfers can take a long time and can even get ‘lost’, and it may be preferable to pay by banker’s draft, which means that you will have the payment in your possession (a bank cannot lose it!) and it allows you to withhold payment if there’s a last minute problem that cannot be resolved.

When the vendor and buyer are of the same foreign nationality, they can agree that the balance is paid in any currency, and payment can also be made abroad, although signing of the contract may be held up until confirmation of payment is received. However, the sale contract must state the sale price in Cypriot pounds and Cypriot taxes must be paid in Cyprus based on the exchange rate current on the date the contract was signed. At the time of signing, both the vendor and the buyer declare that payment has been made in the agreed foreign currency. In this case the payment should be held by an independent lawyer or solicitor in the vendor’s and buyer’s home country.

Single or Joint names

Property can be registered in single, joint or several names. It’s preferable to register a property in joint names because of the increased relief from transfer fees and, if the property isn’t a private residence, the fact that each person is exempt from the first €17,000 of CGT when it’s sold. There’s no inheritance tax in Cyprus, so there’s little advantage in registering a property in the names of your children.

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