Selling a Paphos Villa

[JAYB]

Hi Everyone,.....looking for some advise re. selling my villa.

Since I await the Separate Title Deeds, I understand I will require my developer to cancel the contract and provide a new contract for the new buyer......does anyone have any experience in this procedure ? (the original contract has been lodged with the Land Registry for Specific Performance).

Also, should I be fortunate enough to make a capital gain,...I would welcome any advise
as to what expenses I can offset against any potential gain.....is there any
booklets/pamphlets/websites I can refer to ?

Any other advice would be appreciated.

[Nigel Howarth]

Hi JAYB

There is no longer a need for you to cancel your contract of sale with the developer - the law was changed in 2011, when a new form of contract was introduced known as a vesting or assignment contract.

Using this type of contract you can sell your property without the need to come to an (usually financial) arrangement with your developer - indeed the developer needs to know nothing about what you are doing.

In essence what this type of contract allows you to do is to assign your rights (and obligations) stated in your contract with the developer to your purchaser.

However, problems may arise if your buyer needs to borrow money from a Cypriot bank. In these cases the developer usually has to act as guarantor for the loan - however, there is no obligation on him to agree to this - so it could be a problem.

As for Capital Gains Tax this will be charged at 20% of the gain - but this is indexed which will help to reduce your liability. Allowable expenses include Property transfer fees (which will not be applicable in your case), Stamp duty, Estate agent’s commission (but only if the estate agent is licensed by the Cyprus Real Estate Agents’ Association), Professional fees, Accepted capital additions and improvements - planning permission where necessary.

You also have a personal allowance of €17,086 - if you bought in joint names you will each get the €17,086 allowance.

If you can demonstrate that the property has been your main residence for a minimum of 5 years, the allowance is increased to €85,430 (Note this is NOT a personal allowance - so if you bought in joint names it will make no difference).

For further information on Capital Gains Tax, see Cyprus capital gains tax on the disposal of property.

And for information on vesting contracts, see page 53 of the Department of Lands and Surveys Citizen's Charter. And you can find the Department of Lands and Surveys revised charges at http://cdn.cyprus-property-buyers.com/w ... _12_13.pdf

Regards and good luck with your sale,

[JAYB]

Thanks Nigel.......as always.... prompt and concise,
and again much appreciated.

[gillM]

I don't have title deeds to my property but would like to pass it over to my 2 children. Under this new law what would I have to do? Obviously no cash would be involved but would I have to draw up any contract naming a present market value?
Gill

[Nigel Howarth]

Hi Gill and welcome to the forum,

Assuming that your children are over 18 years of age you can:

Sell/gift using an assignment contract. This will cost you €20 and, once the Title Deeds have been issued, your children will have to pay the Property Transfer Fees based on the market value of the property at the date you purchased it.

Regardless of the age of your children and whether you have the deeds, you can leave the property to them in your Will (which you should have made).

Regards,

[gillM]

Dear Nigel,
Some time ago I asked about passing over my villa to my 2 adult children. You kindly advised me that I could do this using an assignment contract. Would this have to be done via a cypriot lawyer and also would I and my children have to actual come to Cyprus to do this? I am not currently living in Cyprus.

Kind regards
Gill M

[Nigel Howarth]

Dear Gill

If you wait until you have the deeds to the property, you will not need an assignment contract - you can simply 'gift' the property to your children. The Land Registry fee will be 0.2% of the property's 1980 value.

If you don't have the deeds, you can use an assignment contract to gift the property to your children. The Land Registry fee for depositing this contract will be €20.

In both cases you should use a lawyer in Cyprus (he/she doesn't have to be Cypriot). You should be able to avoid visiting the island by giving Power of Attorney to you lawyer.

Regards,

[Pantheman]

Dear Gill

If you wait until you have the deeds to the property, you will not need an assignment contract - you can simply 'gift' the property to your children. The Land Registry fee will be 0.2% of the property's 1980 value.

If you don't have the deeds, you can use an assignment contract to gift the property to your children. The Land Registry fee for depositing this contract will be €20.

In both cases you should use a lawyer in Cyprus (he/she doesn't have to be Cypriot). You should be able to avoid visiting the island by giving Power of Attorney to you lawyer.

Regards,

Nigel, I'm not so sure it is €20 to deposit the assignment. They will probably charge the 0.5% of the original purchase price for this. Although I do stand to be corrected.

Pan

[Nigel Howarth]

Hi Pan,

You can find the Land Registry Fees and Charges at http://www.news.cyprus-property-buyers. ... lications/

The 'normal' fee for an assignment contract is 0.5% of the purchase price in the original contract of sale or 0.5% of the purchase price in the assignment agreement (whichever is higher). The minimum fee is €50 and maximum fee is €3000.

However, if the contract is assigned by a parent to a child - the fee is €20.

Interestingly, the charge for depositing a “vesting” contract is €200.

I met with the former head of the legal department of the Land Registry today and one of the things we discussed was the difference between an assignment contract and a vesting contract. (He was one of the architects of the law). There is no difference in the law between assigning and vesting - they're both same. He's going to speak with his former colleagues to find out why the fees are so different.

Regards,

[Pantheman]

Hi Pan,

You can find the Land Registry Fees and Charges at http://www.news.cyprus-property-buyers. ... lications/

The 'normal' fee for an assignment contract is 0.5% of the purchase price in the original contract of sale or 0.5% of the purchase price in the assignment agreement (whichever is higher). The minimum fee is €50 and maximum fee is €3000.

However, if the contract is assigned by a parent to a child - the fee is €20.

Interestingly, the charge for depositing a “vesting” contract is €200.

I met with the former head of the legal department of the Land Registry today and one of the things we discussed was the difference between an assignment contract and a vesting contract. (He was one of the architects of the law). There is no difference in the law between assigning and vesting - they're both same. He's going to speak with his former colleagues to find out why the fees are so different.

Regards,

Thank you Nigel for that useful piece of info. Just goes to show, there is always some new to learn.

All the best

Pan

[Nigel Howarth]

there is always some new to learn.

The problem is once you've learnt something, they change it!

Cheers,