HOW much do Title Deeds cost? – the simple answer is €0.85 – and copies may be purchased from the District Lands Office in which the property is situated.
However, the question should be “what will it cost me to secure legal, undisputed ownership of a property?”
In Cyprus, and many other countries, those buying property are required to pay a government tax to secure legal, undisputed ownership of a property. In Cyprus this tax called ‘Property Transfer Fees’; in the UK it is called ‘Stamp Duty Land Tax’ (SDLT). In both countries the tax is payable each time a property is purchased – and it is paid by the buyer to the relevant government authority.
In Cyprus, Property Transfer Fees are based on the market value of a property at its date of sale, assuming that the stamped contract of sale was deposited at the relevant District Lands Office within the required timescale. The Fees are calculated on a sliding scale as follows:
3% – on the first € 85,430
5% – on the next € 85,430
8% – on the remainder
So for a home with a market value of €200,000, the Property Transfer Fees would be €9,165.59; for a home valued at €400,000, the Transfer Fees would be €25,165.59.
If a property is purchased in joint names (e.g. a husband and wife), the Property Transfer Fees are calculated as if they had each bought a property of half the value.
So, for a home valued at €200,000 bought in joint names, a couple would each pay €3,291.40 making the total Property Transfer Fees payable €6,582.80. If the couple bought a property valued at €400,000, their combined Transfer Fees would total €18,331.90.
Property Transfer Fees can be calculated online by visiting the Cyprus Department of Lands and Surveys – Transfer Fees Calculator.
Are Title Deeds worth the added expense?
MOST CERTAINLY! Some people tell me that they are not prepared to pay for their Title Deeds (as they put it). These people, in my opinion, are extremely foolish.
Because without paying the Property Transfer Fees to secure legal, undisputed ownership of a property you have purchased, you face several problems:
- Once you have paid the Property Transfer Fees and the Title Deed to the property has been registered in your name, it is no longer owned by the developer. So if the development company fails and a firm of liquidators is appointed to sell off the company’s assets, they will not be able to throw you out of your home – or chase you for payment of the developer’s debts.
- If, sometime in the future, you decide that you want to ‘purchase your deeds’, the vendor/property developer could make things difficult for you (remember that he will have been paying all the central and local government taxes that rightfully you should have been paying as he will still be the legal owner of the property). You may end up having to take legal advice and possibly get involved in expensive litigation to secure ownership your home.
- Selling property in Cyprus at present is very difficult due to the state of the island’s economy, massive oversupply of unsold properties flooding the market, developer insolvencies, etc. Unless you have the Title Deed to the property you have purchased, finding a buyer will be even harder as the cat is out of the bag with regard to the widely publicised Title Deed-cum-fraud fiasco.
- Then there are the troika’s proposals. As you may have read, the troika wants banks to maximize their recovery rates for non-performing loans and to seize property pledged as collateral against these loans and offer it for sale within 18 months. Although this may not affect you directly, it could push some developers into insolvency – and then you could be faced with the problem of dealing with the liquidator as I mentioned earlier.
If you want to sleep easy at night in absolute confidence that no-one can take your property away from you or chase you for money to keep it, pay your Property Transfer Fees as soon as you are notified that your Title Deeds are available and secure its legal, undisputed ownership.