Cyprus Property News magazine for overseas buyers & real estate investors

Thursday 16th July 2020
Home News Further progress anticipated

Further progress anticipated

Memorandum of Understanding (Cyprus)OVER the past year or so the Cyprus government has introduced more changes that any previous government to improve the fortunes of those who have bought property on the island.

Previous governments made numerous vacuous announcements to resolve the property issues including “an arsenal of weapons against unscrupulous property developers”, “providing greater security to homebuyers by enabling their Contracts of Sale to take precedence over the developers’ mortgages”, “penalties and a ‘name and shame’ policy for developers that delay Title Deed applications”, and of course a promise to untie/cut the Gordian knot.

In 2009 a previous Interior Minister vilified foreign media for presenting the Republic of Cyprus as an unreliable place for investment in the property market due to a problem of issuing title deeds and foolishly claimed that “the property market in Cyprus is stable and secure, and property buyers must be absolutely certain that their investments are safe here; indeed, property investment is much safer in Cyprus than anywhere else.”

The collapse of the island’s economy during the presidency of Demetris Catastrophias necessitated Cyprus to seek a bailout loan from the troika of international lenders, which resulted in a savage haircut on bank deposits and hardship for many. But as they say ‘every cloud has a silver lining’.

The loan negotiations resulted in a Memorandum of Understanding on Specific Economic Policy Conditionality (MoU); a programme of reforms agreed by the government and the troika to address the financial, fiscal and structural challenges facing Cyprus in return for the bailout loan.

The latest MoU revision, which followed the 7th review, includes some positive changes that will affect those who have bought or who are planning to buy property in Cyprus:

Legal framework for private debt restructuring

1.11. All legal, administrative or other hurdles currently constraining the seizure and sale of loan collateral will be removed so that the assets pledged as collateral can be recovered within a reasonable period deemed to be a maximum time-span of 1.5 years from the initiation of the relevant proceedings. In the case of primary residences, this time-span could be extended to 2.5 years. The authorities commit not to introduce any further impediments to the seizure of assets pledged as collateral.

1.12. Prior to the granting of the eighth disbursement of financial assistance the House of Representatives will adopt the legislation on solving the backlog of title deed transfers, which was submitted by the Council of Ministers in June 2015.

Moreover, by end-September, the authorities will present to programme partners draft legislation for non-legacy cases that:

  • ensure that property buyers who have paid the purchase price in full, will have their title deeds transferred without delay and if possible in one month after the application for transfer or after the issuance of the title;
  • put obligations on all parties involved to ensure that the procedures releasing encumbrances and transferring the title can operate without delay and as automatically as possible; and
  • provide safeguards against abuse, inter-alia by introducing a mandatory escrow account system that will ensure that all payments related to a property transaction are processed in a safe manner, at low operational cost and without delay.

By end-October, the legislative proposals on non-legacy cases will be adopted by the Council of Ministers.

The authorities will propose further legislative and administrative measures necessary to incentivise the swift transfer of title deeds, including legal or contractual standards for property sales contracts and connected loan and mortgage arrangements by end-October.

Immovable property tax reform

3.8. The Cypriot authorities will reform the immovable property tax with the objective to improve the fairness of the tax burden and to increase the efficiency of the tax administration. To this end, the authorities will:

  • By end-October 2015, adopt the legislation on the reformed recurrent immovable property tax with effect from January 2016, based on the most updated General Valuation for all immovable properties. The new immovable property tax should be based on the recommendations of the study on the consolidation of property taxes, should ensure a broad tax base and should be fiscally neutral, taking also into account the reduction of the transfer fee. The amendments to the IPT legislation will be submitted for timely consultation with programme partners.
  • adopt by mid-October 2015, legislation specifying the frequency of the mandatory update of the cadastral values to three years maximum from 2018 onwards,;
  • continue the assessment of the relevance of the parameters used in the Computer Assisted Mass Appraisal (CAMA) model for the General Valuation, on a quarterly basis.

Housing market and immovable property regulation

5.3. Action is required to ensure property market clearing, efficient seizure of collateral, and swift transfer of property rights. A particular risk arises from legal disputes, which may be due to incomplete documentation of ownership and property rights and the slow pace of judicial procedures.

The Cypriot authorities will ensure that:

  • the title deed issuance backlog of immovable property units from development projects pending3 for more than six months drops to less than 3,500 units by Q4-2015 To that end, the Cypriot authorities will continue to provide to programme partners analytical data on the stock of backlogs of permits, deeds, certificates, and mortgages associated with the underlying properties and continue publishing the quarterly progress reviews. From January 2016 onwards, at least 3,000 pending titles will be issued per month to reduce the backlog on remaining projects.
  • by end-September 2015, the House of Representatives will adopt amendments to the Street and Building Permit Law to ensure the enforcement of the deadlines for issuance of certificates of completion by the supervisor engineers;
  • the working group on title deeds issuance will continue their review of all procedures from the planning permit application to the issuance of title deeds. By end-September 2015, the Cypriot authorities will submit for consultation with programme partners a report detailing the main obstacles for the issuance of title deeds and required certificates. The report with recommendations on ways how to speed up issuance in 2015, will include any necessary draft legislation or other administrative measures, including a catalogue of non-tolerated deviations from permits, in order not to impede title deed transfer. Moreover, the report will assess the scope for self-certification and provide recommendations on further comprehensive streamlining of building, planning and title deed procedures from 2016.

3Development projects refer to original titles with at least three contracts of sales deposited at DLS; pending refers to (i) applications for title deeds issuance, (ii) units that are eligible for the “ex-officio” issuance of title deeds, required certificates and permits.

Although these are positive changes, Cyprus still has a long way to go to regain the trust and confidence of both local and foreign investors, specifically:

  • Title Deeds must be available for transfer on delivery of a property to its purchaser free of all encumbrances and notes preventing its sale.
  • Every habitable dwelling must have a Title Deed.

Reforms that bring about the above critical changes will bring the safety and security afforded to those buying property in Cyprus into line with other European Union member states.

Further reading

Memorandum of Understanding on Specific Economic Policy Conditionality (7th review – final official draft)


  1. Firstly many thanks for all your uptodate info,it has helped me keep my sanity—

    We bought a holiday home, paid cash and still have no title deeds. Developer,ICE, went bankrupt and on contacting my lawyer to process deeds on our behalf,was told its a new law and does not know when they will be available.

    So further delays .Planning to sell and get out as soon as possible like many one ruined dream.

    (Editor’s comment: The new law is available NOW. Please refer to Apply for your Title Deeds now – and submit your application.)

  2. If developer says we owe IPT before they supply us with the necessary paperwork for title deeds is it possible to pay direct and avoid paying it to the developer.

    (Editor’s comment: You need to check your contract of sale to see if you are obliged to pay Immovable Property Tax to the developer. If you are then he needs to provide you with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property. Please refer to this letter from the Interior Ministry.

    Note that you should pay IPT for 2014 and 2015 directly to the Tax Office. Please refer to Paying Immovable Property Tax.)

  3. I went to the Land Registry on Friday and they told me my contract of sale has not even been registered even though I bought the property in 2003 with a solicitor, the Land Registry told me I would have to go to court to get my title deeds. I phoned my solicitor and she told me there has to be changes to the contract which I find very strange as the original contract has already been signed by myself and my developer. Totally confused.

    (Editor’s comment: I suggest you sort this out with your lawyer. And check out this story – Bar Association fines lawyer for misconduct.)

  4. Nigel thanks for all the feedback all this time, another quick one, if deeds become ready soon, and the buyer has applied via the trapped buyers law for them, yet the bank or even developer object to transfer of the property (developer) citing non payment, or the bank cites encumbrances on the land and buyer was a cash buyer so we wont free from encumbrance to allow deeds to be issued, and this causes a delay in the process so the buyer misses the 31st Dec 2016 deadline for discount on the transfer fees, and by no fault of his own. Will this fact be taken into account if deeds are finally freed in 2017? …..apologies for the very hypothetical questions….

    (Editor’s comment: I’ll have to give you a hypothetical answer. The law states that only property transfers that take PLACE on or before 31 Dec 2016 will be entitled to a discount on the Property Transfer Fees.)

  5. @ Nigel

    You may remember my last post on your article (Title Deeds – Act Now) outlining that I was advised by my lawyer to refrain from applying for my deeds just yet, as she was aware of amendments in the pipeline that would make it even easier and quicker to receive deeds if I waited a couple of months. I am wondering if this latest MOU is what my lawyer was referring to. In particular section 1.12.

    Is it possible that anyone could have seen this latest MOU as long as a week before publication? In your opinion will the further demands outlined in the MOU warrant legal amendments to the existing law or am I perhaps wrongly connecting my lawyer’s advice to this latest MOU.

    Your opinion would be appreciated.

    (Editor’s comment: I suggest you apply for your Title Deeds now. As I said earlier if the Cypriot authorities do change this ‘trapped buyers’ law there is a risk that they will in breach the MoU and put bailout money at risk.

    The draft legislation referred to in the latest MoU will provide improvements in other areas.

    I managed to get a copy of the MoU 9th September, and it would have been agreed earlier before being ‘leaked’ to the media.)

Comments are closed.



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