ADDITIONAL COSTS ASSOCIATED WITH A PROPERTY PURCHASE

Connection charges for utilities are payable to the respective authorities at intervals, and can be direct debited on connection, Water is supplied at £45 deposit and levied at approximately £6 per quarter plus consumption based on the meter reading, Electricity is supplied at £75 deposit and levied consumption based on a meter reading every 2 months, and Telephone is £23 deposit for a mobile line,£30 deposit for an analogue line and £40 deposit for an I.S.D.N. line, and billed at the line rental plus consumption every month.

The sewerage board of each district imposes a sewage tax of £20-£40 per annum. –local authorities charge £40-£50 for the regular collection of rubbish, the cost depends on the area of the purchased property;

Common Expenses: If the property purchased is within a project/complex/development with common areas, a general agreement is signed on possession of the property and a community fee is levied, it is to cover the property owners share of the cost of cleaning, repairing, and maintaining the common areas such as; the cost of the electricity for the outside lighting, landscaping and gardening, swimming pool maintenance, and management fees. These are calculated per square meter for each property, payable annually in a lump sum at the beginning of every year, which price may escalate per annum, in accordance with the law of the Republic of Cyprus, Retail Price Index, which is in accordance with inflation and the cost of living.

As for the matter of Insurance, there is a well developed insurance industry which can handle all types of cover and with crime at just 1/6 of the European average insurance, rates reflect this. It is advisable to stay with the Insurance carrier of the Developer because, if the whole project is insured with the same carrier, then in the case of a claim they would be more likely to settle quickly. . (Usually the charge is £1.50 per thousand values for the building fire & burglary £1.75 comprehensive and the same calculation is used for the contents)

Legal fees charged in accordance to the value of the property. An itemized retainer for Contracts, Wills Power of Attorney, Council of Ministers application etc is available on request.
All costs are paid separately to the Builder & your Advocate and in the case of the After Service Fee to your Agent.

Valuation fees paid to an independent official valuator.

Fees paid for the transfer of the title to the buyer and mortgage fees payable to the Land Registry.

Stamp duties on the mortgage and loan documents.
Regulations - Foreign nationals and International Business Companies should pay for the property with foreign currency imported into Cyprus. This requirement is satisfied if one secures a loan in foreign currency.

The registration of property under the name of a non resident requires proof of the import of foreign currency to be presented at the relevant District Land Registry Office. We offer advice on all aspects of the required procedure.

The acquisition and registration of property in the name of non resident requires the approval of the District Officer. We can help with all the required documentation.

MORTGAGE INFORMATION

As regards Mortgages ,the Purchaser must visit the Bank once a Contract is signed ,in order for the Bank to appraise; the value of the Purchased property ,and also, the Clients repayment ability, i.e. a Bankers Reference is requested by the Cypriot Bank (once the Client gives due authorization for the disclosure of the information) and in addition evidence of income is required, in the form of a letter from the Employer reflecting the annual salary and /or a pension forecast and sometimes even copies of his Bank statements of the last 6 months. The Banks offer loans ranging from 12,000 up to 150,000, with a repayment duration of 8 to 15 years [if repaid before no penalty is incurred] the loan repayment may commence up to one year from its approval during which grace period only the loan interest has to be paid, and the loan covers up to 75% of the value of the property or when building on a fully paid private site up to 100% of the value of the residence.

Who can benefit

• Foreign Nationals.
• People of Cypriot origin living abroad.
• International Business Companies and their personnel.
• Any Cypriots who wish to borrow money in foreign currency to purchase immovable property in Cyprus.

Purpose

The loan is available in foreign currency and can be used to buy a house, an apartment, or an office space in Cyprus.

Characteristics

• The loan is available in any currency of your choice including USD, EURO or GBP.
• There is no maximum loan amount. The loan can amount up to 70% of the forced sale value of the property (according to the official evaluation of an independent valuator).
• The maximum repayment period is 15 years.
• The interest rate will be LIBOR (1, 2, 3, month) depending on the customer’s preference, plus a spread of 2, 5%.

Advantages

• The loan is granted in the currency of your choice.
• Competitive interest rates are offered.
• There is a long-term repayment period.
• The purchased property can be offered as security for the loan.
• Additional charges associated with the purchase of immovable property

INTEREST RATE & CHARGES

Annual Percentage Rate (APR) example
For a loan in USD equivalent to CY£50.000 with 10 years repayment period (paid in monthly installments) and with 3-months Libor 1, 42% (as at 15/11/02), the APR is calculated at 4, 4%. The APR includes documentation fees £20, exchange commission 0, 5% for up to £20.000 (and 0, 4% for over £20.000) and arrangement fees 1% of the loan amount.
WARNING: You run the risk of losing your immovable property if you fail to keep up with the mortgage installments or installments of any other loan, which is secured by a mortgage on your immovable property.

NOTES:

• The mortgager may vary the interest rate and the repayment installment of your housing loan from time to time.
• The interest rate is variable (unless stated otherwise) and has been calculated based on the base rate at the time of printing.

Loan granting depends very much on the submission of adequate securities by the borrower to the Bank, which however maintains the right to reject any loan application according to its judgment.

All information courtesy of
Chrysa Christofis
Advocate (Paphos)