Why Buy land first?
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My architect came up with this idea in 2001 and it was confirmed to be OK by my lawyer. |
Purchase your plot of land first from the developer with a seperate contract and save money !!
Why?
Land transfer fees are paid only when the title deeds are transferred to your name.
When the title deeds to the plot are first transferred to your name a transfer tax is imposed.
But before a house is built on the plot, as the law stands now, you will NOT be required to pay any transfer tax on the value of the house as you did NOT purchase a plot with a building on it. Also there is no contract filed at the land registry which states that you have bought a plot and house for an X amount.
In the case of my land a Town Planning Permit had been issued before the land was sold and the contract deposited at the District Lands’ Office but no additional property transfer tax, based on a built property value, was requested.
Now if you should sell the house at some point in the future when the house is finished then you will be liable to pay Capital Gains Tax on the total value of the property.
A new contract will be filed at the land registry between yourself and the new third parties and the purchase price.
The new purchase price will appear on that contract and you will be taxed uopn the profit made from that sale.
Buying Land
For planning purposes, Cyprus is divided into various zones. These include residential, agricultural, animal rearing, industrial, green belt, and tourist zones. Some zones limit or prohibit the construction of domestic dwellings. You must ensure that the land you buy is in an appropriate zone.
Build Factor: The maximum number of square metres that you are allowed to build expressed as a percentage of the land area.
Site Coverage: The maximum area of the site that can be occupied by a building’s ground floor expressed as a percentage of the land area.
Detached property must have a gap of at least 3 metres from the edge of the property to the boundary. Note that non-habitable buildings, such as a garage, can be built on the boundary. But if the property is next to a designated ‘green area’, you are not permitted to have any covered building within 3 metres of the boundary abutting the green area.
Carob Trees are, just for example, protected and you will need permission and a licence to remove them from the local council.
If the land borders a water course then you may not be able to develop the site should this be judged likely to affect adversely it.
Depending on the soil type this may affect the type and depth of the foundations and therefore cost.
Topography of the site is also important. Steep slopes and the quality of the substratum will determine how you can build for foundation and building design or even IF you can build in some cases. Sane professional developers get specialist surveys carried out before they sign contracts. And some major developers have made some horrendous mistakes.
Some sites are, surprisingly, subject to flood restrictions so this again need to be checked out with the local council.
When buying land, it is important to get the documentation translated. When I was given some copy documentation for the first piece of land that I wanted to buy, I found an independent person who was a professional translater from greek to english. I then discovered a greek word that I found time and time again across Greek speaking countries buy Building land – in Greek οικόπεδο (pronounced ikόpedo). It means “for sale ” and is technically associated in Greece and Cyprus with Building Land. The word οικόπεδο appears on the Title Deed and this means that utility services (water, electricity and telephone) will be available on the land and there will be a right of way giving vehicular access to the plot.
When viewing land, make absolutely sure that what you are being shown is the land that is being sold. Ask the vendor for a copy of the Title Deed and the Lands’ Office Site Plan and then check that the sheet/plan/plot/references written on the Title Deed agree with those on the Site Plan.
Look at the Site Plan; from its boundaries, shape and location, look around you and identify roads,buildings, and other features shown on the Site Plan.
Walk away if the vendor is unable or unwilling to provide you with a copy of the Title Deed or the Lands’ Office Site Plan. The Title Deed will show the area of the plot and the planning zone in which it’s located.
Land search
Having found land that you wish to buy, the next stage involves a land search.
You can carry out the search yourself by visiting the District Lands’ Office and Town Planning Office and speaking with the officials there. However, it’s probably best to have your solicitor do this on yourbehalf.
But if you wish to conduct this yourself you can.
Details can be found at:
http://www.moi.gov.cy/moi/citizenscharter/citizenscharter.nsf/All/39D2CE83A1A34D55C2256E54003C5915?OpenDocument&highlight=search
and
http://www.moi.gov.cy/moi/citizenscharter/citizenscharter.nsf/dmlcharges_en/dmlcharges_en?opendocument
It is perfectly legal in Cyprus to sell land and other property that has charges, such as a mortgage, outstanding against it. However, you will not be able to own the property until its present owner has cleared the debt.
Should the owner not clear the debt, the creditor(s) can pursue their claim against the property, which may be enforced in a court of law.
Cyprus Property Help & Advice Centre™ ® ©The Black Art of Buying Property in Cyprus™ ®
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