Typically, for a period of time after completion of the construction of the property, the title deed on the newly developed property, such as an apartment, a detached villa, or an office, is still described as “land” in the name of the developer. This is because after completion and delivery of the project, there is a legal process whereby the developer must undertake a series of steps with several government departments to validate that the property was built based on relevant permits. After this process is complete, separate title deeds are issued for each unit, and the developer then transfers the title deed to the buyer. It typically takes 1-3 years depending on specific facts and circumstances. In the meantime, the buyer’s rights are safeguarded by the contract of sale, lodged in the Land Registry.

Yes, it’s possible to resell a property without a title deed, but a regular sale contract cannot be used. Instead, you have two main options, namely, you can either assign your rights under the existing contract of sale with the developer to the new buyer, or cancel your original contract of sale with the developer and have the new buyer enter a new contract directly with the developer. These methods help ensure a legal transfer of ownership until the title deed is issued, on the same terms. The latter requires the consent and participation of the developer.

Assignment of contract rights is a legal method that allows you to transfer all your rights from the original property purchase contract of sale with the developer to a new buyer. By signing an assignment agreement, you formally transfer your ownership interest and all other contractual rights, such as warranties to the new buyer. This means the new buyer will eventually receive the title deed once it’s issued, as if they had originally purchased the property from the developer. You cannot legally assign liabilities, so this process entails prior or simultaneous full payment of the purchase price.

The assignment process involves you (the seller) and the new buyer entering into an assignment agreement. This document details the sale terms, including the purchase price, and clearly states that all your rights in the original contract are being transferred to the new buyer. After signing, this agreement, along with the necessary tax documents and clearance forms, is submitted to the District Land Registry where the property is located. A designated form, namely, Form D130, is also required for processing the assignment, together or in lieu of a signed assignment agreement.

No, the developer doesn’t need to be involved in the assignment process. The transfer of rights occurs strictly between the original buyer (you) and the new buyer. The developer must continue fulfilling its obligations, such as completing construction, issuing warranties, or ensuring final delivery, for the benefit of the new buyer who assumes your place in the contract. However, the original buyer, you the seller, will still remain liable for all obligations under the original contract of sale, most notably payment of the purchase price. Typically, the contract of sale will contain provisions which govern the buyer’s rights to assign the contract and will expressly dictate that the full purchase price must be paid.

When assigning a contract, there’s a submission fee paid to the District Land Registry, which is 0.5% of the new purchase price, with a cap at €3,000. Additionally, the seller must settle any outstanding property taxes and capital gains tax associated with the property before the assignment. Obtaining a tax clearance from relevant authorities, and all other clearances of property dues, is necessary, as if this was an outright sale and transfer of a property with title deeds. The Land Registry will not permit the assignment unless all clearances are obtained.

The amount of capital gains tax is the same as an outright sale, namely 20% on the “profit” or “gains”. This is generally calculated as the sale price (or assignment price) minus the cost of acquisition, adjusted by inflation and some other permitted costs. The final determinant of the applicable capital gains tax is the tax authority. They perform the necessary and definitive calculation upon the relevant application of the seller using the necessary forms (N313).

No. There is an assignment fee which is 0.5% of the new purchase price, with a cap at €3,000.

The necessary documentation includes the signed assignment agreement and/or Form D130, tax clearance forms, and receipts proving that all related payments (property taxes, capital gains, electricity, dues, etc.) have been settled. These documents must be in order before the seller, or their legal representative can submit them to the District Land Registry and proceed with the assignment.

Yes, the developer’s consent and relevant actions are crucial for contract cancellation. The developer must be willing to sign a new contract with the new buyer and to formally cancel the original contract. Typically, this will be governed by the contract of sale, namely there will be an obligation on the developer to consent and assist the buyer in case of resale. While many developers are contractually obligated to assist with this process, some may be reluctant due to administrative burdens, processing fees or potential tax implications. In some cases, fees may be involved.

Yes, the developer’s consent and relevant actions is crucial for contract cancellation. The developer must be willing to sign a new contract with the new buyer and to formally cancel the original contract. Typically this will be governed by the contract of sale, namely there will be an obligation on the developer to consent and assist the buyer in case of resale. While many developers are contractually obligated to assist with this process, some may be reluctant due to administrative burdens, processing fees or potential tax implications. In some cases fees may be involved.

Once the original contract is cancelled, it is formally withdrawn from the District Land Registry. At the same time, the new contract between the developer and the new buyer is submitted for specific performance purposes. This simultaneous withdrawal and submission ensure there’s no gap in the property’s legal status and that the new buyer’s rights are immediately recognized.

Although the District Land Registry doesn’t require a tax clearance for cancelling a contract, the seller is still responsible for notifying the tax office. This step is essential because the tax office may need to determine if capital gains tax is due from the sale. The matter is somewhat complicated as the seller is legally the developer, which likely pays corporate taxes, thus it is advisable that proper tax advice is sought before resale by cancellation, both from the seller and the development.

The District Land Registry does not charge fees for cancelling and submitting a new contract of sale, other than standard fees to submit a contract of sale for specific performance purposes. However, the cancellation agreement and the new contract must be stamped according to Cyprus law, and the cost for this usually falls on the buyer. The Land Registry will not accept the lodging of the new contract of sale unless it is duly stamped. Furthermore, the developer may reasonably request fees from the involvement.

The speed of each option depends on various factors, including the developer’s willingness to cooperate. Assignments generally are straightforward, similar to an outright sale with title deeds and involve fewer steps and do not require the developer’s involvement, so they can be faster. However, if the developer is prompt and organized, the cancellation process may also be straightforward, especially if the new buyer wants a direct contract with the developer and the parties prefer to avoid obtaining necessary tax and other clearances beforehand. VAT issues are also very relevant, namely whether the resale is subject to VAT and consequently whether the new buyer wants to benefit from reduced 5% VAT.

Yes, if there is a mortgage or other encumbrance (like a lien) on the property, it may complicate the transfer process by either assignment or cancellation. These legal claims must be addressed or potentially cleared before the property can be assigned or a new contract signed. In cases involving mortgages, it’s essential to discuss the specifics with the developer and a legal advisor, and coordinate with the beneficiary of the mortgage, if possible. Typically, they will ask that all debts are cleared before they release any mortgage, in order to permit the assignment process.

The decision depends on several factors: the developer’s willingness to cooperate, the costs associated with each method, the timing, and any specific contractual obligations tied to the property. Assignment may be more straightforward if the developer’s involvement isn’t needed, but cancellation is ideal for establishing a direct contract between the new buyer and the developer, especially where there are VAT issues. A legal advisor can help weigh these factors and recommend the best option for your circumstances.

Generally, no restrictions apply to who can purchase a property through assignment. However, once separate titles are issued, non-EU citizens who purchase a property this way are required to secure consent from the local district administration office before the developer can transfer the title deed into their name. This consent process is straightforward, and consent is rarely withheld. In the unlikely event that consent is not granted, the purchaser may assign the property to another individual or establish a Cyprus company and transfer ownership of the property to the company.

Generally, no restrictions apply to who can purchase a property through assignment. However, non-EU citizens who purchase a property this way are required to secure consent from the local district administration office before the developer can transfer the title deed into their name once the title deed is issued. This consent process is straightforward, and consent is rarely withheld. In the unlikely event that consent is not granted, the purchaser may assign the property to another individual or establish a company and transfer ownership of the property to the company.

The process of purchasing a property through assignment or cancellation can be completed either in person or through a designated proxy. This is done by granting power of attorney to an authorized representative, enabling them to carry out all necessary actions on your behalf, such as processing the assignment or cancellation and attending the Land Registry. The said power of attorney must be certified by a certifying officer in Cyprus or, if signed abroad must be duly legalized based on applicable laws and treaties.