Banking & Financing

Opening a bank account

It is very easy to open a bank account in Cyprus. All you need is proof of address and some kind of photographic identification for example your passport, you will be asked to fill in a short form, and that’s It.!

Mortgage           

Property lending to non-residents
Loan facility to Non-Residents for the purchase of immovable property in Cyprus

Laiki Bank is in the position to examine requests for Loan facilities by Non-Residents for the purchase of immovable property in Cyprus.

Our Bank’s main parameters for offering property lending to non-residents are the following:

  • Loan amounts of up to 70% of the purchase price of the property can be offered provided the purchase price of the said property does not exceeds the equivalent of €172,000 (CYP100K). In cases where the purchase price of the property exceeds the amount of €172,00 (CYP100K0), then an additional loan of 50% of the amount exceeding the equivalent of €172,000 (CYP100K) can also be examined.
  • The maximum amount of loan per applicant is the equivalent of €344,000 (CYP200K).
  • The facility is repayable over a period of 10 years with monthly, quarterly, semi-annual instalments subject to the Bank’s approval.
  • The interest to apply on these loans will be Libor + up to 2,50% - 2,75% and the customer can borrow in a number of currencies, (i.e. GBP, EURO, CHF, USD, CYP) subject to the Bank’s final approval.
  • The valuation cost of the property is payable by the applicant irrespective of the outcome of their application.
  • Upon the establishment of the loan facility and in addition to the valuation cost the applicants will have to pay an ¨arrangement fee¨ of up to 1% of the loan amount and ¨documentation¨ fee up to €258 (CYP150).


As security, the Bank will require the following:

  • First Legal charge over the immovable property to be purchased, or assignment of the sale contract supported by a bank guarantee from the seller. In case the property under development is already mortgaged in favour of the Laiki Bank then no bank guarantee will be required.
  • Assignment of a term life policy, depending on the credit assessment.
  • Assignment of a Fire Insurance Policy.
  • The borrower, will have to pay his contribution towards the purchase price of the property prior to the release of the loan funds

Requests for financing which do not fall within the above parameters can also be examined on case-by-case basis.

Other associated costs:

  • Mortgage fees 1% on the amount of the mortgage amount, payable to the Land Registry Office
  • Stamp Duty 0,15% on amounts up to the equivalent of €172,000 (CYP100,000) and 0,2% on amounts over the equivalent of €172,000 (CYP100.000).


Additionally and in order to enable the proper credit assessment of each application, the following must be provided by each applicant:

  • Photocopy of the applicant’s passport (the page with the photograph and personal information).
  • Bank reference from their existing Bankers.
  • Details of the property to be purchased supported by a copy of the sale contract.
  • Full residential address and date of birth.
  • Proof of income (copies of last 3 months salary advices / copies of last
  • 2 years? tax clearance / certificate from the employer or the accountant.
  • Copies of the down payments made by the applicant against the purchase price.
  • Statement of assets and liabilities duly signed by the applicant


Extract taken from the Laiki Bank website

Legal Advice

Basic Information for non Cypriot Citizens who buy Immovable Property in Cyprus.

1. For the registration of immovable property on α non-Cypriot's name a permit is needed from the Cyprus Government. In this respect an application is made, preferably through α solicitor (local).

The procedure starts with the signing of contracts and then the solicitor has them duly stamped.

The average contract should include the following points:

            • Reference to the vendor
            • Reference to the purchaser
            • The property for sale has to be described as accurately as possible.
            (If the property isn’t constructed yet, specifications be must accurately determined)
            • The purchase price
            • The terms of payment
            • The delivery date
            • The transfer date

All payments should be effected through official channels (banks) and money brought in cash should be declared at the airport or at any port on arrival.

When the property has title of its own, registration can be effected as soon a the permit is granted.

If the property (flat/house) is under construction or recently built and separate title is not available the buyer is equitable owner until the title is obtained and then registration can be effected.

The contract needs stamps which are of €2.58 (£CY 1.50) for each one thousand pounds of the value up to €172,000(£CY 100.000). Over this amount the fees are €3.44 (£CY 2) per thousand. The documents should be stamped within 30 days after their signing in order to avoid the payment of a fine. (e.x. for €25,800 (£ 20,000) price £stamps are needed)

The contract can be filed at the Lands Registry Office (L.R.O.) for specific performance.

During the course of the registration procedures the District Land Officer will review the value of the property in order to determine the transfer fees and he may not accept the value of the property as stated in the sales contract, but as assessed by the Land Registry Valuers (it is based on the property price on the open market on the day of the original transaction/ sales contract). When the registration takes place the purchaser pays registration/transfer fees as follows.

3%  for an amount of price up to €86,000 (£CY 50,000) (per person)

5% for an amount of price up to €86,000 - €172,000 (£CY 50,000-£CY 100.000)(per person)

8% for an amount of price up to €172,000 (£CY 100,000) and over (per person)

If the property is in the joint names, e.g. of a couple (husband and wife) or two individuals, then the purchase value is split into two parties which result in reduced transfer fees.

Legal fees range according to the time spent, money involved etc between €875 (£CY 500) and €3440 (£CY 2,000)

Two certificates needed

  • Α Certificate from any person in Authority of the Country of the applicant as to his good character of clean criminal record. (Police or magistrate or solicitors or accountants e.t.c)
  • A certificate from a financial institution (Bank – Building Society) as to the applicants good economic standing that he or she is trustworthy. If such certificate is refers to minimum deposits of €60200 - €68800 (£35.000 - £40.000) is preferable. These two certificates should be acquired by the applicant in his country and be sent to the solicitor as soon as possible. These two certificates will be attached to the application form.


Miscellaneous

a. Rates e.t.c Annually: Refuse collection fees €34.40 - €68.80 (£CY 20 - £CY 40). Community tax €34.40 - €68.80(£CY 20 - £CY 40). Electricity and water according to consumption. For the electricity and water consumption bills, you may arrange to be paid through your bank.

b. The law as to private rights and obligations is very similar, sometimes identical to the English Common Law.