F.A.Q. - All Questions - Property Art

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FAQ (Copy)

Question: What is a sales agreement?

– Answer: A private document signed between the buyer and seller.
It must state the following points:

Details of the buyer and seller
A legal description of the property
The purchase price
The form of payment and currency to be used in the transaction (banker’s draft, cash, etc.)
The completion dates and penalty clauses, if a seller withdraws after signing the contract or if the buyer pulls out.

Question: Will I have to pay tax when selling a property?

– Answer: Capital gains tax in Cyprus is 20%. There is a tax-free allowance of €10,000.

Exemptions include:

Transfer of property of a deceased person
Property gifted from parent to child, and between third-degree relatives
Property gifted to approved charitable organisations

Question: Do I have to make Insurance?

– Answer: Just as you would insure your home and contents in your country, the same applies to property in Cyprus.

If you are purchasing a property with staged payments, or are taking on a mortgage on completion of the property, it is worth taking out life insurance to cover repayments in case anything happens to the main earner of the family.

Question: What about Legal System in Cyprus?

– Answer: The legal system in Cyprus is based on the British legal system. The land Registry in Cyprus is also based on the British system and it is one of the most advanced and reliable systems in the world. This makes purchasing property in Cyprus very secure. Contracts and paper work relating to a property transaction are in English.

Question: I’m interested in buying a new home. Where do I start?

– Answer: Purchasing a new home is an exciting process and there are several steps along the way. The first step in the home purchase process is research. Next, make a list of neighborhood and home features most important to you. Visit Property Art web site. Consider your budget and determine what type of home you can afford. Narrow your selections and focus in on your dream new home.

Question: Is the land included in the price of my new home?

– Answer: It is. When you purchase a new home, you are not only buying the home itself. You are also buying the land that the home is built on.

Question: Are there any financial options that can help me buy a home over my price range?

– Answer: Buying a home will most likely be the largest purchase of your life – so you need to be sure that you own a home that’s compatible with your financial situation. A mortgage is typically a person’s largest financial obligation, and is designated for borrowers who have demonstrated an ability to manage their finances. To determine this, lenders are required to review a borrower’s credit report. The key to choosing the right mortgage is to understand the range of features and options available to you, as well as your budget, circumstances and goals. The more you know, the more comfortable you will be choosing the best options for you and your family.

You should also consider how much money you have for a down payment – the portion of the purchase price that you furnish yourself.

To qualify for a conventional mortgage you will need a down payment of 20% or more. However, you can qualify for a low down payment insured mortgage with a down payment as low as 5%.
There are mortgage specialists (e.g. in the bank) which can explain the types of mortgages available to you, the terms, and the rates to help you select a mortgage that fits your lifestyle and potentially cuts years off your mortgage.

Question: How do I determine what the interest rate on my home loan will be?

– Answer: In most basic terms, an interest rate is a fee paid for borrowing money. Interest rates fluctuate daily based on economic conditions and your specific interest rate will depend on you and your financial habits. So, when you search online for “today’s home loan interest rates”, the rate you see listed in the search results is probably not the rate you will end up paying – that is just a starting point.

Your interest rate will be determined based upon how much money you borrow; what type of loan you get; how long you plan to take to pay off the loan; your down payment amount; and finally your credit rating.

Question: How does purchasing home compare with renting?

– Answer: The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission of the landlord.

Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

Question: What should I look for when deciding on a neighborhood?

– Answer: Select a neighborhood that will allow you to best live your daily life. Many people make this choice based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural neighborhood? When you find places that you like, talk to people that live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable in.

Question: Is an older home a better value than a new one?

– Answer: There isn’t a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods and offer more ambiances. People who buy older homes, however, shouldn’t mind maintaining their home and making some repairs.

Newer homes tend to have more modern architecture and systems, are usually easier to maintain. People who buy new homes often don’t want to worry initially about upkeep and repairs.

Question: How do I make an offer?

– Answer: Your real estate agent will assist you in making an offer, which will include the following information:

complete legal description of the property
amount of earnest money
down payment and financing details
proposed move-in date
price you are offering
proposed closing date
length of time the offer is valid
details of the deal

Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer.

Question: Do I need a lawyer to buy a home?

– Answer: You may want to hire a lawyer to help with the complex paperwork and legal contracts. A lawyer can review contracts, make you aware of special considerations, and assist you with the closing process. Your real estate agent may be able to recommend a lawyer.

For the customers from abroad it is important to hire a lawyer who can represent homebuyers in case they can’t be in Cyprus for some paperwork.

Question: What are the advantages of renting a property?

– Answer: These days, an increasing number of people are renting and the quality and range of rented accommodation is better than ever.

Renting offers more flexibility than owning – you can move somewhere else relatively quickly – useful if you plan to move for a new job or is going away to study. Also, it’s less hassle than being an owner as you won’t need to pay for property maintenance – most of that will be done for you.

Question: Can I have a pet?

– Answer: Some landlords outright forbid any cats or dogs. Check what your landlord’s policies are. You also should ask about visitors with pets.

While not all landlords refuse to allow pets, many say they do for financial reasons. Dogs can scratch up doors and hardwood floors. Also, not every pet can handle long hours left alone in an apartment while their owner is at work.

Barking disturbs other tenants, and pet accidents can stain carpets and wreck flooring. Also, pet owners are absolutely expected to clean up after their animals.

Question: What about parking?

– Answer: You will probably have your own designated parking spot in your apartment community. However, please ask the apartment manager about parking rules. And if you plan on having a regular guest (like a boyfriend or girlfriend) visit your apartment, be clear on where they are allowed to park, too.

Question: When is rent due each month?

– Answer: Be sure you know what day of the month the rent is due. Mark it on your calendar that you are never late. Before signing a lease, find out what the landlord considers a late payment and if there are any fees associated with paying rent after its due. Some landlords allow a grace period of a few days before they consider rent payment late.

Question: What are the benefits of choosing a rental home over a hotel for vacation?

– Answer: You get your own space, including a kitchen; rentals are cheaper and cozier for larger families than several rooms at a hotel; and you get to live in an area where real people (not tourists or business travelers) live.

Question: What do you do if something goes wrong in the apartment?

– Answer: Some buildings have on-site building managers whose door you knock on when the faucet leaks. Some landlords hire a service that you call — but only during business hours. And in some small buildings, the landlord might tell you to call him directly. You need to know how the landlord wants you to respond in an emergency.

Question: Is smoking permitted?

– Answer: If you smoke, you will want to know if smoking is permitted in the rental unit. If it’s not, you should see if smoking is allowed anywhere else.

Question: What are the penalties for breaking the lease?

– Answer: If you get an unexpected job transfer to the other side of the country six months into your 12-month lease, you’ll need to break your lease. Please ask our consultants if there are any fees that apply if you need to do this.