The law and estate agents in Cyprus: Choose carefully

All estate agents must be registered and obtain a license. A registered estate agent must satisfy the Cyprus real estate Law 273(1) 2004 which stipulates and regulates the manner in which registered estates agents should embark on their business. A registered estate agent must meet certain preconditions including professional indemnity insurance and as the current law exists for a minimum sum of ¤171,000, before being issued with a license to practice.

A registered estate agent must display prominently his/her registration certificate.

Why choose a registered Estate Agent

Other than the protection afforded by choosing a registered estate agent the Purchaser can also receive financial rewards later.  Those who deal with non-registered and illegal estate agents may forgo their legal right to have the commission charged by an estate agent deducted for income/capital gains tax purposes.  That is to say, at the time of resale the tax authorities will only apply the approved allowance for commission against tax if the purchase and hence payment of commission was made from and to a legal, registered estate agent.

Commission

Beware of illegal activities by non-registered estate agents.  Many unregistered agents may charge as much as 14% if not more for a sale!  Under the Law, registered estate agents can charge between 3 and 5% on the price plus VAT in addition.  What is actually charged depends on the geographical/local conditions applying at the time of purchase, so you should be clear how much you will be charged for the concluded purchase. If there is an agreement this must not exceed 5%. Anything more than that it is illegal unless of course a higher rate is agreed beforehand and the parties to the agreement give their mutual consent. The commission is always paid by the seller and no purchaser should be asked to contribute to such costs.