Transferring Funds

The vast majority of buyers return to the UK after their ‘buying trip’, and wait until their Cyprus home is completed. They will, therefore, need to make arrangements to transfer funds to Cyprus as and when each stage payment is due (see also the Payment Terms section).

Initial ‘Holding’ Payment Whilst In Cyprus

Before we cover this, however, we need to mention the initial ‘holding’ payment you make in Cyprus, at the time of signing the contract, to secure your property so that the developer takes it off the market. This then gives you time to return to the UK and arrange to transfer the initial 30% within 30 days of the contract date, so that your lawyer can deposit your contact at the Land Registry Office.

This ‘holding payment is usually CY£1-2000 depending on the value of the property. Developers are often flexible on this, but will probably not accept less than CY£1000. (Unfortunately, most developers have had cases of ‘buyers’ who went to Cyprus for a holiday with no intention of buying a property, then got carried away and asked a developer to hold a property for them until they got back to the UK and sent some money over. Invariably, this often did not materialise, and in the meantime the developer had told other prospective buyers that the property had been sold).

There are various ways of paying this ‘holding’ amount. Many of the larger developers accept credit cards, and this is probably the easiest way. However, before you leave the UK you will probably not know which property you are going to choose, so you need to make contingency plans in case the developer does not accept credit cards. So, the next easiest way is to take travellers cheques (allowing a higher Sterling amount to cover the exchange rate). These can then be signed and handed over to your lawyer or the developer, who can bank them.

Alternatively, if you have Internet banking, you can go to an Internet café armed with the lawyer’s or developer’s bank details and transfer the money. (The lawyer or developer will probably let you do this from their office). You can do the same by telephone banking, but before you leave the UK, make sure you call your bank and get the number to call if dialling from overseas, as the usual ‘0845’ numbers will not work from abroad.

Then, of course, there is good old cash, but this will need to be in Sterling or another foreign currency, not Cyprus Pounds.

Making Stage Payments

There are various ways you can make bank-to-bank overseas transfers, some being a lot cheaper than others. What you have to bear in mind is that there are 2 elements to this. Firstly, there is the exchange rate between Sterling and Cyprus Pounds that the financial institution will offer you, and this of course changes daily. Secondly, there are possible charges that may be made, especially by High Street banks.

Whilst we are not financial advisers, experience with clients has shown that it is best to shop around. Many clients have told us that the least attractive rates came from High Street banks, and many have used specialist currency transfer companies. These companies are in the business of buying and selling currencies, and buy when the rate is favourable. This means that they can often offer you a better exchange rate than that prevailing at the time you want to make a transfer, because they bought it weeks or months earlier. Some also offer a guaranteed rate for future transactions, so if you are making stage payments over a period of time, you will know exactly how much it is going to cost you in advance. Of course, the exchange rate can move either way, so it’s a bit like making the choice between a fixed rate mortgage and the variable rate, but some clients have prefer to know exactly what their outgoings will be.

Whichever method you use, we would recommend that you make the transfers to your lawyer’s Client Account as opposed to direct to the developer.

Opening A Bank Account In Cyprus

Contrary to what some people might tell you, it is not absolutely necessary to open a bank account in Cyprus on your ‘buying trip’. When you make stage payments, you are going to send them to your lawyer or the developer. If you transfer them to an account you have in Cyprus, you then have to arrange another mechanism to pay the funds out of that account over to the lawyer or the developer. This will inevitably mean more bank charges. If, however, you wish to do it this way, it is probably easiest to sign a Power Of Attorney form at your lawyer’s office whilst in Cyprus, authorising your lawyer to contact your bank and make payments to the developer or anyone else. It is advisable to set op a Power Of Attorney anyway, as it saves the lawyer sending any documents requiring your signature in the post to you. Power Of Attorney is quite safe, as it does not give the lawyer carte blanche to sign anything – you still have to authorise each action they take, but you can do this by email and save time.

Having said this, it costs nothing to set up a bank account whilst in Cyprus, and you don’t even need to put any money into it – they will keep it open for usually 6 months. If you are likely to be travelling to Cyprus during the building period, you may find it useful to have an account there so you can pay for things locally as opposed to using your UK credit or debit card, and reducing the need for traveller’s cheques etc. You can simply transfer funds from your UK bank to your Cyprus bank, who will also offer you an ATM card so that you can draw cash whilst on the island.

To open an account, simply walk into the bank of your choice armed with your passport, and ask to open an account. It will only take a few minutes, and they will usually give you the account number there and then. We have had dealings with virtually all the banks in Cyprus over the years, and have had no bad reports about any of them. If you don’t have any particular preference, it would make sense to use the same bank as your lawyer.

Important Note
The information on this website is based on our interpretation of the current regulations in Cyprus. Whilst we make every endeavour to provide accurate information, we cannot accept liability for any loss incurred due to inaccuracies or omissions on this website. Prospective buyers are strongly recommended to take independent legal advice before entering into any agreements or parting with any money.