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Key Checks Before Buying a Repossessed Property in Cyprus

(from a Bank, Credit-Acquiring Company, or Asset Manager)

Repossessed properties often appear to be a great opportunity. The price may look attractive, the property might seem like a bargain compared to the open market, and buyers can sometimes secure unique homes that would not otherwise be available. However, as with many things that appear “too good to be true,” there are hidden risks and important details that must be clarified before you proceed with such a purchase.

Unlike transactions with private sellers or developers, banks, credit-acquiring companies, and asset managers usually sell repossessed properties on an “as is” basis. Their contractual obligations are limited, and they will rarely assist in solving past problems linked to the property. This means that all the responsibility to identify, manage, and resolve potential risks rests with the buyer and their lawyer. Below are the key points you must carefully check before committing to such an acquisition.

1) Separate Title Deed

The very first and most important step is to confirm whether the property has a separate title deed. A separate title deed proves ownership and ensures that the property can be transferred into your name. You should verify not only that a deed exists but also that it correctly reflects the property you are buying,  including its size, boundaries, and any registered notes or encumbrances. If no separate title deed is available, you may face long delays or additional complications before becoming the registered owner.

2) Surveyor’s Report

Never rely solely on the description or assurances provided by the seller. Always appoint your own independent surveyor to inspect the property. The surveyor will confirm that the property matches the details on the title deed, identify any extensions or alterations that were built without permits, and assess the structural condition.  

3) VAT

Another key issue is Value Added Tax (VAT). In Cyprus, VAT can apply to property purchases under certain conditions, and this can significantly affect the final cost. A general rule is that if the property has been connected to electricity for more than five years, it is usually proof that no VAT is payable. However, you should never assume. Always ask your lawyer to clarify whether VAT applies, as mistakes here can add tens of thousands of euros to your purchase price.

4) Electricity Reconnection

If the electricity supply has been disconnected for more than two years, the seller will not cover the cost of reconnection. These costs are not minor , they can range from around €1,000 to several thousand euros, depending on the age of the property and the technical requirements for reconnection. Buyers must budget for this possibility, especially with older repossessed properties.

5) Electricity Arrears

Banks and asset managers only take responsibility for electricity bills from the date they repossessed the property until the date of completion of your purchase. Any arrears that relate to periods before the repossession remain attached to the property and may be billed to you as the new owner. 

Always request confirmation of any arrears and, where possible, settle them before transfer.

6) Communal Expenses

The same principle applies to communal expenses. The seller will only pay for communal charges incurred during their own period of possession. Any older debts, sometimes accumulated over many years, remain outstanding and will usually pass to you as the new owner. Failure to address these debts can cause disputes with the management committee and may even result in service interruptions.

7) Transfer Fees

Finally, always check the position regarding transfer fees. In Cyprus, there is a standard 50% reduction in transfer fees in most cases. However, many repossessed properties do not qualify for this benefit. A useful tip is to look at the Land Registry file reference of the title deed: if it begins with “ΑΝΠ” (which means Compulsory Sale), then the 50% discount does not apply. Even if the file does not carry this reference, confirm early with both the seller and your lawyer whether the reduction applies, as this can make a significant difference to your total cost.

Final Thoughts

Purchasing a repossessed property can be an excellent opportunity, but only if approached with care. The limited responsibilities of banks, credit-acquiring companies, and asset managers mean that buyers must take a proactive role in investigating every detail. Ensuring that the title is clear, commissioning a professional survey, checking VAT status, calculating electricity reconnection and arrears, verifying communal debts, and clarifying transfer fee reductions are all essential steps before signing.

At Andreas Demetriades & Co LLC, we guide buyers through every stage of this process. Our team carries out detailed due diligence, liaises with surveyors and authorities, and ensures that every issue is addressed before you commit. With more than 55 years of experience in property transactions, we know how to protect our clients’ interests and help them buy with confidence.

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