• Cyprus enjoys a warm environment throughout the year, and its individuals are well disposed towards the British, as a result of enduring excellent relations between the two countries. Attractive tax laws make it especially appealing to retired people.

    Keep in mind: This document deals only with matters relating to property purchase in the Republic of Cyprus. The Turkish-occupied part of the island (called by its federal government the Turkish Republic of Northern Cyprus – TRNC) is not globally acknowledged as a legal territory.

    Steps

    Consider the worth of buying property in Cyprus.

    The island’s accession to the EU in 2004 has resulted in improved facilities, interactions and facilities, especially in the medical and educational sectors. Its joining of the Euro on 1st January 2008 has even more underlined its position as a contemporary republic that welcomes people of all nationalities to its shores.

    • Property rates in Cyprus have risen by as much as 80 percent over the past 5 years, however still represent good value in contrast with other, more established markets, such as Portugal, Spain and Italy, especially for brand-new construct property, which remains in the majority on the island.

    Think about the popular property areas.

    This guide provides short descriptions of the locations most popular with British second house buyers, but it can only supply a location to begin. There are lots of resources to assist with further research, consisting of television and radio programmes, publications, the Internet and property exhibitions, not forgetting estate representatives in both the UK and Cyprus:

    • Interest from abroad property buyers has generally been divided in between Pathos on the western end of the south coast, Limassol on the main south coast, and Larnaca on the eastern station of the south coast. In more current years, the relative stations of Polis in the far west and Ayia Napa in the island’s far east have drawn commonly differing crowds to their coasts.
    • Polis and the surrounding area, owing to their rural area, appeal to the more environmentally-minded person, while Asia Napa has earned itself a credibility for the rowdy behaviour of a small number of mostly British summer season party-goers. Naturally, the reality lies somewhere in between the reported extremes. Out of season, Ayia Napa, for example, is a peaceful fishing town.
    • Paphos – Paphos is arguably the most popular town in Cyprus with British purchasers of 2nd houses. Thanks to the prevailing westerly winds, it tends to get the very best and worst of the island’s weather, but fortunately conditions are pleasant and hot for 9 months of the year. Centred around a harbour with a high pedestrian traffic area, Paphos is popular with families and a more retiring crowd than other parts of the island. Gain access to is quick and easy at all times, as there is a global airport just 20 minutes’ drive from the town centre.
      • Paphos is a historical gold mine, being home to a number of burial places of ancient kings and a number of important mosaics from Ancient Greek times. Contemporary life revolves around a dynamic restaurant and beach scene, especially in the popular Coral Bay location, 10 minutes’ drive from the town centre.
      • Houses in the area expense from € 120,000, while a rental property overlooking the sea might set you back € 500,000 or more. Rates are on an upward curve, and have been so for a number of years. Plans for a new marina advancement opposite Coral Bay look set to see them rise higher.
    • Limassol – Cyprus largest city, though not its capital (Nicosia is the official and administrative heart beat), Limassol is the pulse of the island and the step by which all others are evaluated. Cyprus is at its most metropolitan in Limassol. The most fashionable stores, bars and dining establishments are located there, especially in the old town location that lies behind a section of the several-mile-long drive and promenade that ranges from downtown eastwards, hugging the coastline.
      • Limassol is likewise house to Cyprus’s biggest docks, a working area located to the west of the city centre. Nearby, prepares to build a brand-new marina to lure rich yacht owners to moor locally are afoot, as part of a government effort to position Cyprus as a more upmarket destination. Similar thinking is behind plans to develop several golf courses dotted around the island, consisting of one on Limassol’s outskirts.
      • Naturally, property for sale will be a function of the new golf course advancements – modelled on the extremely successful and prestigious Aphrodite Hills Golf and Health spa resort, situated between Limassol and Paphos. This hilltop development is the island’s property standard.
    • Larnaca – Cyprus’s third town and the place of its primary scheduled airline airport, Larnaca, on the southeast coast, is a waterfront town that has its fans. It is somewhat slower in pace than Limassol, and less seasonally impacted than Paphos, and proportionately less Britons reside in this area than in the west of the island – most likely due to the fact that many people fly into Larnaca and drive straight out to the resort at which they are remaining.
      • The neighboring beaches are amongst the island’s best. Because the east coast is sheltered, the sea is calmer than elsewhere and picture-postcard blue, with golden sand beaches, especially around Paralimni and up towards Famagusta. Genuinely a location of terrific contrasts, the region is home to a national park, Cape Greco, along with Ayia Napa.
      • Second homeowners in the area tend to be Cypriot – clearly keeping a secret to themselves. Property rates are a bit higher than on the west coast, primarily because there is less land and brand-new develop advancement happening here than elsewhere on the island.

    Buy a property in Cyprus.

    The procedure of buying a property in Cyprus resembles that in the UK, with a couple of distinctions of which to be mindful. Therefore it is essential that, as you would in the UK when purchasing a property, you engage the services of a respectable, independent lawyer.

    • Authorization to buy a property needs to be acquired from the Council of Ministers by composed application. This consent is given basically as a matter of course for British citizens. Should you be buying a brand-new property from a developer, they will typically obtain permission on your behalf if asked for.
    • On discovering a property you wish to purchase, it is usual to pay a deposit (of approximately around € 2,500) to reserve it. A contract is then prepared. On signing it, the buyer pays a further deposit of 10 percent of the concurred price, or 20-30 percent when it comes to a brand-new build home.
    • Transfer of ownership must be achieved by your legal representative on your behalf. In order for new homes to be legally enabled habitation, an independent assessment should be carried out by the authorities, upon which a Last Completion Certificate is released. Just when this is in place can the title deeds for the property be provided, and it is highly advised that you insist on holding the title deeds for the property yourself.

    Cover the property fees, expenses and taxes.

    When purchasing property in Cyprus, several charges and taxes are payable. These typically amount to between 6 and 7 percent of the purchase cost and include:

    Transfer fees on the purchase of a brand-new or resale property, at 3 per cent on the first € 60,000, 5 percent on € 60,000- € 120,000, and 8 per cent on quantities above that

    • Stamp duty at 0.15 per cent of the purchase cost approximately the worth of € 120,000, and afterwards at 0.20 percent for each additional € 1,200.
    • VAT (at 15 per cent) on brand-new develop properties only.
    • The fee for the application to the Council of Ministers – € 180.
    • Legal fees – Allow 1 percent of the purchase cost.
    • Property surveyor’s cost (optional).
    • Home mortgage fees (if appropriate).
    • Forex costs (if suitable).

    Obtain a home mortgage to finance property in Cyprus.

    Buyers needing financing have the option of remortgaging their UK home, hence releasing equity built up in it, or arranging a mortgage on the Cyprus property. Remortgaging is often the more effective route for buyers, as launching equity in a UK property means that the 2nd house can be acquired for cash, effectively, without the need for another home mortgage. Increasing property costs in Cyprus may mean remortgaging is not a affordable or viable alternative for everybody:

    • Euro mortgages – Euro home mortgages are now offered in Cyprus the island has actually now totally embraced the European currency. This makes a euro home loan an appealing proposal for numerous homebuyers, especially those who survive on the island and get their UK pension in regional currency.

    Pay taxation.

    Cyprus’s taxation system resembles that of the UK. There is a double taxation agreement in between the two countries, suggesting that tax is paid in one or other nation, not both, and generally in the country where the greater rate is imposed.

    • Individual tax: non-residents
    • Non-residents are subject to income tax only on income made in Cyprus. Non-residents may likewise be responsible for capital gains tax (CGT) on the revenue from the sale of a property, according to private situations.
    • In Cyprus, for non-residents and locals alike, there is no gift tax or inheritance tax.
    • Personal tax: homeowners – For tax functions, a foreign nationwide staying in Cyprus for more than 183 days during a tax year (1 January to 31 December) is considered a local. The 183 days require not be consecutive.
    • Locals of Cyprus go through progressive taxation on around the world income.
    • Income of up to € 12,000 is not taxable. Income of € 12,000-€ 24,000 is taxed at bands of in between 20 and 25 per cent. The greatest rate payable is 30 percent on income over € 24,000.
    • Locals of Cyprus are likewise based on other taxes, including a contribution for ‘passive’ earnings, for example rental earnings. BARREL at a rate of 15 per cent is levied on many goods; a reduced rate of BARREL of 5 percent is charged on some products, primarily food and agricultural products.
    • Regional taxes – The yearly Immovable Property Ownership Tax totals up to roughly € 60-€ 180 , depending upon the value of the property. An annual tax of € 24-€ 36 might likewise be levied by the local authorities, as may a sewage tax of € 24-€ 48 Tax benefits Immigrant retired people are allowed to import individual effects, including family goods and furnishings that are for individual use and that have been used (i.e. are not brand new). Furthermore, no task is charged on the importation of a car, and retirement age immigrants are granted the concession of not being charged duty on two cars.
    • Non-residents are subject to income tax just on earnings earned in Cyprus. Income of € 12,000-€ 24,000 is taxed at bands of between 20 and 25 per cent. Regional taxes – The annual Immovable Property Ownership Tax amounts to around € 60-€ 180 sterling, depending on the value of the property. A yearly tax of € 24-€ 36 may likewise be levied by the community authorities, as might a sewage tax of € 24-€ 48 Tax benefits Immigrant retirees are allowed to import personal results, consisting of home items and furnishings that are for personal use and that have actually been used (i.e. are not brand name brand-new).

    Comprehend the monetary system.

    Cyprus changed to using the Euro as official currency on first January 2008, putting it in line with the majority of Europe, and making Euro home loans the standard on the island.

    • Banks, bureaux de change and ATMs are available in bigger towns and tourist resorts. Usual banking hours are 8:30 am to 12:30 pm, Monday to Friday, and likewise from 3:15 pm till 4:45 pm on Mondays.
    • Major credit cards are commonly accepted, as are travellers’ cheques. It is suggested to carry the latter in pounds sterling or US dollars, to prevent additional currency exchange rate charges.

    Obtain essential passports, visas and residency.

    • Passports and visas – To enter Cyprus, British residents need a passport, which need to stand for the duration of their stay. A visa is not needed.
    • Residency – Cyprus does not need EU citizens (including British nationals) to have home permits. They can, nevertheless, be useful in certain circumstances (when obtaining a chauffeur’s licence, for instance, or for tax functions) as official evidence of home. A non-Cypriot who owns property in Cyprus is entitled to a house permit. As long as he can show that he and his household are self-supporting, one will be granted without difficulty.

    Recognize with readily available communications.

    • Telephone – Telephone communications are normally outstanding in Cyprus, both for landlines and mobile reception. Public telephones are readily available in most towns and post offices.
    • Web – Web gain access to in Cyprus can be gotten through dial-up service, cable-modem, devoted lines and DSL. Broadband is increasingly commonly available in houses in addition to in the office. The Cyprus country suffix is.cy.

    Tips

    • The Cypriot economy – The Republic of Cyprus has a capitalist economy dominated by the service sector, which accounts for 76 percent of GDP. The financial services sector is crucial, and the island is likewise heavily based on tourism to fill its coffers. Given that 2001, slow tourism has led to high deficit spending, which the federal government intends to combat by the provision of up-market leisure facilities, including several marina advancements and more than a lots golf courses, to attract wealthier tourists to the island.
    • Cyprus acceded to the EU in Might 2004, and signed up with the European Exchange Rate Mechanism (ERM2) in May 2005. It prepares to adopt the euro as its currency in 2008.
    • Typically, Cyprus has exported large amounts of citrus fruits and olives, considerably to the UK. Other markets consist of cement and gypsum production, ship repair and refurbishment, textiles, light chemicals, metal products, and wood, paper, stone and clay items.

    Warnings

    • Purchasing a home abroad for satisfaction or earnings is a significant decision and one that needs to not be taken lightly. It is crucial to ensure you have actually investigated all elements thoroughly and have all the pertinent realities to hand before committing to a purchase. Private circumstances will differ commonly, so it is necessary to acquire expert advice and guidance tailored to your specific scenario, especially in areas such as property purchase, prospective rental returns, tax and mortgages.
    • This is intended as a guide only. When carrying out any type of property transaction, you ought to constantly seek expert assistance.

    Related Articles:

    Related Links:

    Useful Links:

    • Caution regarding property purchases in the occupied area of Cyprus(link)
    • Living in Cyprus(link)