• Cyprus takes pleasure in a warm environment throughout the year, and its people are well disposed towards the British, as a result of enduring great relations between the two nations. Attractive tax laws make it particularly interesting senior citizens.

    Note: This file deals just 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 internationally recognised as a legal territory. Because of this, we do not back acquiring property there. Note that if you do so and the political scenario changes, your home could be at risk.

    Steps

    Consider the value of buying property in Cyprus.

    The island’s accession to the EU in 2004 has led to improved infrastructure, facilities and communications, particularly in the educational and medical sectors. Its joining of the Euro on 1st January 2008 has further underlined its position as a modern-day republic that welcomes people of all citizenships to its coasts.

    • Property rates in Cyprus have actually increased by as much as 80 per cent over the past five years, but still represent good value in contrast with other, more established markets, such as Portugal, Spain and Italy, particularly for brand-new develop property, which remains in the majority on the island.

    Think about the popular property places.

    This guide provides brief descriptions of the locations most popular with British 2nd house buyers, however it can just offer a place to start. There are lots of resources to help with more research, including television and radio programs, magazines, the Internet and property exhibits, not forgetting estate agents in both the UK and Cyprus:

    • Interest from abroad property buyers has traditionally been divided between Pathos on the western end southern coast, Limassol on the central south coast, and Larnaca on the eastern station of the south coast. In more recent years, the relative stations of Polis in the far west and Ayia Napa in the island’s far east have drawn widely varying crowds to their coasts.
    • Polis and the surrounding area, owing to their rural location, attract the more environmentally-minded person, while Asia Napa has actually earned itself a reputation for the rowdy behaviour of a small number of mostly British summer party-goers. Naturally, the truth lies somewhere between the reported extremes. Out of season, Ayia Napa, for example, is a peaceful fishing town.
    • Paphos – Paphos is probably the most popular town in Cyprus with British buyers of 2nd houses. Thanks to the dominating westerly winds, it tends to get the very best and worst of the island’s weather, but fortunately conditions are hot and enjoyable 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. Access is quick and simple at all times, as there is a worldwide airport just 20 minutes’ drive from the town centre.
      • Paphos is a historical treasure trove, being home to a number of tombs of ancient kings and a variety of important mosaics from Ancient Greek times. Contemporary life revolves around a bustling dining establishment and beach scene, especially in the popular Coral Bay location, 10 minutes’ drive from the town centre.
      • Apartment or condos in the location cost from € 120,000, while a rental property overlooking the sea could set you back € 500,000 or more. Costs are on an upward curve, and have actually been so for several years. Strategies for a brand-new marina advancement opposite Coral Bay look set to see them rise higher.
    • Limassol – Cyprus largest city, though not its capital (Nicosia is the authorities and administrative heartbeat), Limassol is the pulse of the island and the step by which all others are judged. Cyprus is at its most metropolitan in Limassol. The most trendy shops, bars and restaurants are located there, especially in the old town area that lies behind an area of the several-mile-long drive and promenade that ranges from downtown eastwards, hugging the shoreline.
      • Limassol is likewise house to Cyprus’s largest docks, a working area situated to the west of the city centre. Nearby, plans to build a new marina to attract rich private yacht owners to moor in your area are afoot, as part of a federal government initiative to place Cyprus as a more upmarket location. Comparable thinking is behind strategies to establish a number of golf courses dotted around the island, including one on Limassol’s borders.
      • Naturally, property for sale will be a function of the new golf course advancements – modelled on the prestigious and hugely successful Aphrodite Hills Golf and Day spa resort, situated between Limassol and Paphos. This hilltop advancement is the island’s property criteria.
    • Larnaca – Cyprus’s third town and the location of its primary scheduled airline company airport, Larnaca, on the southeast coast, is a waterfront town that has its fans. It is rather slower in pace than Limassol, and less seasonally impacted than Paphos, and proportionately less Britons live in this location than in the west of the island – probably since the majority of people fly into Larnaca and drive straight out to the resort at which they are staying.
      • The nearby beaches are among the island’s finest. Since the east coast is sheltered, the sea is calmer than elsewhere and picture-postcard blue, with golden sand beaches, particularly around Paralimni and up towards Famagusta. Truly a location of fantastic contrasts, the region is home to a national forest, Cape Greco, in addition to Ayia Napa.
      • 2nd house owners in the area tend to be Cypriot – undoubtedly keeping a secret to themselves. Property prices are a little bit higher than on the west coast, mainly since there is less land and new construct advancement happening here than somewhere else on the island.

    Buy a property in Cyprus.

    The procedure of buying a property in Cyprus is similar to that in the UK, with a few distinctions of which to be mindful. Therefore it is necessary that, as you would in the UK when purchasing a property, you engage the services of a trusted, independent solicitor.

    • Authorization to buy a property should be obtained from the Council of Ministers by written application. This permission is given more or less as a matter of course for British people. Should you be buying a new property from a designer, they will typically make an application for approval on your behalf if asked for.
    • On discovering a property you want to purchase, it is usual to pay a deposit (of up to around € 2,500) to book it. A contract is then prepared. On signing it, the purchaser pays a more deposit of 10 percent of the concurred rate, or 20-30 percent when it comes to a brand-new construct house.
    • Transfer of ownership need to be accomplished by your legal representative on your behalf. In order for brand-new properties to be lawfully enabled habitation, an independent examination needs to be performed by the authorities, upon which a Final Completion Certificate is released. Just when this remains in place can the title deeds for the property be issued, and it is highly advised that you insist on holding the title deeds for the property yourself.

    Cover the property expenses, taxes and costs.

    When purchasing property in Cyprus, numerous costs and taxes are payable. These normally total up to between 6 and 7 per cent of the purchase price and consist of:

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

    • Stamp responsibility at 0.15 per cent of the purchase price up to the value of € 120,000, and afterwards at 0.20 per cent for every single additional € 1,200.
    • VAT (at 15 per cent) on new construct residential or commercial properties only.
    • The charge for the application to the Council of Ministers – € 180.
    • Legal costs – Permit 1 percent of the purchase price.
    • Property surveyor’s charge (optional).
    • If relevant), home loan fees (.
    • If relevant), foreign exchange costs (.

    Obtain a home loan to fund property in Cyprus.

    Buyers needing financing have the option of remortgaging their UK house, hence releasing equity built up in it, or organizing a home mortgage on the Cyprus property. Remortgaging is often the more effective path for buyers, as releasing equity in a UK property indicates that the second house can be purchased for money, efficiently, without the requirement for another home loan. Nevertheless, increasing property prices in Cyprus might imply remortgaging is not a feasible or economical option for everyone:

    • Euro mortgages – Euro mortgages are now available in Cyprus the island has actually now completely embraced the European currency. This makes a euro home loan an attractive proposal for lots of property buyers, particularly those who survive on the island and get their UK pension in regional currency.

    Pay tax.

    Cyprus’s taxation system resembles that of the UK. There is a double taxation arrangement in between the two nations, indicating that tax is paid in one or other nation, not both, and usually in the country where the higher rate is imposed.

    • Individual tax: non-residents
    • Non-residents are subject to income tax just on income earned in Cyprus. Non-residents might likewise be liable for capital gains tax (CGT) on the earnings from the sale of a property, according to specific circumstances.
    • In Cyprus, for residents and non-residents alike, there is no gift tax or inheritance tax.
    • Individual tax: citizens – For tax functions, a foreign national staying in Cyprus for more than 183 days during a tax year (1 January to 31 December) is considered a local. The 183 days need not be successive.
    • Citizens of Cyprus are subject to progressive taxation on worldwide income.
    • Income of up to € 12,000 is not taxable. Earnings of € 12,000-€ 24,000 is taxed at bands of between 20 and 25 per cent. The greatest rate payable is 30 percent on earnings over € 24,000.
    • Citizens of Cyprus are also based on other taxes, including a contribution for ‘passive’ income, for example rental income. VAT at a rate of 15 per cent is levied on most items; a lowered rate of VAT of 5 percent is charged on some items, generally food and agricultural products.
    • Regional taxes – The annual Immovable Property Ownership Tax totals up to approximately € 60-€ 180 , depending upon the value of the property. A yearly tax of € 24-€ 36 might also be levied by the community authorities, as may a sewage tax of € 24-€ 48 Tax privileges Immigrant senior citizens are permitted to import personal effects, consisting of family goods and furniture that are for individual usage which have actually been utilized (i.e. are not brand new). Additionally, no task is charged on the importation of a vehicle, and retirement age immigrants are granted the concession of not being charged duty on 2 cars.
    • Non-residents are subject to earnings tax only on income made in Cyprus. Income of € 12,000-€ 24,000 is taxed at bands of in between 20 and 25 per cent. Regional taxes – The yearly Immovable Property Ownership Tax amounts to roughly € 60-€ 180 sterling, depending on the value of the property. A yearly tax of € 24-€ 36 might likewise be levied by the local authorities, as may a sewage tax of € 24-€ 48 Tax opportunities Immigrant senior citizens are allowed to import individual effects, consisting of household items and furniture that are for individual usage and that have actually been used (i.e. are not brand name new).

    Understand the monetary system.

    Cyprus altered to utilizing 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 modification and ATMs are available in bigger towns and tourist resorts. Typical banking hours are 8:30 am to 12:30 pm, Monday to Friday, and also from 3:15 pm till 4:45 pm on Mondays.
    • Major credit cards are commonly accepted, as are visitors’ cheques. It is recommended to carry the latter in pounds sterling or United States dollars, to avoid extra currency exchange rate charges.

    Get necessary passports, visas and residency.

    • Passports and visas – To enter Cyprus, British people require a passport, which should stand throughout of their stay. A visa is not needed.
    • Residency – Cyprus does not need EU residents (including British nationals) to have home licenses. They can, however, be useful in specific situations (when requesting a motorist’s licence, for instance, or for tax functions) as main proof of residence. A non-Cypriot who owns property in Cyprus is entitled to a house license. As long as he can prove that he and his family are self-supporting, one will be granted without difficulty.

    Be familiar with offered interactions.

    • Telephone – Telephone interactions are usually excellent in Cyprus, both for landlines and mobile reception. Public telephones are available in a lot of towns and post offices. Calls can be made with money and phone cards, which can be purchased retail outlets and post offices. The country dialling code is +357.
    • Web – Web access in Cyprus can be acquired through dial-up service, cable-modem, devoted lines and DSL. Broadband is significantly commonly readily available in homes in addition to in the work environment. The Cyprus nation 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 monetary services sector is key, and the island is also greatly depending on tourism to fill its coffers. Considering that 2001, slow tourism has actually resulted in high budget deficits, which the federal government intends to combat by the provision of up-market leisure centers, including several marina advancements and more than a dozen golf courses, to attract wealthier tourists to the island.
    • Cyprus acceded to the EU in Might 2004, and signed up with the European Currency exchange rate Mechanism (ERM2) in Might 2005. It plans to adopt the euro as its currency in 2008.
    • Typically, Cyprus has exported large amounts of citrus fruits and olives, substantially to the UK. Other industries consist of cement and plaster production, ship repair and refurbishment, fabrics, light chemicals, metal products, and wood, stone, paper and clay products.

    Cautions

    • Buying a house abroad for pleasure or earnings is a major decision and one that ought to not be taken lightly. It is essential to guarantee you have actually researched all aspects completely and have all the pertinent realities to hand before dedicating to a purchase. Specific scenarios will differ extensively, so it is essential to acquire expert suggestions and guidance tailored to your particular scenario, specifically in areas such as property purchase, potential rental returns, taxation and home mortgages.
    • This is meant as a guide just. When undertaking any type of property transaction, you need to constantly look for expert help.

    Related Articles:

    Related Links:

    Useful Links:

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