Real Estate Market in Cyprus: Cyprus is a holiday home or even the perfect country to raise children. Before evaluating the various aspects of purchasing a property in Cyprus, it should be noted that after the Turkish invasion and occupation of Northern Cyrus in 1974, the island was divided into northern and southern (Greek) Cyprus. Northern Cyprus is not part of the European Union and is not officially recognized by the United Nations.
Most properties in the Northern Cyprus region involve too much risk for potential buyers. Their current actual ownership and therefore the right to sell such property is heavily disputed between the current occupiers and the legal owners, who were forced to relinquish these assets amid the 1974 conflict.
The issue with such properties is still very sensitive and one of the hottest problems on the island, and there is no solution to the problem at the moment, with many Cypriot-for-sale properties in southern Cyprus from the southern part of Turkey. Considered illegal, making the purchase of property very dangerous for potential buyers.
Process of buying property in Cyprus
Fortunately, the European side of southern Cyprus lacks beautiful property options. The process of purchasing real estate in Cyprus is relatively simple. However, it is highly recommended to use the service of a qualified independent attorney who has no relationship with the seller or developer of the property to be purchased. The attorney will verify that there is no loan or claim of any kind on this property, that it is related to the sales party, confirm that the related planning permissions, as well as building permissions, and your sale.
Study the agreement to ensure that there are no inherent problems for the buyer and that the agreement is legally binding. It is also important to check that there is no problem with the title deeds.
Non-European citizens need formal permission from the Council of Ministers to purchase property in Cyprus, which should usually be obtained without problems. After signing the agreement and transferring the payment to the seller, the agreement for the stamp duty payment must be taken to the local tax office, which must be done within 1 month of signing the sales agreement to avoid fines.
Also, within 2 months of the sale agreement being signed, it must be submitted to the District Land Office to officially register the purchase and secure the rightful owner of the property.
Property prices band
There is a huge difference in property prices by location in Cyprus and this is the most important ultimate objective of the buyer. In many places, it is possible to find a property with a value of EUR 100,000, but the sky is the limit as some of the most expensive properties are being sold for several million Euros.
In some areas, property prices are being heavily influenced by government investment programs.
Cyprus citizenship by investment
The Cyprus Investment Program is required to purchase a residential property at a price level of a minimum of 500 EUR + VAT. Subsequently, the program requires an additional investment of EUR 1,500,000 in one of the methods of the Investor’s Preferred Choice Program, one of which is option real estate. Therefore, many investors are choosing to provide an additional EUR 1,5 million to buy property, and fuel prices in the luxury segment of real estate in Cyprus. Since the start of the Cyprus investment program in 2013, construction on the island has steadily increased, with luxury villas as well as elite multimillion apartments in tall buildings with a straightforward sea view.
Some of the most expensive properties are sold in Limassol, which has seen a price increase in previous years. Limassol is a favorite among international buyers and applicants for Cyprus’ investment program and requires real estate with a build-to-match investment. This saw the construction of luxury private villas, which usually come with a private pool and a garden.
Cyprus Residence by Investment
Residence in Cyprus is another accelerator of real estate prices by the program. The program allows non-European applicants to reside in Cyprus if they can prove a steady income flow from abroad and purchase a property for a minimum of 300,000 EUR + VAT. Many properties fall under a price range of slightly above EUR 300,000 + VAT compared to EUR 0.5,000. Or even more is required for the Cyprus investment program, while EUR 0.3 mi + VAT can still buy very attractive properties on the island.
Different cost of Real Estate Market in Cyprus
For European citizens who can choose their property without complying with any minimum investment rules, the option is greater. Prices in the same city in Cyprus can vary greatly.
In addition to fees and taxes, additional expenses should also be taken into consideration when purchasing a property. Experience shows property buyers should allow up to 10% of the purchase price for purchase-related fees such as legal and surveyor’s fees, stamp duty, and land registry fees. Additionally, VAT tax in Cyprus is applicable for newly built assets from 5 bills.
Where to buy in Cyprus
Careful consideration of the buyer’s long-term goals is necessary to make the right decision about the location. Some of the factors to be considered are:
- Does the buyer permanently live in Cyprus?
- Is the buyer only going to use the property as a vacation home?
- Is the buyer going to give the property to the tenants?
- Buyer’s personal preferences etc.
Properties in Limassol and Paphos
Many migrating to Cyprus permanently choose Limassol as the most active and metropolitan city with a selection of international schools and many companies base their offices. Also, should you rent out your property to tenants, the rented properties are currently in high demand in Limassol due to a lack of supply and rising demand in the middle market price range. However, living in Limassol comes at an additional cost.
An airport in nearby Paphos has the advantage and is generally considered cheaper, but with many jobs located in Limassol, some opted to stay in Paphos for daily expenses and travel in Limassol. Paphos offers a more laid-back environment than Limsol, with most properties currently sold in private homes, not flats.
Properties in Nicosia, Larnaca, and seasonal cities
There is also a selection of private schools in Nicosia, the capital of Cyprus, and there is a good possibility of property exit due to stable demand from the domestic market. However, Nicosia is located inland and does not have direct use of the sea, which does not make it attractive as a holiday home or holiday opportunity.
Many other coastal holiday cities bloom during the summer months, while the winter season gives them a halt in anticipation. Such cities may be suitable for more affordable holiday homes that are to be used during the high season, but perhaps less suitable for year-round living.
Larnaca offers proximity to Larnaca Airport a seaside location, and much cheaper property prices than Limassol or Paphos. Much smaller in size than Limassol for example, the city is considered by some local real estate agents as an existing investment opportunity.
Rent your property in Cyprus
The tenures surrounding the laws of Cyprus can be difficult. If you are looking to purchase a property in Cyprus that you will be leaving, it is strongly recommended to make any purchase decisions before offering professional legal advice and discussing the rental laws surrounding this specific property. Broadly, Cypriot tenants are divided into free-market tenures and statutory tenures. Both follow very different rules, such as concerning important aspects of the eviction process, or potentially in the future The fare increases.
Risk for landlords with statutory tenants in Cyprus
Statutory tenures offer much greater protection for tenants than free-market tenants, and many international and Cypriot landlords find themselves struggling to occupy their properties or raise rents according to current market values if They lock down tenants. Category of the statutory tenancy.
In the case of resale properties, your lawyer will be able to obtain proof of the construction date from the developer who originally constructed the property, and the electrical authority in Cyprus confirms that the property was previously electrically connected.