Buying Guide Details

Buying Property in Cyprus

Overview

Easy to get to and very “English-friendly”
A wide range of types, locations and prices of property in Cyprus to suit most requirements
Huge appeal for lovers of beaches, watersports, golf and nature
EU membership and a legal system based on the UK’s make southern Cyprus a stable economy and safe place to buy property
Favourable climate makes it a year-round destination
Buying property in Northern Cyprus is a different matter and potential buyers should exercise extreme caution

It’s easy to see why so many British people are drawn to buying property Cyprus, either as a holiday or retirement home. A long association with the UK has left its legacy on the island, with English widely spoken, cars driven on the left hand side of the road and a legal system that owes much to Britain. Add a fantastic climate and, recently, excellent returns on property investment in the country and there’s little more that most people could want.

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Choice

Cyprus benefits from a climate that offers a mild winter, short but picturesque spring and autumn and long, hot summers. It has long been a popular holiday destination but in recent years, property development in Cyprus has rocketed as its appeal to homebuyers has grown. There is a host of off-plan property developments available in Cyprus as the in-demand resorts continue to grow. As properties in the most popular destinations of Cyprus have become more expensive, previously undeveloped areas have started to see schemes constructed to appeal to overseas buyers.

The choice of brand new and recently built property in Cyprus is overwhelming. The coast is of course the main draw for foreign homebuyers and there are plenty of properties of all types for sale in Cyprus within close proximity of the sea, or with sea views. From apartments to large, luxury villas, there is something to suit most requirements.

Golf is a growing industry in Cyprus, not surprising given that the pleasant climate means a twelve-month playing season. The Cypriot government has a long-term aim of allowing nine courses in all. Currently there are five, including one in the north, and again there is a wide range of properties for sale in Cyprus on these courses, including some of the most exclusive on the island.

Traditional properties are available in Cyprus in the form of townhouses and villas and are located in city centres, suburbs and rural areas. Refurbished old houses in a quiet village setting, yet within an easy drive of one of the island’s major cities, are a common choice for overseas buyers, though for this very reason, “bargain” properties in Cyprus are becoming more and more difficult to find, particularly in the more picturesque areas. Intrepid buyers might pick up a dilapidated property in Cyprus quite cheaply, but would have to be prepared to work hard to make it a habitable home.

The Property Market in Cyprus

The Paphos region is the most sought-after property buying destination in Cyprus, due to its ideal mix of great natural charm, wonderful climate and a wide selection of high-quality property. Whether it’s the sea, beach, golf or nature that appeal, Paphos has it all, and property prices in Paphos reflect this. Properties around Limassol and Larnaca, for example, will be significantly lower in price. Buying a property in Cyprus as a whole, is cheaper compared with buying similar properties in France, Spain and Portugal.

After a few years of dramatic property price rises in Cyprus, average growth has been at around six per cent to eight per cent over the past couple of years. Rental yields for properties in Cyprus are around the five per cent mark, though there are strict regulations on letting property in Cyprus. Most buyers of property in Cyprus are purchasing “lifestyle” – in other words, they are looking for a home to use themselves, for holidays or relocation/retirement, rather than as a pure investment. Certainly anyone looking for a “quick buck” return on their property would be looking in the wrong place in Cyprus, though long-term indicators look very favourable.

Accession to the EU, and recent adoption of the euro (replacing the Cypriot Pound) has provided Cyprus with an underlying stability, and interest rates, inflation and unemployment all indicate a safe economy to buy into. What restrictions there are on property ownership are likely to be abolished by 2009.

Properties in northern Cyprus are becoming more widely publicised now, though potential buyers should be wary of anyone suggesting that the problems inherent in purchasing a property in northern Cyprus have diminished recently. There is still a huge legal question mark hanging over the ownership of properties in what is referred to as the Turkish Republic of Northern Cyprus – the need to exercise caution and employ independent professional advice in this case is even more imperative than usual.

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The Process for Buying Property in Cyprus

When a property in Cyprus has been chosen, a buyer puts down a deposit of between £1,000 and £2,000. This represents a legally binding purchase agreement
Contracts are then drawn up, outlining the conditions of the sale, and at this point a further deposit of between 10 and 30% is payable (10% is usually paid for a resale property in Cyprus, and between 20 and 30% for a new-build property in Cyprus)
At this point the contracts are sent to the land registry and the buyer must make a written application to the Council of Ministers in Cyprus for approval to transfer ownership of the property in Cyprus into the buyer’s name. This is really only a formality (no-one from the UK has ever been denied approval), and you can live in your property in Cyprus while waiting for the approval to come through. Buyers need to present bank and character references with the application
The balance of the money is generally paid on completion for resales and in stages agreed by the developer for new-builds
All taxes are payable when approval is granted

Homes Overseas Property Club

Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.

The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.

For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com

Health

The standard of Cypriot healthcare is generally very good, and English is widely spoken in hospitals and clinics. Visiting Brits will be given emergency treatment, but subsequent treatment will need to be paid for. Private healthcare is very reasonable and is probably the best choice for anyone spending a considerable amount of time there
visa/residency issues.
Any EU citizen can stay for up to 90 days in Cyprus without a visa. Those wishing to spend longer will need a residence permit, which can be obtained from the local Cypriot authorities. This is a fairly straightforward process for anyone coming from an EU member state. That said, anyone wanting to stay permanently will need something called an Alien Registration Certificate. Proof of residence, funds and identity are required for this

Fees and taxes

Transfer tax in Cyprus varies between 3 and 8%, with additional stamp duty payable of up to 0.2% of the property’s purchase price
You will also need to budget for annual property taxes. These can be as much as up to 3.5% of the value of the property in Cyprus
In addition, allow between 1 and 2% for legal fees and anywhere between 3 and 10% for estate agents’ fees, although the norm is around 5%
Notarisation should cost around £1,350

For more information on buying property in Cyprus, please select from the following list of regions: