Buying property in Cyprus
Buying a vacation property has become more than just a fad: it has become an important part of anyone’s financial portfolio. People from Western countries are increasingly buying vacation properties in the Caribbean, the Mediterranean, and other select locations in warmer climates.
One island that is seeing renewed interest is Cyprus. Being a relatively new member of the European Community, Cyprus properties have also seen an increase in demand because English is widely spoken as a second language.
Being part of the EEC is expected to be a precursor to rising property prices, making Cyprus an excellent long-term investment for real estate. As a result, the stable economy is expected to continue growing.
Investment properties in Cyprus are like tax havens
The great news for any real estate investor is that Cyprus is almost like a tax haven within the European Community. There is no inheritance tax or gift tax, pensions from abroad are taxed at a flat rate of only 5%, interest earned on foreign capital imported to Cyprus is exempt from tax, and investment income remitted to Cyprus by nations foreign are taxed at a fixed rate. of 5%. Even the corporate tax rate is a flat 10%. Cyprus has also signed double taxation agreements with many countries, including the UK. A capital gains tax of 20% is payable on the sale of real estate in Cyprus, but no capital gains tax is payable on investment gains. Personal income tax rates range from 0 to 30%.
Interestingly, there is a growing demand for properties in Cyprus from non-traditional sources, including the Middle East, Russia and its former states and also the United States.
According to Glen Young of SunSeaker Properties, the island has the double benefit of being popular with both retirees and vacationers. Retirees buy properties in Cyprus for their own use, mainly to enjoy the warm Mediterranean sun and escape the snow and cold winds of winter. Cyprus’ attraction as a second home (or a new first home) is aided by a skilled workforce, relatively affordable prices, and a friendly and welcoming population.
But Cyprus is also a popular travel and leisure destination, with affordable regular flights from major European cities. Visitors are looking for quality accommodation such as villas and apartments can offer. This makes Cyprus property a good investment, generating income until the owner wants to sell and collect…or until the owner decides to retire and use the property for his own purposes.
Of course, more than 320 days of sunshine certainly doesn’t hurt the value of the land on this Mediterranean island.
Unlike many other sunny destinations, the legal system in Cyprus is largely based on the British legal system and is designed to safeguard the property buyer. This makes it particularly attractive to UK investors. Once the sales contract is signed and a deposit is paid, the contract is registered at the land registry office. This procedure protects the property rights of the buyer until titles are issued and transferred to the buyer’s name. The contract held by the Property Registry cannot be terminated by anyone, and therefore the property cannot be leased, sold, transferred or mortgaged. Only the buyer himself can modify this status.
Investment properties in Cyprus may require some patience
With so much going for it, even Cyprus isn’t perfect. Sometimes patience is needed to buy a property in Cyprus. As with many sunny places, bureaucrats don’t always see the need to rush, and paperwork can sometimes take longer than an eager shopper would like.
In the case of purchasing an “off-plan” property, it can often take a couple of years to complete the development…meaning the buyer may need bridge financing until the property can be rented out and the income begins to trickle in. Mortgages, typically up to 75%, are readily available, and the savvy investor will look for one that requires only 30% to be paid during the construction period, making financing affordable for average investors.
With a little planning and patience, Cyprus properties are easy to come by and promise to generate a positive return on investment. Sooner or later, everyone retires; It’s never too early to go for an investment property on your favorite beach in Cyprus.