Buying a home abroad: exploring real estate opportunities in Cyprus

When looking to purchase real estate, foreign investors find Cyprus to be a popular location. It is understandable why so many individuals decide to invest in real estate in Cyprus, given the country's beauty and dynamic culture. Buying a property in another country, nevertheless, may be challenging. The purpose of this guide is to simplify the process of understanding Cyprus's real estate market for foreign buyers. We'll go over everything you need to know in an easy-to-understand way and offer clear insights to give you the confidence you need to move forward with the process.

Understanding the real estate market in Cyprus

Familiarize yourself as much as you can with the Cyprus real estate market before you start the process of buying a house here. Cyprus has experienced a boom in real estate development over the past decade, meeting demand from both local and foreign buyers. The choices are varied and plentiful, ranging from luxury villas located at coastal towns to modern apartments in big cities.

One of the key attractions of investing in Cyprus is its relatively affordable property prices compared to other European destinations. Cyprus has a variety of properties to fit different budgets and preferences, whether or not someone is looking for a retirement property, vacation home, or a profitable investment opportunity.

Property ownership for foreigners in Cyprus

Foreigners might wonder if they can own property in Cyprus. The good news is, yes, they can! Cyprus welcomes foreign investors to its real estate market, and allows them to purchase and own property without many restrictions.

Residency through property ownership

Purchasing property in Cyprus can also open doors to residency. By investing in real estate, individuals may qualify for residency, offering the opportunity to live and work in this beautiful Mediterranean country.

Legal framework and regulations

Although it might be difficult to deal with the legal aspects of buying property abroad, it can be made easier by being aware of Cyprus's regulatory framework. Real estate purchases in Cyprus by non-EU citizens are allowed, but with certain restrictions and regulations.

It's advisable to seek the guidance of a reputable lawyer specializing in real estate transactions in Cyprus. They may offer essential assistance in managing legal requirements, conducting due diligence, and ensuring an effortless transfer of property ownership.

Choosing the right location

Popular destinations for property investment in Cyprus include:

• Limassol: Known for its cosmopolitan vibe and vibrant nightlife, Limassol is a coastal city full of life and with a thriving real estate market.
• Paphos: Paphos, has many spots known as UNESCO World Heritage Sites and has beautiful shoreline, archaeological wealth, and is also rich in mythology and history.
• Larnaca: Larnaca is a popular destination for people looking for a combination of contemporary conveniences and traditional elegance because of its popular marina and relaxed environment.
• Famagusta district: It has some of the most beautiful beaches on the island and a perfect environment for leisurely beachside life.

Financing and investment considerations

When buying property abroad, it's essential to consider financing options and investment implications. While some buyers may opt to purchase property outright, others may choose to explore financing options available in Cyprus.

Local banks in Cyprus offer mortgage facilities to both residents and non-residents, with favorable terms and competitive interest rates. However, it's advisable to conduct thorough research and seek expert advice to determine the most suitable financing option based on your individual circumstances and investment goals.

Additionally, it's important to consider the potential return on investment (ROI) of your property purchase in Cyprus. Due to Cyprus' thriving tourist sector and steady economic growth, the island offers promising opportunities for rental income and long-term capital appreciation.

Property transaction taxes in Cyprus

Value Added Tax (VAT):

• VAT in Cyprus is set at a standard rate of 19%.
• Primary real estate purchases are subject to VAT, while secondary market properties are VAT-free.
• Investors may qualify for a reduced VAT rate of 5% if the property is their first and intended as their primary residence. Certain criteria, such as property size and value, apply.
• If the property is sold within 10 years or not used as a primary residence, investors must reimburse the difference between the reduced and standard VAT rates.

Stamp duty:

• Stamp duty is applicable to property transactions in Cyprus, regardless of whether it's on the primary or secondary market.
• The stamp duty rate varies based on the property value:
• 0.15% for properties valued between €5,000 and €171,000.
• 0.2% for properties valued over €171,000.
• Stamp duty must be paid within 30 days of the contract's conclusion.

Property transfer fee:

• Property transfer fees apply only to secondary market purchases.
• The fee ranges from 3% to 8%, depending on the property value:
• 3% for properties valued up to €85,430.
• 5% for properties valued between €85,430 and €170,860.
• 8% for properties valued over €170,860.

• If a property has multiple owners, the tax is distributed proportionally among them.

Immovable property tax:

Immovable property tax was abolished in Cyprus in 2017 by the House of Representatives. Therefore, it is no longer applicable to property owners.

Buying a home abroad is an exciting adventure, and Cyprus offers a wealth of opportunities for those looking to invest in Mediterranean real estate. There are endless options, ranging from gorgeous beachfront properties to small village homes.

People who consider buying a property in Cyprus, can turn that dream into reality by understanding the local market, handling the legal framework, and making informed investment decisions.