Why buy property in Cyprus?

Many Europeans and particularly British overseas real estate buyers have set their mind to buying property Cyprus, either as a holiday home, buy to let investment property or retirement home.

Knight Frank correctly predicted that average property prices in Cyprus will have appreciate with 12.5% in 2007. They ranked Cyprus as the fifth best potential return in Europe and the best 'established' market with five times the estimated growth of Portugal or Italy.

Homes Overseas Magazine summarises the situation, stating "it is hard to pinpoint hotspots within Cyprus; it is more like a hotspot in its entirety", highlighting that property prices are around a third cheaper than similar properties in Spain or Portugal.

Good Capital Growth & Rental Yields

In conclusion, Cyprus promises both capital growth and good rental yields, and despite the substantial price increases over the past couple of years, property is still comparatively cheap.

Buying Property in Cyprus - The Purchase Process

Below is the standard process for buying property in Cyprus, and issues that may affect that purchase:

• As a former British colony, the buying process in Cyprus is similar to that in the UK.
• Once an offer is made via the vendor's estate agent. It is essential at this stage that the service of an independent lawyer is engaged. The lawyer will ascertain the conditions of sale and any inclusions to the contract, such as fixtures, fittings, and furniture.
• If the offer has been accepted by the vendor, a nominal deposit of approximately 1% is made by the purchaser, in order to secure the property.
• The contract is then drawn up; whilst the contract is put together your lawyer will commence the necessary searches on the property. It is normal practice in Cyprus for only one contract to be made, so it is essential that a thorough search be carried out.
• Within two months of signing, the contract will be sent to and recorded at the land registry.
• The buyer will then need to pay all fees and taxes within one month.
• The formality of an application for the right to acquire is then sent to the Council of Ministers in Cyprus. Costs of a standard property purchase in Cyprus include the following:
• When you sign the contract you may be expected to pay a deposit of 20% - 30% of the purchase price.
• Legal fees will amount to around 0.75% of the purchase price.
• Stamp Duty will be payable on the purchase price of CYP 1.5 per thousand pounds up to CYP 100,000 and 2% per CYP 1000 thereafter.
• Transfer taxes on the purchase of a property are 3% on the first CYP 50,000; 5% on CYP 50,001-100,000; and 8% on CYP 100,001 and over.
• Annual property tax in Cyprus is charged at 2% - 3.5% of the market value of the property. In the case of individuals, however, the first CYP 100,000 of house value is tax exempt.
• Property sales are subject to Capital Gains tax at the rate of 20% on the gain, above CYP 10,000.

See Also: Legal Aspects on Buying Cyprus Property

Buying Property Abroad:

If you are considering buying a property abroad then choose your desired country location from our list below. On all our country pages you will find useful information on buying property including information on mortgages, foreign currency, solicitors, economic & tourism factors, research sources, due diligence reports, books and investment property guides to assist you in making a well informed decision when buying a property overseas.

• Investment Property Cyprus
• Buying Property in Cyprus
• Economy Cyprus
• Legal Aspects
• Mortgages Cyprus
• Tourism Cyprus
• Investment Research
• Property News Cyprus
• Books on Cyprus
• Featured Development
• Cyprus Weblog

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