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Property in Cyprus

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Irina MazurIrina Mazur
Irina Mazur
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    Buying property in Cyprus

    Real estate experts consider Cyprus the most promising and profitable European market for the coming years. This is due to the stability and attractiveness of prices, the incredible diversity of real estate, preferential taxation, as well as the influx of new infrastructure projects and government initiatives to strengthen the real estate sector.

    ✅ Steady growth of the real estate market

    In 2022, property sales in Cyprus exceeded pre-pandemic levels and showed strong results.

    • According to a report by the Cyprus Securities Commission, approximately 14% of investments on the island are in real estate.
    • The total amount of real estate transactions in Cyprus in 2022 reached 5.8 billion euros.
    • Total deals closed in 2022 reached 22,500 compared to 20,100 in 2021, indicating a 12% increase, even exceeding the 2019 pre-pandemic peak of 17,200 by 31%.
    • During 2022, foreigners purchased a total of 5,928 properties in Cyprus compared to 3,691 properties in 2021, representing an increase of 61%.

    According to the statistics of the Central Bank of Cyprus, the value of residential property in Cyprus increases by 15% annually.

    ✅ Minimum taxes

    An investor in Cyprus enjoys a favorable tax environment:

    • Low real estate transfer fees and taxes, including stamp duty
    • Competitive VAT rates ranging from 5 to 19%
    • No capital gains tax or inheritance tax
    • There is no annual property tax in Cyprus, which means you do not have to pay taxes for the mere fact of owning property in Cyprus.

    ✅ High yield

    Cyprus has the advantage of a longer tourist season than most other European countries, which is why Cypriot property is the highest yielding property in the EU with an average of 7% per annum.

    In January 2023 alone, 90,549 tourists visited Cyprus, which is 106.1% more compared to the same month in 2022.

    Also, the demand for property rentals is driven by the influx of foreign companies that decide to locate their headquarters in Cyprus and relocate their employees, which creates a high demand in the residential real estate market.

    ✅ Investment future of Cyprus

    Cyprus is opening up to foreign investors and entrepreneurs in many sectors.

    The Cyprus economy is constantly growing thanks to the government’s efforts to ensure that investments continue to come from foreign companies and citizens offering a range of tax benefits and incentives.

    In 2023, a number of sectors in Cyprus are predicted to continue to be major contributors to the global economy and bring many benefits to entrepreneurs and foreign investors.

    Some of the most significant industries that are showing strong growth include:

    • Financial Technology and Innovation Sector (more than 450 start-ups were registered in Cyprus in 2022, worth more than 3.7 billion euros)
    • Tourism
    • Real estate
    • Pharmaceuticals
    • Shipping
    • Energy

    Cyprus has a growing energy sector and is working to develop its natural gas and renewable energy resources through solar energy initiatives.

    FAQ

    Why is it better to buy a new property in Cyprus?

    New build properties are constructed with the newest developed material’s resulting in solid, eco-friendly, insulated well for the brief winter period which is energy saving.

    With the use of these new energy efficient building materials, the summer months the property remains cooler and in the winter months retains the warmth, thus saving on energy bills.

    In addition, a new build property allows the purchaser to select what materials and interior design are preferred suiting personal taste.

    As a new build the developer has a legal obligation to ensure warranty of the development in accordance with strict Government quality control.

    How to become a Resident of Cyprus by buying property?

    You can obtain a residence permit in Cyprus through the purchase of real estate under the program for investors. To do this, you need to buy a new Cypriot property with a minimum value of 300.000 euros. Cyprus Permanent Residence by Investment is one of the fastest and easiest investor programs in Europe.

    In addition, the investor does not need to permanently reside in Cyprus – it is enough to visit Cyprus 1 time within 1 year from the date of approval of the application.

    What are the taxes when buying property in Cyprus?

    The main taxes when buying property in Cyprus are VAT for primary property and Transfer Fee for secondary property.

    • VAT – 19% on the purchase of new real estate. A reduced VAT rate of 5% applies to the first 200 sq.m. When buying a secondary property, VAT is not charged.
    • Tax on the transfer of ownership (Transfer Fee) levied on the transfer of ownership of real estate – only for secondary real estate and depends on the market value of the object.
    • The stamp duty (Stamp duties) is paid by the buyer upon registration of the contract of sale in the amount of 1.5 euros for every thousand euros of the price paid for the purchase of a property in the amount of up to 170,860 euros, and 2 euros (per thousand) – for the amount exceeding 170,860.
    The best cities to buy property in Cyprus?

    The most popular cities for buying property in Cyprus are Larnaca, Limassol, Paphos and Nicosia. Different regions of Cyprus have their own characteristics.

    ⇒ Limassol is the business center of Cyprus, the offices of most international corporations, IT companies, legal, financial and consulting groups are located in this city. Limassol leads in real estate transactions for 2022, accounting for 50% of transactions.

    ⇒ Paphos is a great place to invest in real estate if you are looking for a tourist area. The weather, infrastructure and family focus of this city is also great for those who are looking for a safe place to move and live with the whole family in Cyprus.

    ⇒ Larnaca is the third largest city in Cyprus, which is now one of the most popular areas of the island for holidays, living and investment. The main international airport in Cyprus and long sandy beaches are located in Larnaca. This cozy small town is perfect for relaxing, unhurried family or business life.

    ⇒ The capital of Cyprus, Nicosia, is located in the center of the island. Public sector offices, universities and international organizations are concentrated in this city. Landlocked, this city is the least tourism oriented. Therefore, Nicosia is more popular for investment in commercial real estate.

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