Real Estate in Cyprus

Known as the "Jewel of the Mediterranean", the Republic of Cyprus is located in the eastern part of the famed sea. Real estate in Cyprus is growing rapidly in popularity with many buyers looking for the investment opportunities. There are many reasons why real estate in Cyprus is seen as such a stable investment and is being chosen by so many overseas property buyers. The trend of international buyers purchasing second homes on the island has significantly increased since it joined the EU in 2004.

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There are a few points to make the real estate of Cyprus so budding:

• Cyprus real estate is a safe investment with the Cyprus property market growing at a stable rate and property prices currently very competitive compared with other EU locations.
• The tourist industry in Cyprus is also gaining momentum making buy to let investment in Cyprus viable with the increase in demand for rental property.
• Buying a property in Cyprus also appeals to many second home buyers who feel very safe investing in a property market such as Cyprus where the legal system is based on that of the UK in addition to it being a full EU member country.
• Cyprus is regarded as one of the safest countries to purchase property in at the current time. Property in Cyprus offers a stunning climate and some beautiful beaches, a very strong existing infrastructure and excellent travel options.
• Demand and market activity has caused local property values to show a steady and at times sharp appreciation, but this trend has now a slower pace. Good properties especially resales are still abundant and local property prices are still much lower than those of other European countries.
• Buying property in Cyprus is a pleasant experience if the purchaser uses an independent Advocate who will take care of all the legalities on your behalf.

Steps to buying property in Cyprus

Firstly, the parties sign a contract of sale drawn up by the purchasers Advocate. Secondly, the purchasers Advocate arranges for a Cypriot bank account to be opened for him, which is used to pay for the property; note that interest earned on capital emanating from foreign funds is not taxed. Cyprus and the UK have a double tax treaty; therefore the bank can make arrangements for purchasers wishing to retire in Cyprus.

For this to happen, purchasers must reside in Cyprus for at least 6 months and 1 day. They may then elect to have their pension or investment income to be sent directly into their Cypriot external account and since it is generated from outside Cyprus it will be taxed at just 5%. Once signed, the contract must then be stamped by the purchasers Advocate within 30 days of its dated signature or a fine will be imposed. Stamp Duty is levied at the rate of £1.50 per £1,000 spent up to £100,000 and thereafter £2 per £1,000. The property is then encumbered on behalf of the purchaser by the Advocate, in order for the vendor to be prevented from alienating it from himself before the conveyance procedure.

Tip to buying property

Lawyers or advocates are plentiful in Cyprus. Get quotes from those who specialize in conveyance and are familiar with the application process for 'Aliens' buying property in Cyprus. Each Lawyer's fees will vary. There is no standard scale of fees, although most will apply charges according to the value of the property being bought/sold. Get quotes in writing to confirm the Lawyer's fees, Government levies, such as application fees, stamp duty and land transfer tax. Give yourself plenty of time to consider the Contract of Sale you intend to sign. Check clauses that will determine what happens if you make late payments (penalty applicable).

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