It is easy to see why so many British people are drawn to buying property in Cyprus, either as a holiday or retirement home.
A long association with Britain has left its legacy on the island. English is widely spoken, cars are driven on the left hand side of the road and there is a legal system that owes much to Britain. Add a fantastic climate and, recently, excellent returns on property investment in the country, and there is little more that most people could want.
Choice of properties in Cyprus
Cyprus benefits from a climate that offers a mild winter, short but picturesque spring and autumn, and long, hot summers. It has long been a popular holiday destination but in recent years, property development in Cyprus has rocketed as its appeal to buyers has grown. There is a host of off-plan property developments available in Cyprus as the in-demand resorts continue to grow. As properties in the most popular destinations of Cyprus have become more expensive, previously undeveloped areas have started to see schemes constructed to appeal to overseas property buyers.
The choice of brand new and recently-built property in Cyprus is overwhelming. The coast is of course the main draw for foreign buyers and there are plenty of properties of all types for sale in Cyprus within close proximity of the sea, or with sea views. From apartments to large, luxury villas, there is something to suit most requirements.
Golf is a growing industry in Cyprus, not surprising given that the pleasant climate means a 12 month playing season. The Cypriot Government has a long-term aim of allowing nine courses in all. There is a wide range of properties for sale in Cyprus on these courses, including some of the most exclusive on the island.
Traditional Cyprus properties are available in the form of townhouses and villas and are located in city centres, suburbs and rural areas. Refurbished old houses in a quiet village setting, yet within an easy drive of one of the island's major cities, are a common choice for overseas buyers. However, for this very reason, cheap properties in Cyprus are becoming more and more difficult to find, particularly in the more picturesque areas. Intrepid buyers might pick up a dilapidated property in Cyprus quite cheaply, but would have to be prepared to work hard to make it a habitable home.
The property market in Cyprus
Buying property in Cyprus as a whole, is cheaper compared with buying similar homes in France, Spain and Portugal.
After a few years of dramatic price rises of property in Cyprus, average growth has been at around 6 per cent to 8 per cent over the past couple of years. Rental yields for a Cyprus property are around the 5 per cent mark, although there are strict regulations on letting Cyprus properties. Most buyers of Cyprus property are purchasing a lifestyle. In other words, they are looking for a home to use themselves, for holidays or relocation or retirement, rather than as a pure investment. Certainly anyone looking for a quick buck return on their property would be looking in the wrong place in Cyprus, though long term indicators look very favourable.
Accession to the EU, and recent adoption of the euro (replacing the Cypriot pound) has provided Cyprus with an underlying stability, and interest rates, inflation and unemployment all indicate a safe economy to buy into. What restrictions there are on property ownership are likely to be abolished by 2009.
Kyrenia property (northern Cyprus) is becoming more widely publicised now. However, potential buyers should be wary of anyone suggesting that the problems inherent in buying property in northern Cyprus have diminished recently. There is still a huge legal question mark hanging over the ownership of properties in what is referred to as the Turkish Republic of Northern Cyprus. The need to exercise caution and employ independent professional advice in this case is even more imperative than usual. See North Cyprus Property Law.
The process for buying property in Cyprus
- When a property has been chosen, the buyer puts down a deposit of between £1,000 and £2,000. This represents a legally binding purchase agreement.
- Contracts are then drawn up, outlining the conditions of the sale, and at this point a further deposit of between 10 per cent and 30 per cent is payable (10 per cent is usually paid for a re-sale property, and between 20 per cent and 30 per cent for a newly-built home).
- At this point the contracts are sent to the Land Registry and the property buyer must make a written application to the Council of Ministers in Cyprus for approval to transfer ownership of the property into the property buyer's name. This is really only a formality, and you can live in your property while waiting for the approval to come through. Buyers need to present bank and character references with the application.
- The balance of the money is generally paid on completion for re-sales and in stages agreed by the developer for new builds.
- All taxes are payable when approval is granted.
Fees and taxes
- Transfer tax in Cyprus varies between 3 per cent and 8 per cent, with additional Stamp Duty payable of up to 0.2 per cent of the property's purchase price.
- You will also need to budget for annual property taxes. These can be as much as up to 3.5 per cent of the value of your home.
- In addition, allow between 1 per cent and 2 per cent for legal fees and anywhere between 3 per cent and 10 per cent for estate agents fees, although the norm is around 5 per cent.
- Notarisation should cost around £1,350.
Hot spots to buy property in Cyprus
This is the most sought-after in Cyprus, due to its ideal mix of great natural charm, wonderful climate and a wide selection of high quality properties. Whether it is the sea, beach, golf or nature that appeal, Paphos has it all, and prices of properties for sale reflect this.
- Population: 792,604
- Capital: Nicosia
- Languages: Greek, Turkish
- Area (sq km): 9,250
- Currency: euro
- Dialling Code: +357
- Emergency services: 112
The standard of Cypriot healthcare is generally very good, and English is widely spoken in hospitals and clinics. Visiting British people will be given emergency treatment, but subsequent treatment will need to be paid for. Private healthcare is very reasonable and is probably the best choice for anyone spending a considerable amount of time there.
There is a good selection of both scheduled and charter flights year-round from most major airports around Britain to Cyprus, with extra flights provided during the high season
Visa and residency issues
Any EU citizen can stay for up to 90 days in Cyprus without a visa. Those wishing to spend longer will need a residence permit, which can be obtained from the local Cypriot authorities. This is a fairly straightforward process for anyone coming from an EU member state. That said, anyone wanting to stay permanently will need something called an Alien Registration Certificate. Proof of residence, funds and identity are required for this
Buying property in Cyprus - top tip
While low prices are attracting certain buyers to the Turkish north of the island, would-be purchasers should be aware that buying a home in the north brings with it more risks than in the south, most notably where the issue of clean title is concerned.
Some information contained herein may have changed since it was first published. HomesOverseas strongly advises you to seek current legal and/or financial advice from a qualified professional.