The Ultimate Guide to Buying Property in Cyprus for Foreign Investors
Cyprus saw significant growth in 2018, with its real estate booming. This sector made up 38.5% of the country’s development. It added 16% to the total value of goods and services produced there. The property market in Cyprus is slowly improving. It’s still a top choice for global investors. They can find various properties here, suitable for many different tastes and budgets.
Key Takeways
- Cyprus’s real estate sector has been a significant driver of the country’s economic growth, accounting for 38.5% of the annual growth rate in 2018.1
- The Cypriot real estate market contributes 16% to the country’s Gross Value Added, highlighting its importance to the economy.1
- Foreign investors account for 47% of total real estate transactions in Cyprus, indicating their prominent role in the market.1
- Property prices in Cyprus, catering to a wide range of preferences, vary widely, with a two-bedroom townhouse in Paphos costing around €160K and a three-bedroom villa with a pool starting at €220K. Cyprus offers favourable tax conditions for property investors, including low property taxes and double taxation treaties with over 60 countries.
Both EU and non-EU citizens can buy real estate in Cyprus. However, there are rules they need to know.
Legal Framework and Regulations for Foreign Buyers
EU citizens can freely purchase property in Cyprus. However, for non-EU individuals, there are certain limits. They can typically buy up to one acre of land or house/apartment. Non-EU buyers must seek permission from the Council of Ministers before purchasing, a process that ensures transparency and legality.
Residency and Citizenship Options Through Property Investment
Investing at least €300,000 in Cyprus offers a unique and exclusive benefit. Non-EU citizens can obtain a ‘Golden Visa ‘, which grants them permanent EU residence. This prestigious opportunity is a key factor that makes Cyprus a top choice for property investment and expat living.
Another thing to note is the taxes. Depending on the property’s price, you pay 3% to 8% property transfer tax. Also, there is a 19% Value Added Tax (VAT) for new property.3 Stamp duty, which the buyer pays, changes based on the property’s price and type.
Prices are higher in places like Limassol and Paphos, where many want homes. But, in general, Cyprus has more affordable property than other European spots. This makes it a good choice for buy-to-let. Average rental incomes reach a robust 8.5% per year. It shows the market is good for making money.
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Cyprus, Property investment: Exploring the Best Locations and Opportunities
Are you thinking about investing in Cyprus? You have many choices in cities like Nicosia, Larnaca, Limassol, and Paphos. Each town has its unique benefits, perfect for different needs and budgets.
Limassol: A Cosmopolitan Hub for Families and Investors
Limassol is now a top spot for those eyeing the property market. Prices for apartments jumped by 6.9% and houses by 2.1% in early 20224. The area offers a 3.9% rental yield, just a smidge over Cyprus’s average of 3.8%4. Around 30% to 40% of all property deals in the country happen here.
The price of homes in Limassol ranges between €5,500 and €6,500 per square meter, while office space will cost around €5,500 to €7,500.
Paphos: A Gateway to History and Coastal Living
Paphos mixes rich history with beautiful coasts, making it a hit for property purchases. In early 2022, apartment prices soared by 10.2% and houses by 4%4. You can expect a 4% rental yield here, matching Cyprus’ average. Paphos sees about 20% to 25% of all property transactions in Cyprus5.
Residential spaces in Paphos cost € 2,700 to €2,900 per square meter, while office spots cost €1,800 to €2,400.
Nicosia: The Capital’s Stable Rental Market
Nicosia, Cyprus’ capital, is a good bet for a steady rental income. In 2024, apartment prices rose 3.4%, but house prices fell by 0.2%4. It offers a 4% rental yield, better than the country’s average. For those chasing long-term rentals, it stands out.
Investors looking at Nicosia can find prices from €3,400 to €5,200 per square meter in the city centre, making it a pricier option.
Larnaca: Affordable Beachfront Properties
Larnaca is seeing some of the most significant price growth in 2023, from €1,800 to €2,500 per square meter5. This rise draws attention to its low-priced beachfront options, which are great for those wanting a second home or a rental.
Conclusion
Investing in Cyprus’ real estate is thrilling for wise foreign investors. It’s perfect for property buying, with beautiful Mediterranean views and a rich past. Cyprus is top for suitable investments. Around 2.4 million people flock to Cyprus yearly,6 boosting its economy. Its real estate market grows about 4.06% each year, making it prime for investment. You could make your investment 6% to 14%, adding to its appeal.
Dealing with Cyprus’s real estate laws might seem hard at first. But, with local pros guiding you, it becomes smooth and victorious. Europe’s best tax rules, including no inheritance and no property taxes since 2017, draw wealthy buyers. These include those looking for luxury living in villas, beach houses, and fancy flats. The economy shows strength, especially in tourism, shipping, and finance sectors.
If you’re considering getting a buy-to-let, holiday house, or retirement home, Cyprus has choices for all. Being part of the EU since 2003 makes it even more attractive. Plus, a €300,000 minimum spend gets you a European home. With a focus on eco-friendly growth and a booming rental market, Cyprus is where profit meets opportunity for intelligent investors.
Where do expats typically purchase properties in Cyprus?
Expats often choose from four main cities in South Cyprus. These are Nicosia, Larnaca, Limassol, and Paphos. The decision is usually based on each buyer’s lifestyle and budget.
Is buying property in Cyprus a good investment opportunity for foreign investors?
For foreign investors, buying in Cyprus offers excellent potential. The island’s beauty, culture, and tax benefits make it attractive. Still, the legal process can be tricky. Partnering with a local real estate lawyer for a smooth deal is wise.
