The sparkling sea, long beachfront, scenic mountains and urban centres of Cyprus are full of construction activity. Houses, luxury penthouses, apartment blocks, bungalows – not to mention the plots available near the sea, in the city or countryside. Property development in Cyprus is thriving. But is investing in real estate in Cyprus a good idea? Read on to find out!
Key Takeaways
- Investing is an excellent way to generate income and provide for projects like education or pensions.
- Real estate investment prospects are looking good for Cyprus in 2023.
- Real estate investing can take many forms and has some characteristics you must consider before starting.
- Some restrictions exist for third-country nationals (TCNs) and real estate in Cyprus; however, real estate allows TCNs to get permanent residency.
- Cyprus has a tax system favourable to investing.
Why invest?
People invest for various reasons. These might include securing an income, increasing income, or funding a specific project such as children’s education or a pension. Property can yield income in two ways: it can be re-sold when it rises in value or rented out and create rental income.
Although investing is considered a good idea –making money work for you– the rule is not to rush or expect easy profits soon. This is especially so with real estate, which is a stable and rewarding but slow investment. The best way to go about it is to research and seek a professional advisor’s advice.
Looking good for 2023!
Real estate has always been a good investment option in Cyprus and continues to be so. Data shows that 2023 has benefited Cyprus’s real estate. The Real Estate Agents Registration Council of Cyprus reports sales of EUR 1.7 billion for the first trimester of 2023. The RICS Cyprus Property Index for Cyprus also reports a rise for the second quarter of 2023, especially in apartments. The latest data from the Central Bank of Cyprus Property Price Index (first trimester of 2023) show a rise in residential properties, especially apartments. Rental prices are high in all asset values because of high demand.
Let’s get started!
Because of the nature of the investment –immovable property– you might weigh some factors before you proceed:
- How much money do you have available? Investing in real estate requires capital.
- How will you go about maintaining your property? You can maintain the property yourself or hire professionals. Both options are expensive.
- Time. How quickly will you need access to your money? Investing in real property is not a short-term investment but a financial commitment. Buying the property may be time-consuming, while selling it later may take long.
- Type and purpose of investment. You may do what Forbes Advisor calls “invest in your own home,” that is, buy a home for yourself to upgrade and keep in excellent condition for capital growth; you may get a holiday home, property to resell, or to rent out.
Note that you need the services of two types of professionals: a lawyer registered with the Cyprus Bar Association and a real estate agent registered with the Real Estate Agents Registration Council of Cyprus.
Therefore, the expenses you can expect to pay include lawyer’s fees, estate agent’s fees, land registry transfer fees, VAT, and municipality taxes concerning the property.
Location, location, location!
Location is essential in real estate investments anywhere. The same holds for Cyprus. Limassol is the most expensive and popular area because of its natural beauty, cosmopolitanism and entrepreneurial environment. Nicosia is the capital with a steady level of property values. Larnaca and Paphos are on the rise, with Paphos having the advantage of a large ex-pat community.
Seaside is the most expensive but rewarding property because it never loses value and is always in demand. At the same time, there are excellent options in cities and the country.
Therefore, the best thing is to visit real estate or developers’ offices to look at their portfolios. Developers and realtors in Cyprus are highly professional and have deep roots in their communities. They speak English and are familiar with both local and foreign clients. Ask them to brief you on locations, prices and local markets.
Types of investing and third-country nationals (TCNs)
Cypriots and European Union (EU) citizens can invest in realty without restrictions.
However, a TCN can only buy property with permission from the Council of Ministers, a straightforward procedure that can be done by your lawyer. However, a TCN cannot buy property to rent out. This is one of the most common restrictions placed on the permission by the Council of Ministers.
Real property and permanent residency
Investing in real estate can give you permanent residency in Cyprus: “permanent residence by investment”. You must invest EUR 300,000 in real estate and have EUR 50,000 of secure annual income from abroad. Permanent residence covers your spouse and underage children. The required income is increased by EUR 15,000 for the spouse and EUR 10,000 for each underage child. On an annual basis, you must verify to the Civil Registry and Migration Department that you continue to have the real estate property as your residence.
Tax benefits
Cyprus has a tax system that generally encourages investment. Cyprus has no real property tax or income tax on interest and dividends.
The bottom line
The prospects for real estate investment in Cyprus are excellent for 2023. Property is a secure investment, though not so quick to liquidate as other assets. It is good to visit real estate and developers’ offices to talk with them and see their portfolios. There are restrictions on TCNs buying realty in Cyprus; however, it can lead to permanent residency by investment. Seaside or country, apartment or house, there are many ways to invest in the beautiful Mediterranean island of Cyprus!
Disclaimer
This blog post briefs you on the types and prospects of property investment in Cyprus for 2023. It cannot take the place of personalised advice from a professional. It is not meant as professional advice and carries no liability.
