Should you buy property in Cyprus?

Should-you-buy-property-in-Cyprus

For more than ten years, Cyprus remains an attractive location in terms of investment in real estate sector. The country is also known for its high-quality education, excellent healthcare, mild climate and highly developed financial market. This small island state is a member of the European Union, part of the Eurozone, WTO, World Bank and has one of the most liberal tax systems. Thanks to its location, Cyprus has become one of the most important financial centers in the world, one of the places where deals are closed between East and West. Cyprus offers a wide variety of opportunities to invest in various sectors of the economy. In addition, the island is admired for its rich traditions and the extraordinary beauty of nature.

Obtaining Cypriot citizenship under the investment program allows third-country nationals or non-Cypriot high-income individuals, as well as their families, to obtain Cypriot citizenship provided that they invest at least 2 million euros in real estate. Citizens of Cyprus also become EU citizens. This means that they have the right to enter other EU countries, reside in all EU member states, study and work in the EU. Permanent residence in Cyprus is not a requirement within this program. A Cyprus passport allows to travel to 170+ countries without visas. It should be pointed out that Cyprus passport does not automatically make the investor a tax resident of a country, but allows him to take advantage of the available benefits. For example, when registering the status of a non-domicile tax resident, the investor can get exemption from tax on dividends and interest on income received worldwide for 17 years. Investor`s spouse, minor and financially dependent children under 28 years old, and the parents (these will have to additionally buy property from €500 thousand) may also be included in this arrangement. Cyprus does not disclose information on issued passports and does not prohibit dual citizenship.

According to the European Commission, after an increase of 4.1% in 2018, in 2019 the rate of real GDP growth in Cyprus slowed down. At the end of 2019, the Cyprus economy will grow by 2.9%, and in 2020 and 2021 – by 2.6% and 2.3%, respectively.

Despite the recent slowdown in economic growth, the Cyprus property market will remain an attractive area for foreign capital. This is facilitated, in particular, by the specific nature of any island property. When construction sites are limited, demand exceeds supply. This affects the stability of prices in a crisis, their solid growth in normal times. It is believed that Cypriot real estate attracts conservative investors who rely on the reliability of investments, rather than the level of profitability. At the moment, the average profit when investing in residential real estate of the island is 5-8% per annum, and in commercial – 5-7%. Those who buy property for subsequent lease can expect an average of 3-5% per annum. Of course, the greatest interest among property buyers who want to receive income from it is related to residential sector. The tourism is one of the most important parts of Cyprus economy with many visitors from all over the world coming here every year. This provides a constant demand for housing. The most sought-after homes such as villas, bungalows and townhouses are located in Paphos. In Limassol, a certain alliance was achieved between commercial properties and residential real estate, which is represented by high-quality apartments.

One of the reasons for the popularity of Cyprus among foreigners is the trustworthiness of local immigration policy. Owners of any property on the island are allowed to get visa easily. It`s enough to spend in Cyprus no more than 180 days a year (up to 90 in six months). If you need to spend more time in the country, you may apply for a residence permit – temporary or permanent. The conditions for obtaining the permit are among the most uncomplicated in Europe.

Please contact us to receive more details on real estate and the Golden Visa or Citizenship of Cyprus.

 

By Zainudin Makhachev

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