Whether you’re seeking for a place to spend extended summer vacations or retire to Cyprus, the attractiveness of Cyprus’ Mediterranean climate and golden beaches makes it an appealing second home for Brits.
Buying property in Cyprus necessitates meticulous planning to ensure that everything goes properly and that any possible hazards are avoided. We’ve put together a comprehensive guide about buying property in Cyprus to assist you. It goes through everything you need to know about the real property market, mortgages, and fees, as well as the actual buying procedure.
We’ll even look at some of the most appealing locations on the island that you may call home, as well as the best ways to finance the costs of international property, such as using the porta-nails multi-currency account. We hope that this guide will be a good starting point for you if you’re thinking about buying a home in Cyprus.
What is the state of the property market in Cyprus?
The property market in Cyprus is divided into two distinct sections: the urban areas of Nicosia, Limassol, and Larnaca, and the coastal resort towns of Paphos and Famagusta, which are in high demand among expats seeking sun.
The market was doing significantly better than it had in a long time up to 2020, after three years of strong improvement. The country’s economy, on the other hand, has been severely impacted by the Covid-19 outbreak, which has had a negative impact on the property market.
In addition, according to Deloitte’s February 2021 – Cyprus Real Estate Market Report, total sales contracts in 2020 were 7,668 compared to 10,366 in 2019, a decrease of 27%.
This has had an impact on the island’s housing supply and demand. Prospective international purchasers, on the other hand, might take heart: according to the survey, apartment prices remain stable, appear to be unaffected by the pandemic, and are predicted to recover quickest.
While things are still unknown, experts polled for the Cyprus Real Estate Pulse study (December 2020) believe that availability to finance, market confidence, international travel, and investment will all play a role in the short-term performance and recovery of the Cyprus property market2.
Is it possible for foreigners to buy property in Cyprus?
In a nutshell, yes, foreigners can purchase property in Cyprus. Furthermore, compared to many European countries, it is easier to do so here.
EU residents can purchase property in Cyprus without any limitations. It is still feasible for UK citizens to do so, however the restrictions have altered slightly since the UK exited the EU.
Buying a property in Cyprus after Brexit
UK citizens are allowed to buy one property in Cyprus and keep the freehold. The property might be an apartment, house, villa on a building site, or a plot of land with a maximum size of 4,000 square meters.
The purchase of a second property (such as a vacation home) may be permitted in particular cases. UK nationals interested in purchasing property in Cyprus should be informed that after Brexit, they will only be able to stay in Cyprus for a total of 1000 days in any 180-day period. You’ll need to apply for a visa if you want to stay longer.
Importantly, the buying procedure has changed for post-Brexit customers. When you enter into a deal, you must first apply to the Council of Ministers for permission to purchase a property, and title deeds will not be transferred to you until permission is granted. While it’s only a formality and it’s highly unlikely that your application will be denied, you’ll need a clause in the contract that spells out what will happen if permission isn’t granted.
It’s not unusual for the application to take anywhere from a few months to a year to be completed. You will also be unable to rent or lease property, buy a share in a property, or purchase a property in joint names if you are not married.
What is the average price of various homes in Cyprus?
Lot locations vary greatly depending on where you are on the island. Prime locations, such as Nicosia, the country’s capital, and Limassol, a trendy wine-making region, are more expensive than others. It also matters how close you live to the city center, as it does in many towns.
The best places in Cyprus to buy a property
There are appealing houses to be found in a variety of locations across the island, so where you decide to buy will be determined by the type of lifestyle you choose.
Do you want city culture with a view of the sea, for example? Maybe Larnaca is the right place for you. Or do you simply wish to be close to the nicest beaches in Cyprus? It’s be that Famagusta is more to your liking.
Here’s a rundown of some of the more popular British expat locations so you can get a sense of life on the island:
- Paphos is a major tourist destination with a thriving expat community. It has a lot to offer, including a beautiful harbor, a historically significant old town, and beaches. It has a local international airport that makes regular travel easy.
- Famagusta – Located on Cyprus’ east coast, it boasts some of the island’s best beaches, ideal for sunbathing, swimming, and watersports. Ayia Napa is also in this area. It is now a renovated, family-oriented resort that was once known for its clubs.
- Limassol is Cyprus’ second largest city and the seat of the Limassol district, which is located on the island’s southern coast. The Limassol region is known for being the epicenter of Cyprus’ winemaking industry.
- Larnaca, Cyprus’s oldest city, is located on the island’s west coast. It blends culture and beach life, and because it makes the best of both worlds, it is a popular tourist destination. It also has a big international airport, so getting there is simple.
- Nicosia – Cyprus’ capital city, located 50 kilometers from the shore, is a flourishing metropolis with a historic center, magnificent Venetian walls, bustling shops, museums, and art galleries. Nicosia may be the best option for individuals who enjoy city life.
A step-by-step instruction on how to buy property in Cyprus as a foreigner
The procedures for purchasing property are comparable to those in the United Kingdom, with a few exceptions. The important steps are listed below:
- Plan your mortgage – If you’re not buying cash, look into mortgages and loans first to see how much money banks are ready to lend you before you start.
- Appoint a local lawyer – make sure they’re not affiliated with the developer/vendor or estate agent involved in the transaction to ensure your interests are protected.
- Begin your search for a property.
- It’s critical to visit a property in person once you’ve located it to ensure that the condition fits your expectations.
- Make an offer – Once you’ve discovered a property you want, contact the estate agent to make an offer.
- Request permission to purchase the property from the Council of Ministers in writing.
- Sign the sale contract, which will be signed by both the buyer and the seller.
- Funds should be transferred.
- Complete the sale – once approvals have been granted and finances have been validated, the property will be registered in your name.
When buying a property in Cyprus, how can you avoid potential pitfalls?
During the property buying process, there are some things to keep an eye out for and steps to take to help you avoid problems.
- Developers frequently take out a mortgage on land or property for which you would be liable if they went bankrupt after you signed a contract to purchase it. Before you buy the land, get an impartial lawyer to confirm that no mortgages have been placed on it, so you don’t run into any problems later. Request a Land Search Certificate from the Land Registry through your lawyer.
- You should be aware that buying property in Northern Cyprus carries some risk. Due to claims of ownership coming from persons displaced in 1974, property ownership in the north is frequently challenged. Purchasing such a property could lead to legal action. If you want to buy in the north of the island, it’s a good idea to rent first and familiarize yourself with the market. A qualified lawyer can also assist you in obtaining a property with the appropriate form of irrefutable deeds.
In Cyprus, how can I secure a bank loan or a mortgage?
If you need a mortgage to help you buy a property in Cyprus, the good news is that you can acquire a loan from a Cypriot bank. However, it is connected with a certain level of risk (especially property in north Cyprus), therefore you’ll need a good, international mortgage broker that can locate you the finest mortgage for your needs.
When you’re ready to apply, be prepared to demonstrate that you’re a low-risk borrower. Prepare to show your passport as identification. If you’re self-employed, you’ll also need to show proof of income in the form of recent paystubs, personal bank statements, or audited accounts. You’ll also need documentation of any other investments, such as stocks, bonds, and pension funds. After that, the lender will need to get a property appraisal report.
Your mortgage application may be granted if the lender determines that your finances and the property in question are in order. You’ll notify your lender of the completion date for the cash to be issued once you’ve been accepted.
What taxes and fees will I be required to pay?
Keep the following additional fees12 in mind when planning your purchase:
- Fees for transfers range from 3 to 9 percent.
- Stamp duty is calculated based on the price of the property and ranges from 0.15 percent to 0.25 percent.
- 19 percent VAT
- Legal fees range from 0.10 to 1.1%.
The vendor usually handles the estate agency fees, so you shouldn’t have to pay them.