By Antonis Loizou
Over the years, Cyprus has become an appealing tourist and holiday resort in terms of the international market.
Foreign visitors are on the rise, comprising primarily of Europeans, with the British market dominating (accounting for approximately 40% of tourists), trailed nowadays by the Russian market at 20%, with other European markets in pursuit.
As the Mediterranean’s third largest island, it is particularly attractive for vacationing families, though there are hot-spots for younger and unattached tourists as well — limited to certain towns and localities.
And, being a former British colony, Cyprus has adopted many of the UK’s customs, as well as legal and other procedures.
The island thus offers numerous advantages, when compared to its real estate competitors, chief of which are as follows:
• The overwhelming majority of the population speaks English as well as Greek, though given the increasing numbers of arrivals from other countries, around 15% of the population also speak additional languages, such as German and Russian
• Motorists drive on the left (a concern for un-accustomed drivers)
• The legal system is akin to the UK’s
• The island is the EU’s second safest country and eighth most secure in the world. Serious crime is limited, even though it seems thefts might be on the rise
• As an EU member, public health, domestic worker assistance for the elderly and other EU benefits and obligations apply in Cyprus
• The island claims six of the Mediterranean’s top blue flag beaches and is likely to add to this number as part of ongoing infrastructure upgrades
• Two top-quality marinas are already operating in Limassol, with another under construction in Ayia Napa, expected to be completed in 2018. A fourth is planned for Paphos and a fifth for Protaras. Small fishing harbours are also placed all along the coast
• There are two international airports (Larnaca and Paphos) offering ease of access to all cities via a highway network. Travel time is 30-45 minutes from airport to urban centres
• In addition to an array of sports facilities, the island boasts five international golf courses, plus various sporting clubs of all kinds
• Cyprus enjoys 300 days of sunshine a year and, depending on weather conditions, snow over the Troodos range, with facilities for skiers
• There are several schools and universities where tuition takes place in a major European language in all towns
• For those seeking a business destination, Cyprus offers the lowest tax rate in the EU, and holds double taxation agreements with key commercial partners, including the UK, Russia and Egypt. Perks such as special tax incentives for foreign managers of offshore companies are an additional attraction.
• Distances are comparatively short, with travel between coast and mountains taking about an hour. The island also offers an attractive countryside that combines history with natural beauty.
• Citizens of non-EU states can secure a permanent residency visa by acquiring a home worth over €300,000. Non-EU residents can also acquire a Cypriot passport with an investment of €5 million and a €500,000 house purchase.
Such visas and passports also cover family members, whereas in the case of group investments (i.e. a number of buyers getting together or operating through a developer), the investment amount is reduced to €2.5 million per person. This scheme compares favourably with similar schemes in other European countries, and offers a one- to two-month response period from application date.
Meanwhile, after a six-year recession, local real estate is showing signs of a mild recovery so it is a suitable time to invest for personal use/buy-to-let/capital gains. It’s important to note that, under the prevailing incentives, the ownership transfer fee (stamp duty) is charged at 50% of the normal rate if transfer takes place in 2016.
Additionally, no capital gains tax is incurred for real estate acquired (if not necessarily transferred) within 2016, and sold at any time in the future. Prices are dependent on a property’s location, quality, proximity to the beach, size and plot extent.
As a frame of reference, the following are price guides for primarily new properties (prices for re-sales would be lower):
Villas with pool
– 100m2, two-bedroom villa with a pool: €150,000-€250,000
– 125m2, three-bedroom villa with a pool: €250,000-€400,000
Apartments with facilities
– 90m2, two-bedroom flat: €180,000
– 110m2, three-bedroom flat: €220,000
Offices
– Newer, high-tech at €3,000 a month (rental at €15 per m2.)
Older at €2,000 a month (rental at €10 per m2)
The above prices do not reflect those of properties in Nicosia, where prices are between 10%-15% lower than elsewhere.
Luxury/beach accommodation
Beach villas: €5,000-€10,000 per m2
Beach apartments – €3,000-€4,000 per m2
Less popular/non-beach tourist areas are estimated at 25%-35% less
Finally, the growing number of airlines connecting to Cyprus, together with the government’s new open skies policy are also boosting the island’s popularity.
Meanwhile, deflation has brought down the island’s cost of living index, to rank it 12th in the EU. So, for those on the hunt, it’s definitely worth paying a visit to a variety of local properties, to get a first-hand look at what the island’s real estate market can offer.
www.aloizou.com.cy
ala-HQ@aloizou.com.cy
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