How to Buy Real Estate in Cyprus

In recent years, foreigners are increasingly thinking about whether to buy real estate in Cyprus. And many are buying it — this proves the increase in the number of sales transactions in recent years. Despite this, the island of Cyprus is not an ordinary piece of land. 

Cyprus is divided into the northern part — the Turkish Republic of Northern Cyprus (or TRNC) — and the southern, Greek part of the island — the Republic of Cyprus. Earlier, we wrote about how to buy real estate in Northern Cyprus; now we will focus on the southern part of the island. 

Since the purchase of real estate is a serious step, you need to learn about possible pitfalls and understand whether the advantages, which are often written on tourist sites, will be those pluses for you personally.

Pros and Cons of Living in Cyprus 

Depending on your preferences, the pros of living in Cyprus can become cons, and vice versa:

• Nice weather: over 300 days of sunshine a year. But if you burn easily without sunscreen or have high blood pressure, you may find the heat a hardship.
• Taxes are low enough when buying real estate (which is also the reason why people buy it here). However, since this area is in demand by foreign investors, taxes for foreigners have increased. Why not replenish the budget while the demand increases?
• Buying real estate can facilitate the procedure for obtaining citizenship in the future. 
• A residence permit is given not only to you but also to your family members. But since Cyprus is home to two states, it cannot be said that the locals have no worries about possible clashes, like in 1974.
• Real estate in the Turkish part of the island is cheaper than in the south, with almost the same comfortable climate. But in the world community, the territory of the TRNC remains illegal.

If you haven't changed your mind yet, then you really should find out how to buy real estate in Cyprus. And maybe you should consider getting citizenship in Cyprus.

Cyprus Market Perspectives

Types of real estate do not differ much from what we are used to seeing in other countries. These are apartments, houses, villas, residential complexes, and land plots — that is, residential real estate. Offices and stores — the most common representatives of commercial real estate. 

Objects from the developer — the so-called primary real estate, which is purchased after cosmetic repairs. Secondary housing is the one where someone has already lived before you or carried out the purchase transaction.

Depending on your budget, you should start choosing where exactly you want to buy real estate in Cyprus. Even if you have lots of money, you should choose quickly: prices are constantly rising (for the buyer, this is undoubtedly a disadvantage), and the island is not too big (here you can’t build new objects non-stop), so the villa of your dreams can be bought by somebody else.

In addition, the purchase of real estate will help to obtain a residence permit in Cyprus, and it will be easier to cross the border. 

How Much Does Cypriot Real Estate Cost

Cypriot taxation obliges all to pay for the real estate documentation process. Therefore, add at least 10% for fees and taxes (including VAT, i.e., value-added tax) to the purchase price.

There have been many economic and political changes in recent years, but South Cyprus is trying to hold its ground. For example, the citizenship by investment program was suspended in 2020 because of COVID-19. There were fewer sale and purchase transactions, but South Cyprus remained a popular destination. 

In the following years, the number of sales and purchase transactions started to increase. Again, there was an opportunity to obtain citizenship for real estate investments. You can find out more information on the official portal of the Department of Lands and Land Management. 

Prices for buying and renting housing in different cities of South Cyprus

Source: numbeo.com. 

How to Buy Property in Cyprus as a Foreigner

It all depends on what country you are a citizen of. Since the Republic of Cyprus a member of the European Union (hereinafter — EU), EU citizens have advantages over third-country nationals concerning legislation.  

Note: If you are interested in the territory of the TRNC, remember that the rules for buying real estate in Northern Cyprus will be different from the above. You can start with the “Law on the Acquisition of Real Estate and Long Term Leases (by Foreigners) (as amended)” (Taşınmaz mal edinme ve uzun vadeli kiralama (yabancılar) (değişiklik) yasası, 52-2008). 

What Types of Real Estate are Foreigners Allowed to Buy

Third-country nationals may buy not more than two properties (a plot of land and an apartment, or an apartment and a detached house, or a commercial property) with an area of not more than 4014 square meters after obtaining authorization from the Council of Ministers.

Remember that the purchase of real estate in Cyprus allows you to obtain a residence permit.

For EU citizens, there are no restrictions listed above.

Property Taxes and Fees

As previously mentioned, purchasing real estate in Cyprus provides the opportunity to eventually obtain citizenship. This is a lengthy process, but it is considerably easier than obtaining citizenship in other European countries, even when accounting for the various taxes that must be paid in addition to the property’s cost.

The primary tax is VAT, which is paid on new properties, and, occasionally, on secondary properties if VAT was never previously paid on them. Other Cyprus property taxes include stamp duty and title transfer fees, which are less substantial than VAT (19% of the property’s value) but still significant.

Fortunately, tax residents of Cyprus can qualify for substantial benefits. However, there are downsides, the most notable being the requirement to pay tax on all income, including that earned outside of Cyprus.

Mortgage and Installment Plans

If you are planning to buy property in Cyprus but lack sufficient funds, there are several options to consider. One of them is a mortgage, which allows you to purchase a home with a loan. Banks offer interest rates in Cyprus ranging from 1.5% to 3%. Yes, this means you will pay extra in interest, but considering the rise in property values on the island in recent years, there is a chance that you could recover all the costs upon resale.

It’s important to note that banks require a down payment, which is typically around 30%, though the amount may vary. You can learn more about mortgages in Cyprus, as well as all the details of obtaining a loan for property purchases on the island, in our new article about mortgages in Cyprus.

Another option is an installment plan from the developer. The advantage of this method is the absence of interest, allowing you to maintain the original contract price. However, developers may be less stable than banks, so your choice depends on your priorities and willingness to face potential risks. In both cases, whether opting for a mortgage or an installment plan, an initial down payment will be required.

House Insurance in Cyprus

To protect yourself and your future property, especially if you are buying a property remotely, insure the sale and the property itself. You can find out the terms of insurance at any insurance company in South Cyprus. 

Often, the bank involved in the transaction is using the services of a particular insurance company. It may be worth relying on his experience of cooperation.

Property Maintenance Costs in Cyprus

The length of your stay in Cyprus will determine the cost of maintaining your property.

If you are going to live in the house you have bought, you will have to pay for utilities such as electricity, water, and sewerage. There will be expenses for food and other necessities. But you won't need to hire a caretaker to look after the property in your absence.

You can also save money if you decide to use solar panels, as the island of Cyprus is famous for its excellent weather.

You will have to pay annual council tax regardless of where you live. Also, think about the cost of fixing any breakdowns. It turns out real estate doesn't come cheap, does it? Perhaps you should take out insurance?

Cyprus Citizenship by Real Estate Investment

If you are buying real estate for more than €300,000, it is possible to obtain a permanent residence permit. 

This can be a house/apartment investment or a purchase of another form of real estate such as offices, stores, hotels, or similar facilities, or a combination thereof, for a total value of €300,000. It must be proved that the money came from abroad, from the applicant's own bank account and/or his wife's bank account if she is included as a dependent in his application. 

Another possibility to obtain a permanent residence permit is to make an investment of €300,000 in the share capital of a newly registered company in the Republic of Cyprus; or, if you increase by the same amount the authorized capital of a company that physically exists in Cyprus, conducts its business there, and has a minimum of five employees. 

It is also allowed to invest €300,000 in units of a Cyprus Collective Investment Organization, but this amount must be kept in the Republic of Cyprus.

If for any reason you return the money you invested, you will lose the Immigration Permit issued to you under “Regulation 6 of the Aliens and Immigration Regulation.” The only way to keep your permit is to immediately invest in something else for the same amount or a larger amount.

Step-by-step Guide on How to Buy Property in Cyprus

The procedure for buying real estate in Cyprus is similar to the same process in other countries. Let's take a closer look at them 

Select Real Estate Investment

You can find a priority property in Cyprus in two ways: offline, that is, personally coming to the island, and online (virtually). 

Some real estate agencies periodically hold meetings with potential buyers. It is rather comfortable, as you can see photos of several properties in one place, immediately ask questions, and visit your favorite accommodation with a real estate agent. You do not need to open a visa to Cyprus if you plan to leave before 90 days. 

The online way is done through the Internet and printed publications. 

If you want to speed up the process, you can hire a local realtor. Having a real estate agency license will confirm the legality of the activity, so check it. In any case, it is wise to inspect the property in person before signing a contract.

Property Reservation

Once the buyer has chosen a property, it needs to be reserved. This means that it is time to pay 1-2% of the cost of the future purchase, thus confirming the seriousness of the buyer's intentions. If the buyer changes their mind later, the deposit will not be returned. It looks like a kind of penalty, but rather reasonable. If the deal falls through because of the seller, then the payment will be fully returned.

To make a deposit, you will need to open an account at a bank in Cyprus, such as Alpha Bank, Astra Bank, Bank of Cyprus, Eurobank, or Hellenic Bank. 

Unfortunately, citizens of Belarus and Russia may not be able to open an account, but nothing prevents you from transferring money from your bank account.

Conveyancing and Due Diligence

The developer is a guarantor of the purity of the transaction between buying and selling primary real estate. That is, he confirms that all documents are correct and the property is not encumbered by a mortgage or lease.

The cleanliness of the transaction involving secondary real estate is verified by a lawyer, who should be hired after checking his license. By contacting the relevant departments, the lawyer will find out if the property is ready for sale.

Sign Contract & Submit Documents to Local Authorities

The contract must contain a description of the property, its exact address, the amount of the sale, the full names of the sides of the transaction, a description of the rights transferred with the property, and other important information.

Documents, including purchase and sale agreements, can be drawn up in English or Greek. This is indicated on the website of the Department of Civil Registry and Migration.

Usually, a lawyer handles filings with local authorities.

Transferring the Title Deed

A title deed is a document containing information about a real estate object and its owners. The owner can perform any legal transaction with its help.

After signing the purchase contract, the buyer's lawyer provides the Council of Ministers with a written application and a copy of the passport. Then the lawyer pays the stamp duty.

Within 60 days of signing the sale agreement, the lawyer registers the agreement at the District Land Registry Office. Once the buyer is 100% settled with the seller, formal Cabinet approval to purchase the property must be obtained.

Best Places to Buy Property in Cyprus

It will not be superfluous to talk about the top 5 cities in Cyprus for real estate investment. 

Limassol is a major financial center. This is the second-largest city, with a population of about 245 thousand. In addition, it is attractive, with numerous foreign schools and a rich cultural life. For example, they hold a Wine Festival in City Park at the end of August and a ten-day carnival before Lent. Therefore, foreigners rush to obtain citizenship in Cyprus for investment, buying real estate here.

Nicosia is the capital of the Republic of Cyprus. It is located in the central part of the island of Cyprus. There is always a demand for real estate in the capital: locals try to settle nearby to make it easier to find work. After all, in small towns inside the country, there is enough work only during the tourist season. The disadvantage of Nicosia is that there is no access to the sea, and a part of the city belongs to the TRNC, which also does not add peace of mind.

Larnaca is located 34 kilometers away from Nicosia. It is the third-largest city in Southern Cyprus, with its main airport.

Paphos has been added to the UNESCO World Cultural and Natural Heritage List. According to Greek mythology, the goddess Aphrodite emerged from the foam of the sea a few kilometers away from the city. 

Tourists often visit Lower Paphos — the southern part of the city, where most of the attractions and souvenir stores are located. The administrative part of the city is situated in Upper Paphos. 

In Paphos, real estate is cheaper than in Larnaca. And there is also an airport, so Paphos is a nice place for investments.

The population of Ayia Napa is less than three thousand, but it is one of the largest resorts in the Republic of Cyprus. 14 beaches out of 27 existing ones received the Blue Flag. The mayor of the city solved the problem of noisy tourists: problematic establishments were closed, the infrastructure was updated, and a new marina and an underwater museum were built.