A Guide to Buying Property in Cyprus

There are expats from all over the world who would like to buy a house in Cyprus and get citizenship. In this article, we'll focus on purchasing property on this island. In the end, we'll briefly touch upon the topic of obtaining residency and citizenship.

Step-by-Step Guide to Buying Property

Let's imagine that you have found your dream property, opened an account in a local bank and decided on the mortgage offer if you need it. Now, stick to this scheme:

  1. Deposit up to 10% of the property's cost to reserve it for around one month.

  2. Sign a contract with a local lawyer to provide legal assistance.

  3. Wait until the lawyer will check the documentation, prepare a purchase contract and handle other formalities.

  4. Come to the island to sign the purchase contract, pay the stamp duty and 50% of the property's cost and deposit the agreement with the Land Committee.

  5. Submit an application to the Council of Ministers to purchase the property.

  6. Submit an application for a VAT exemption and wait for two weeks to get it.

  7. Pay the remaining half of the property's cost.

  8. Get the Certificate of Ownership.

  9. Pay the transfer fee.

  10. Become the rightful owner of the property and celebrate!

It's not necessary to be physically present on the island all the time. While the lawyer will be working on your papers, you can travel back home.

Market Perspectives

From the viewpoint of an expat investor, the real estate market on the island is divided into two categories. The first is urban centers with developed infrastructure, perfect for permanent relocation. The second is coastal areas, ideal for renting out to holiday-makers.

Before 2020, both segments were thriving. They have been showcasing significant growth for three consecutive years. In 2018, real estate accounted for over 38% of the annual growth rate of the state and 16% of the local Gross Value Added.

In 2023, the sector is recovering after the pandemic. Now, it's an excellent time to select from an extensive range of properties with title deeds. The cost of apartments, houses and commercial buildings remains more affordable, compared to the level that it could have reached if not for COVID-19. Nearly one-half of the total transactions activity accounts for expats who are looking for lucrative investment opportunities.

Let's have a look at the types of properties that most attract foreigners.

Villa

In the UK, people usually call this type of property "a detached house". In addition to up to 4 bedrooms, it features private parking, a garden, a barbeque area and a private or communal pool. Many villas offer gorgeous views. The target audience of this type of property is families with kids or couples who like to invite friends to stay with them. The primary shortcoming of villas is high maintenance costs, especially if the pool is private.

Apartment

Apartments are especially popular among retirees and couples who don't have kids. There are so many options to choose from, of any size and budget! Top variants feature space for alfresco entertaining or a balcony with picturesque views.

Duplex

This type of property has become a hot trend in Limassol. More and more tall buildings pop up in this city, adding a bit of a New York vibe to it. Duplexes nicely complement the overall upbeat atmosphere.

Properties on a complex

Staying or living on the territory of a resort complex, you'll get access to all its amenities: sports, bars, swimming pools and so on. Be ready to pay extra for that. You'll be able to choose from a wide range of villas and apartments.

Rural stone properties

Stone houses with thick walls are typical of rural areas. They're located in tranquil villages, forests and mountains. It's a dream haven for those who'd like to escape the urban hustle and bustle. In summer, stones will protect you from excessive heat. Many of such properties require renovation — it's your chance to get one with minimum investment and convert it into an idyllic escape.

In the nearest future, the prices will be likely to reach the pre-COVID level and keep growing. The sooner you invest, the better bargain you should be able to secure.

Regions to Turn Your Eye to

When you think of a thriving expat community in Cyprus, Paphos will probably be the first location that comes to your mind. It consists of two parts: Old Paphos and Kato Paphos. The former is the tranquil historical part, located on a hill. The latter is a popular touristic hub with a lively beachfront and a harbor. In Kato Paphos, you'll have all the necessary amenities at your arm's reach.

In 2017, Paphos was named a European City of Culture. The authorities invested over €25 million to improve its roads, public spaces, infrastructure and historical monuments.

Kato Paphos is the preferred destination of those investors who'd like to rent out their properties. It will be very easy for you to find a company that will manage and clean your apartment. Up to 3.5 million tourists come to the island each year. Numerous businesses were set up to cater to them and property owners — and many of them operate in Paphos. You should be able to get a cozy one-bedroom apartment for €100,000 or even less. A townhouse would cost you €150,000 or higher. Luxury accommodation is available too.

Larnaca is a more traditional location. It's more popular among locals than tourists or expats. For €75,000, you can get a two-bedroom apartment. A compact villa can cost around €150,000. You'll be able to enjoy seaside views, historical monuments and a lot of modern shops and cafes.

Nearly 40% of all real estate market activities take place in Limassol. It's the second largest urban area on the island, located between Larnaca and Paphos. The marina part is posh and modern. Close to it, you'll discover the beautifully preserved historic core. Opt for Limassol if you enjoy the nightlife. Bars and clubs remain open until the early hours. Moreover, there are casinos here. The selection of apartments is impressive. €100,000 should be enough to get a modest two-bedroom one. The most premium options cost over €3 million.

Nicosia is the runner-up in the rating of the areas with the largest and the most active real estate sector. Each year, the number of sales rises by approximately 10%. You might be able to buy a two-bedroom apartment for €150,000. Nicosia attracts expats with its big-city vibes. If you appreciate culture and history, you'll enjoy walking around its old town.

Ayia Napa – Famagusta used to be a firm favorite of young tourists who came here with a limited budget. Now, it looks and feels much more upscale than two decades ago. Families with kids love it. The prices for villas start at €200,000, for apartments at €100,000. The local Marina is one of the most premium locations on the island. It offers posh seaside properties for well-off investors.

Situated twelve minutes away from Limassol, Paraklissa is a lovely village that European retirees adore. It's rather large and offers diverse entertainment activities for elderly people. To buy an apartment or a small villa here, it's advisable to have at least €200,000 in your pocket.

If you love skiing, consider purchasing accommodation in Troödos Mountains. You can get a small house for around €130,000. In winter, there should be enough snow. In summer, you'll be breathing the cool, pine-scented air. You'll be able to explore quiet mountain villages and take a not-so-long drive to Limassol.

If you love mountain biking and hiking, consider Drouseia. It's located in the hills, where the cooling breeze will protect you from the summer heat. Most other villages, towns and cities are situated at a lower altitude. The primary cultural value of Drouseia is the Agios Georgios Nikochilitis Monastery. The prices for detached houses start at €220,000 here. This territory is one of the best places for agrotourism in Cyprus. Keep it in mind if you'd like to launch a holiday business.

Peyia is one of the warmest areas of the island, located in its southernmost part. Farmers even grow bananas here. The average price for a detached home is €250,000. You'll be living in a picturesque village blessed with many shops and cafes.

This list of excellent locations is far from being exhaustive. Feel free to explore the island's map to find more options!

North Cyprus

Historically, Greece and Turkey have been disputing the right to own and govern the island. The Southern part is populated by Greeks and is more EU-oriented. The Northern part is inhabited by Turks: it's less popular among expats who would like to invest in properties and is not as economically developed as its Southern counterpart.

It's strongly recommended to pick real estate in North Cyprus with the help of an experienced advisor. They will ensure you won't invest in property that might become the subject of a legal dispute.

Expats are allowed to invest in old local houses and apartments under the following conditions:

  • Get no more than one property per individual

  • Its size shouldn't exceed 1,338 sq.m.

  • It's necessary to obtain permission from the Council of Ministry (which should be quick and easy)

The above-listed restrictions are relevant only for properties sold under the Foreign Title. It applies to buildings that belonged to foreigners before 1974.

In 1974, the island was divided into two parts. If you opt for a building that previously belonged to Turks, you'll get it under the Turkish Title and you won't need to obey the above-listed restrictions.

Both titles are internationally recognized.

The property transfer fee in this part of the island is 6%. Each individual has the right to reduce it to 3% once in a lifetime. VAT is 5%. Below in this article, we'll provide a table with the taxes and fees from South Cyprus and you'll notice the difference in numbers.

Some expats manage to purchase multiple properties in North Cyprus. Trust solutions make this possible. If you're interested in this opportunity, please discuss it with a professional consultant.

Mortgage for Expats

Expats who haven't yet become residents of this island state can expect to get a mortgage on the following conditions:

Down payment

From 40% to 50%

Yearly rate

From 6% to 7.5%

How old the borrower needs to be

From 18 to 65

How many years they will have to pay out the mortgage

From 5 to 25

Early repayment

Rarely available and usually with a floating interest

Maximum amount of the loan

€500,000 in theory — yet in practice, foreigners rarely get such a large amount

Services of a licensed appraiser

From €250 to €600

Property insurance

Up to €2,000 per annum

Life and health insurance

Up to €1,200 per annum

Terms for UK Residents After Brexit

UK residents have the right to buy properties on the island under the following conditions:

  • One individual is allowed to get only one property

  • It can be a house, apartment, plot of land or building site

  • Its size shouldn't exceed 4,014 sq. m.

The Council of Ministers should issue permission for you to finalize the purchase. In most cases, buyers get it without a hitch. Some lucky UK citizens even manage to get permission for getting a second property but that would be an exception.

Compared to EU residents, people from the UK might struggle to find lucrative mortgage options. Besides, they will be allowed to stay on the island no more than 3 months out of each 6 months. If they want to live here longer, it's mandatory to get a visa.

Pitfalls and Advice on Avoiding Them

In general, the local real estate market is safe and the construction quality is very decent. However, it's essential to ask yourself these questions:

  • Can the real estate agency that you rely on boast an impeccable reputation? How long has it been around?

  • Is the developer reputable enough? Have you seen the previous properties that it delivered? Did you like them?

  • How will the property that you invest in be maintained?

  • Are your lawyer and other advisors independent? Or are they related to the developer?

Double-check whether the developer took a mortgage on the property or land that you're planning to buy. If yes, you might lose your purchase if the developer goes bankrupt. Bankruptcies don't take place too often — but you should be aware of this hazard.

The risks of buying properties in North Cyprus were described in the corresponding passage of this article.

A major pitfall is related to renting out properties. Only residents are allowed to rent their houses or apartments to tourists for a short term. Non-residents can sign rental contracts only with local residents and only for the long term. When the Council of Ministers will give you permission for buying real estate, this condition will be mentioned there.

The notion of a short-term rental might seem a bit absurd to foreigners because the shortest allowed duration is 30 days. Contracts that are signed for 29 or fewer days can be used exclusively for non-commercial purposes. Maybe, the situation will change soon. Legal experts have been long insisting on the necessity to update the old law. To stay aware of the progress, follow the news of the Cyprus Tourism Organisation.

Nearly 20% of Cypriots rent accommodation instead of buying it. After becoming a local resident, you'll be able to make money by renting out your property to other residents.

Please hire an experienced consultant before signing any lease contracts. There are too many details in local laws that foreigners don't know about. For instance, open-ended leases are illegal. Two witnesses are required for signing a tenancy of longer than one year.

Taxation

Be ready for the following expenses when buying a property in South Cyprus:

Sales agent's fees

From 2% to 5% of the sales price, usually split evenly between the buyer and seller

Transfer fees

From 3% to 8% (the more expensive the property, the higher the percentage)

Stamp duty

From 0.15% to 0.2% of the property's price but no more than €20,000

VAT

19%

Legal fee

Up to 1%

Property tax

No

Inheritance tax

No

Municipality taxes

€500

Capital gains tax (after you decide to sell your property)

20% of the property's price

Don't forget to factor in the services of lawyers, consultants and other assistants.

Paperwork

The set of documents that you should be ready to prepare typically includes:

  • Cadastral survey plan

  • Copy of title deed of the property that you purchase

  • Copy of the land registry plan

  • Copy of the building permit

  • Stamped copy of the buying agreement

  • Plan of the property

  • Document that specifies the area of the property

  • Proof of your paying capacity

  • Copy of your and your spouse's passports

  • Copy of the certificate of marriage

  • Application form

The papers are accepted in Greek or English.

If you're buying property in Cyprus in your company's name, be ready to provide the basic information about it, such as the address where it's registered, the names of its directors and shareholders and a copy of the memorandum and articles of association.

How to Obtain Cyprus Residency by Buying Property

To be able to apply for residency, make sure the property you invest in costs €300,000 or more and has never had any other owner except for the company that built it.

It doesn't matter whether it's commercial or residential. Feel free to purchase one property that costs €300,000 or several smaller ones that cost €300,000 in total.

It's ok if you buy real estate not in your name but in the name of the business that you run. It's important that the company should be registered in your name or your spouse's name and doesn't have any other shareholders except you two.

You'll be granted a residence permit within two months after the purchase. It will include not only you but your family members:

  • Spouse

  • Parents if they depend on you financially

  • Kids aged younger than 25

If you lack a spouse and kids at the moment of getting the permit, you'll be able to pass the residency to them later.

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