Cyprus: A property haven

The country offers a competitive edge when it comes to port operations.

Published: Mon 28 Dec 2020, 10:28 AM

As a Mediterranean island, Cyprus boasts long stretches of gorgeous beaches, a tranquil lifestyle under the sun, and reasonably priced luxury villas. This makes it incredibly tempting for expats to buy real estate in Cyprus, with the majority of families choosing to either relocate or possess a second home in this piece of paradise.

Acquiring a property in Cyprus, either as an investment or as a second home, has always been a popular choice among foreign investors.

A combination of high quality of life, year-round sunshine and natural beauty, ease of doing business and investment incentives offer investors an attractive experience in terms of both living and doing business. Being a historically key pillar of the Cyprus economy, the real estate and construction sector have experienced remarkable growth in the past years, manifested in increased demand and activity levels, prestigious large-scale projects, incentives and an influx of foreign investment.

In recent years, there has been an increase in the interest of acquiring real estate property in Cyprus. Being an island located in the Eastern Mediterranean, a member of the European Union since 2004, having a tax system which favours investment in real estate and having formed double taxation treaties with several states, combined with the hot climate and natural beauties of the island, has led Cyprus to become an ideal hub for real estate investment.

European Union citizens are allowed to acquire residential and commercial real estate in Cyprus without any restrictions. Citizens of non-EU countries on the other hand, can acquire real estate in Cyprus, but permission from the Council of Ministers is required. Upon obtaining the permission and registering the property in the name of the foreign buyer, the owner of the property may sell or dispose of the property at his own discretion.

A EY report stated that Covid-19 has changed structurally the way we work and live almost overnight and is likely to have a longstanding impact on many sectors including real estate, a sector which had been on an upward trend in recent years. In Cyprus, there has been a series of support measures implemented by the government in an effort to prop-up the local economy and facilitate its recovery. As people return to their daily business routine, there is little doubt that there is still a long road ahead, paved with economic restructuring and business transformations in order to adapt to the new era. The real estate sector traditionally constitutes one of the main pillars of the Cypriot economy and its performance is inextricably linked to that of the broader economy. Given the disruption that Covid-19 pandemic has caused in the overall economy, it is expected that the real estate sector will play a key role in its eventual recovery.

The Cyprus real estate market has historically been divided into the major urban centres of Nicosia, Limassol and Larnaca (primarily driven by local demand); and the seaside resort areas of Paphos and Famagusta, which are mostly driven by foreign demand.

Places to consider getting a house in Cyprus

Limassol: Limassol is a cosmopolitan city, with an excellent choice of international schools to choose from. Here, you will find everything you need to lead a comfortable life, with many shops, restaurants, bars, and entertainment venues to pick from. Additionally, if you'd like to rent out your property to tenants, then Cyprus real estate for rent are currently in high demand in Limassol due to limited supply and increasing demand. Living in Limassol, is, however, more expensive than in other parts of Cyprus.

Paphos: With the advantage of having an airport nearby with excellent transportation links, it is generally considered cheaper to have real estate in Paphos. Some pick Paphos so they can save on living expenses and travel to Limassol for work every day. Paphos is considered more of a laid-back environment compared to Limassol, with most of the properties being sold as private houses, not flats.

Nicosia: Many Cypriots work in Nicosia since it's the capital city so a long-term rental opportunity is a good investment. However, Nicosia is located inland and doesn't have access to the sea directly, so it wouldn't be wise to buy property in Nicosia for a holiday home or short-letting opportunity.

Larnaca: Larnaca is close to the Larnaca airport, it's located right by the sea, and has very affordable property prices in comparison to Limassol or Paphos. While Larnaca is small, the city is considered to be an undervalued investment opportunity.

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