Are you dreaming of owning a property in a Mediterranean paradise? Look no further than Cyprus, where you can find affordable residential real estate with an average price of €1,680 per 1 m². From the popular regions of Paphos and Limassol to the capital city of Nicosia and the coastal town of Larnaca, Cyprus offers a wide range of options for property buyers. What is more is that in North Cyprus also known as Turkish Cyprus the prices are even more affordable!
Not only does Cyprus boast a diverse selection of residential and commercial properties but it also ranks among the top 20 safest countries in the world. In this comprehensive guide, we’ll walk you through the benefits of buying property in Cyprus, the eligibility and requirements for obtaining permanent residency, and the various investment options available to you.
Benefits of Buying Property in Cyprus
Investing in Cyprus real estate offers a plethora of benefits, making it an attractive option for those seeking a Mediterranean lifestyle and financial opportunities. By purchasing property worth €300,000 or more, investors can obtain permanent residence in Cyprus, granting them low tax rates, residency for their entire family, a high standard of living, and the ability to own a business. The Cyprus Permanent Residence Program also provides unlimited residency, prospects of citizenship, quality healthcare and education, and a fast processing time of just 3 months.
Cyprus boasts a wide selection of real estate options, from luxury houses and spacious apartments to commercial properties. Popular locations for property investment include Paphos, Limassol, Kyrenia, İskele and Famagusta region, with prices varying according to location with North Cyprus being more affordable. Limassol, in particular, has real estate prices almost twice the national average. Despite this, Cyprus still offers relatively affordable residential real estate compared to other Mediterranean destinations, with an average price of €1,680 per square meter.
Investing in Cyprus real estate not only provides a desirable lifestyle but also offers financial benefits. Property owners can rent out their properties, earning passive income. The profitability of real estate in Cyprus is among the highest and most stable in Europe, with prices increasing by 1-4% annually. The potential return on investment averages between 6% and 14%. Additionally, Cyprus offers tax benefits, such as low corporate and personal income tax rates, and double tax treaties with many countries. The country’s robust economy, with a GDP growth of 8.4% in 2021, and its membership in the European Union further instill confidence in foreign investors.
Requirements for Cyprus Residency
To obtain permanent residency in Cyprus through property investment, non-EU citizens must meet the following criteria:
- Invest a minimum of €300,000 in real estate, shares of Cypriot companies, or units of investment funds registered and operating in Cyprus. The property can be residential or commercial.
- Prove a stable and secure annual income from abroad of at least €50,000, plus €15,000 for a spouse and €10,000 for each financially dependent child. If investing in options other than residential property, the income can come from sources within Cyprus, as long as it is taxed in the Republic.
- Provide a clean criminal record certificate from the country of origin and country of residence.
- Submit a health insurance policy certificate for medical care covering inpatient and outpatient care.
- Confirm that they do not intend to undertake any form of employment in Cyprus, with the exception of their employment as Directors in a Company in which they have invested.
The Cyprus Permanent Residence Program offers several benefits:
- Fast processing time of 2-3 months with a high approval rate if all criteria are satisfied.
- Residency for the main applicant’s spouse and children under 25 years.
- No requirement to reside in Cyprus, but a visit once every two years is necessary.
- Eligibility to apply for Cypriot citizenship after five years of residence.
To maintain permanent residency, investors must:
- Maintain their investment and provide proof annually.
- Verify criteria every three years for a clean criminal record and annually for health insurance if not registered with the general health system GESY.
- Visit Cyprus once within the first year to register biometrics, and visit Cyprus every two years thereafter.
However, these conditions are different if you are considering buying property in North Cyprus:
- Ownership of property valued at €125,000 or more within North Cyprus.
- A continuous period of temporary residency permits for over sixty years, spanning three years, or for those under sixty, a period of six years.
- Limited absence from the country to no more than 40 days annually.
- Valid and uninterrupted health insurance coverage.
Investment Options
Cyprus offers a range of investment options for those seeking permanent residency, including residential properties, commercial real estate, shares of Cypriot companies, and shares of Cypriot investment funds. Investing in residential properties is one of the quickest and most straightforward paths to obtaining permanent residence in Cyprus. The average price of real estate in Cyprus is €1,680 per square meter, with popular regions for property buyers including Paphos, Limassol, Nicosia, and Larnaca.
Under the Cyprus Permanent Residence Program, which allows non-European countries to obtain residence permits through investment in the republic, there are four options available:
- Purchase residential or commercial real estate with a minimum value of €300,000 plus 5% VAT.
- Invest in the share capital of a Cypriot company.
- Invest in units of a Cypriot Collective Investment Organization (CIO).
- Combine the above options to reach the minimum investment amount.
While all four options are available, most investors prefer to purchase property. Commercial real estate investments can be made in both primary and secondary markets. It’s important to note that under the investment program terms, real estate can be rented out but not sold as long as the investor intends to remain a resident of Cyprus.
Cyprus boasts a favorable tax regime, with income taxes being zero in certain circumstances and company taxes at 12.5% of profits. The entrepreneur and business community is rapidly growing, with weekly networking meetups and co-working spaces available. Setting up a company in Cyprus is a straightforward process, with personal income tax divided into different brackets. Foreigners can buy both residential and commercial properties in Cyprus, with a cap of around 4,014 square meters for land ownership to prevent mass acquisition by non-residents.
The Process of Buying Property in Cyprus
The process of buying real estate in Cyprus involves several steps, including choosing a property, obtaining government permission (for non-EU citizens), opening a bank account in Cyprus, entering a preliminary agreement, making a down payment, concluding the purchase and sale agreement, and obtaining the title deed. While EU citizens can buy property in Cyprus with no restrictions, UK nationals must apply to the Council of Ministers for permission after Brexit. Third-country nationals also need permission from the Council of Ministers to buy property in Cyprus.
To purchase property in Cyprus, follow these steps:
- Gather funds or apply for a mortgage through a Cyprus bank, with some banks financing up to 80% of the house’s value.
- Find a local lawyer and notary in Cyprus to assist with the purchase and sale transaction, which can cost up to 1% of the real estate value.
- Search for a property with a Cyprus real estate agent and contact the owner/seller.
- Apply to the Council of Ministers for permission using Form Comm. 145, if relevant (for non-EU citizens).
- Sign the contract and pay the price.
- Register the property in your name at the Lands Registry.
It’s important to note that while the process involves extra steps compared to local buyers, residency in Cyprus is not a prerequisite for buying property. The contract of sale can be lodged at the Land Registry Office for ‘specific performance’, preventing the vendor from reselling or transferring the property elsewhere. The transfer of title deeds is a straightforward process, provided the buyer has paid all outstanding balances, applicable transfer fees and taxes, and has the necessary permit from the Council of Ministers, if applicable.
Permanent Residency vs. Citizenship
Permanent residence in Cyprus is a lifelong status that does not require renewal, and it covers the spouse and dependent children of the main applicant. The choice between temporary and permanent residence depends on individual goals, such as relocating alone or with family, creating a ‘safe haven’, or protecting assets. Permanent residence by investment is granted for life.
It’s important to understand the differences between visas, residence permits, permanent residence, and citizenship:
- Visas allow entry into a foreign country for a limited period.
- Residence permits allow a person to live in a country for up to five years, depending on the conditions, and must be periodically renewed.
- Permanent residence allows a person to live in a country indefinitely without the need for renewal.
- Citizenship is the highest status, allowing a person to live in a country indefinitely, with additional benefits such as voting rights and the ability to hold public office.
Cyprus Citizenship by Investment is available after five years of residing in Cyprus for holders of a permanent residency permit. Permanent residents in Cyprus may become eligible for citizenship after five years of living in the country. Cyprus citizenship allows for visa-free travel to over 170 countries, including the European Union and the United Kingdom.
Living in Cyprus: What to Expect
Living in Cyprus offers a unique blend of Mediterranean lifestyle, rich history, and modern amenities. The island boasts a subtropical climate with hot summers and mild winters, providing around 300-340 sunny days per year. The average air temperature ranges from +13…15°C in winter to +30…36°C in summer.
Cyprus is known for its architectural diversity, stunning sea views, bays, beaches, and amazing natural landscapes. The island is home to three national parks: Cavo Greco, Akamas, and the Troodos Mountains. Popular natural attractions include the bath of Aphrodite, Cape Greco, and Nissi Beach. The country also has a rich heritage, with ancient cities, temples, baths, theaters, palaces, medieval architecture, churches, cathedrals, defensive castles, monasteries, and Turkish minarets
Some key aspects of living in Cyprus include:
- Language: While Cypriot Greek is the main language, English is widely spoken, making communication easy for foreigners.
- Cost of living: The cost of living in Cyprus is generally 10% lower than the EU average [12]. However, property maintenance costs include:
- Annual municipal tax (€55 to €185)
- Utilities (€114 per month per person living in an apartment of 45 m²)
- Electricity tariffs (€0,33 per 1 kW)
- Water supply tariffs (€0,9 for under 40 m³ per month, €1,43 for 41 to 80 m³, €2,45 for 81 to 120 m³, and €5 for 121 m³ and more)
- Internet and digital TV (€14,99 to €39,99 per month depending on the Internet speed)
- Healthcare: Cyprus offers high-quality healthcare, ranked 24th globally by the WHO.
- Education: The Cyprus Permanent Residence Program allows dependents to be enrolled in high-quality private schools offering English language courses.
- Safety: Cyprus is considered safe, ranking 64th out of 168 globally and 23rd in the EU on the Global Peace Index.
- Expat community: Cyprus has extensive expat communities, with 22.7% of citizens being foreign-born. The country is becoming increasingly popular among digital nomads and online entrepreneurs
- Taxation: Cyprus offers a favorable tax environment for permanent residents and businesses:
- No tax on global income, including dividends and capital gains
- No inheritance tax
- Low income and property tax rates.
- 12.5% corporate tax rate for international businesses or new companies
- %0 tax rate in Famagusta
Living in Cyprus offers a unique blend of Mediterranean lifestyle, rich history, and modern amenities. The island boasts a subtropical climate with hot summers and mild winters, providing around 300-340 sunny days per year. The average air temperature ranges from +13…15°C in winter to +30…36°C in summer.
Cyprus is known for its architectural diversity, stunning sea views, bays, beaches, and amazing natural landscapes. The island is home to three national parks: Cavo Greco, Akamas, and the Troodos Mountains. Popular natural attractions include the bath of Aphrodite, Cape Greco, and Nissi Beach. The country also has a rich heritage, with ancient cities, temples, baths, theaters, palaces, medieval architecture, churches, cathedrals, defensive castles, monasteries, and Turkish minarets.
Conclusion
Cyprus offers an enticing opportunity for those seeking to invest in property and gain permanent residency in a Mediterranean paradise. With its diverse range of residential and commercial properties, favorable tax environment, and high quality of life, the island has become an increasingly popular destination for foreign investors and expats alike. By investing a minimum of €300,000 in real estate and meeting the eligibility requirements, non-EU citizens can obtain permanent residency for themselves and their families, enjoying benefits such as low tax rates, a high standard of living, and the prospect of future citizenship.
As you embark on your journey to find the perfect property in Cyprus, consider exploring the wide selection of real estate options available through Estate Providentia’s Cyprus Real Estate Page. With its stunning natural beauty, rich history, and modern amenities, Cyprus offers a unique blend of lifestyle and financial opportunities that are sure to appeal to those seeking a Mediterranean haven to call home.
FAQs
Q: Is purchasing property in Cyprus a pathway to residency?
A: Yes, buying property in Cyprus can lead to residency. The country offers some of the most affordable residential real estate in Europe, with an average price of €1,680 per square meter. The most sought-after areas for property buyers include Kyrenia, İskele, Paphos, Limassol, Nicosia, and Larnaca. By investing a minimum of €300,000 an down to €125,000 in North Cyprus in property, owners are eligible for permanent residence in Cyprus.
Q: What are the steps to obtaining permanent residency in Cyprus?
A: Foreign nationals can acquire permanent residency in Cyprus either by investing in real estate or securities, through immigration authorization, or after residing in the country for 5 years with a residence permit. The quickest method is through investment, where a minimum investment of €300,000 in real estate or securities grants permanent residence, which is even more affordable in North Cyprus.
Q: Are American citizens permitted to purchase property in Cyprus?
A: Yes, U.S. citizens, along with other non-EU nationals, are allowed to buy immovable property in Cyprus. However, they must obtain permission from the Council of Ministers, which is typically a procedural formality. The application is submitted with the signed contract of sale, and approval is usually given within a month.
Q: Is investing in property in Cyprus a wise decision?
A: Investing in property in Cyprus is considered a sound choice due to the country’s robust economy and developing infrastructure. Cyprus has a history of peaceful relations, offering a secure and stable investment environment. The country provides a solid foundation for investment in real estate.
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