Buying A Property in Cyprus - The Complete Guide to Real Estate

Overview of the real estate market in Cyprus

Cyprus is an island paradise in the Mediterranean Sea, 200 miles to the west of Syria and 100 miles south of Turkey. It is a highly sought-after destination with stunning scenery, ancient ruins, and beautiful beaches. There is an abundance of villas, houses, and apartments for sale, and using our guide, you can find your dream home.

Over the course of the last 9000 years, Cyprus has seen influences from Middle Eastern and Western cultures. This has resulted in a broad tapestry of cultural development, making Cyprus a wonderful place in which to live. Property is available in all areas of the island, from the pine-covered Troodos Mountains in the island's interior to the bustling hive of activity that is the island's capital, Nicosia.

The island's beach resorts are varied. Ayia Napa is a party town favored by the young, but there are also many quiet towns and villages offering sensational sea views. This is the third largest island in the Mediterranean, making buying a property in Cyprus a really positive, life-changing opportunity.

newly built houses in cyprus

Best locations to buy property in Cyprus

Let's take a look at the main towns on the island.

Property in Paphos

Paphos, with its spectacular harbor, has a long-established ex-pat community. It has become a focal point for foreigners wishing to purchase property, encouraged by the convenient budget flights to and from the local international airport. The airport is a hub for EasyJet flights. In 2017 Paphos was named the European City of Culture, resulting in more than €25 million in investments.

The town has developed into two distinct halves; Old Paphos (Paleo Paphos) occupies a hill to the rear of the town. Kato Paphos is a vibrant tourist area around the harbor and beachfront. However, old Kato is ideal for those looking to enjoy a more traditional lifestyle.

Kato Paphos has become popular with property investors looking to buy holiday homes and rental properties. It's a hugely popular area within walking distance of everything a person could wish for, making for a fun holiday. 

One-bedroom apartments start from €80,000 - €100,000, two-bedroom houses from €120,000 - €140,000, and townhouses from about €150,000. There are also luxury properties available. 

Property in Limassol

On the island's Southern coast, between Paphos and Larnaca, lies the island's second-largest conurbation, Limassol. The city is a fascinating mix of modern architecture, with a more than a fleeting nod toward the island's turbulent, multicultural past.

The old town and fisherman's harbor offer winding streets and a glimpse into the past. However, the marina and Limassol Del Mar areas present state-of-the-art architecture highlighted by the €350 million luxury residential development. Limassol offers good employment opportunities in areas such as teaching, secretarial, administration, accountancy, and management. In addition, there are many offshore companies here in the shipping and insurance sectors. 

There is a very vibrant nightlife scene, with cafés, bars, and nightclubs staying open into the early hours. Limassol offers excellent apartment living, and while the luxury end will cost you around €3 million, a two-bedroom apartment in Pissouri can cost as little as €100,000. So there is a considerable range to look at when buying property in Cyprus.

Property in Nicosia

If city life is your thing, then the island's capital, Nicosia, located 50 kilometers inland, may be just the place for you. The Venetian - walled old town is complemented by a more contemporary lifestyle with modern Western shops like Debenhams and Mark and Spencer. 

Inside the walled center is a fascinating array of art galleries, museums, cafés, and history. In addition, the wonderful Laiki Geitonia district is a marvelous area full of winding streets offering artists' studios and little cafés. 

Smart apartments are around €1,000,000, and there is an excellent rental market for those looking to buy investment properties. 

Property in Larnaca

With its palm trees and salt lake, Larnaca offers a gentle, relaxed pace of life, with fewer expats and lower house prices than Paphos, Nicosia, and Limassol. Larnaca is traditionally more Cypriot than other areas. 

Larnaca is less popular than other towns but still has much to offer. It's a small compact town, very beautiful, with a mixture of traditional and contemporary influences. The city has a palm tree-lined beachfront, lovely architecture, and ancient monuments

You can purchase two-bedroom apartments for as little as €75,000, and small villas and bungalows start at €150,000.

Property in Famagusta - Ayia Napa

In the past, Ayia Napa picked up an unenviable reputation for its sizable young tourist crowd. Their excessive behavior was often hitting the headlines. Fortunately, the town has been dramatically cleaned up in recent years and now offers an excellent family-orientated environment. 

The luxury marina is a smart location offering 600 berths, a range of luxury apartments, and a high-end beach club. In Famagusta, an investment apartment will set you back €10,000 to €150,000, and a villa somewhere between €200,000 and €250,000.

map of cyprus with the largest cities

Types of title deeds

There are different types of title deeds in Cyprus. The islands were, of course, divided in 1974. Land or property owned by Turks or Turkish Cypriots before 1974 is sold under Turkish Title. That which was owned by foreigners before 1974 is sold under Foreign Title. Both of these are fully recognized internationally.

TRNC Title. This is the Kesin Tasarruf Belgesi or Absolute Possession document. It covers land and properties given to Turkish Cypriot refugees as compensation for land they lost following the war in 1974. An agreement states that if the two sides of the island ever reach an agreement based on the United Nations Annan Plan, all deals covered by TRNC Title may be subject to compensation claims from the previous Greek Cypriot owners. However, compensation will be minimal as it likely will be based on pre-1974 values. In addition, most of these developments were built on land that was previously grazing land and, therefore, worth very little.

TDM Title This is Turk Mali Degil or Non-Turkish Title. It relates to land previously owned by Greek Cypriots and given to Turkish settlers post-1975. Purchasing land under this agreement is seen as a higher risk.

How to buy property in Cyprus: The purchase process

Reservation Fee.

This will depend upon the value of the property in question and will typically range between €5,000 and €10,000. The Realty agent or a lawyer holds the money as a reservation until the contracts are signed. This removes the property from the market and fixes the price. When the sale proceeds, the fee is taken off the purchase price. 

Legal Services Appointment.

A lawyer will provide services that include: 

  • Due diligence 
  • Review and/or preparation of Contract of Sale
  • Contract negotiation exchange and completion
  • Registration of the Contract of Sale at the Land Registry Office 
  • Representation at the Land Registry Office for the title transfer
  • Application for the title transfer
  • Application to the Tax Authorities for reduced VAT
  • Application for permission to buy immovable property in Cyprus.  

Legal fees for all these services typically amount to between €2,000 and €5,000 or 1% of the purchase price.

Conveyancing and Due Diligence.

Due diligence should always be carried out prior to signing the contracts. Your lawyer will ensure that the vendor has the legal right to sell or if there is anything that could hinder the purchase. If you intend to build on the land, they will ensure the existence of the necessary permits and planning permission. 

Negotiation and signing of contracts.

The Contract of Sale is a private agreement between the vendor and purchaser. The vendor normally provides one for you to give to your lawyer for review. These are typically written in English. Stamp Duty is payable within 30 days of signing. It is applied at the following rates.

  • Up to €5,000 - Nil
  • €5,001 to €170,000 - 0.15%
  • Over €170,000 - 0.20%
  • The maximum payable is €20,000.

Reduced VAT Application

Under EU law, VAT is payable at 19%. However, a reduced rate of 5% applies under certain conditions.

Applicants must be aged 18 or above.

The property has to be used as a primary and permanent residence for a minimum of 10 years. 

No previous application for reduced VAT has been made previously by the applicant.

The 5% rate applies only to the first 200 square meters. After that, anything above 200 Square meters attracts the standard 19% rate.

Registration of Contract of Sale at the Land Registry Office

When the contracts have been executed and stamped, and the deposit (typically 30% - 40% of purchase price) has been paid, the Contract of Sale is lodged at the Land Registry Office. This is done for "specific performance" within 6 months of signing. This act protects the buyer by forbidding the vendor to resell or transfer the property to another person. As soon as this registration goes through, the purchaser is able to resell the property even before the issuance of the title deeds.

Permission to acquire immovable property

Cypriots and EU citizens do not face any restrictions when purchasing immovable property in Cyprus. However, Non-EU citizens require permission from the Council of Ministers. It really is just a formality and is typically completed within a month. Approval is not a precondition to taking possession. 

Transfer of title deeds

The issuance of title deeds for individual units in a development typically takes a few years after the completion of the development. After that, purchasers can simply issue a power of attorney to the lawyer who will complete the procedure. 

Fees are applied at the following rates.

  • Up to €85,000 - 3%, fee - €2,550, cumulative fee - €2,550.
  • €85,000 - €170,000 - 5%, fee €4,250, cumulative fee - €6,800
  • Above €170,000 - 8%
signing a contract

Can foreigners buy property in Cyprus?

The short answer is yes. Furthermore, for EU citizens, buying a property in Cyprus is more accessible than in most European countries. They face no restrictions. Non-EU citizens are only permitted to purchase approximately one acre of land or one house or apartment.

What should you consider before buying a property in Cyprus

Cyprus is no different from any other country regarding purchasing property. This is a major investment, and like any significant investment, it requires due diligence, care, and thought.

Compare Prices

Always make like-for-like comparisons. The locals, for example, generally do not buy from big developers. Shop around and see what is available.

Location, location, location

It's an old adage, but it is so important. Make sure that where you buy is going to be somewhere you will be happy living. Check it out during the day time but also at night. Sea views come at a premium, but you are never that far from the Mediterranean. Check for schools, shops, and other amenities. 

Lawyer

Do your homework and choose a lawyer that comes highly recommended. The internet makes checking credentials easy.

Check Investment Returns 

If you are buying a property for investment purposes, check the market. Don't take the vendor's word for it. Likewise, estate agents and developers depend on achieving sales and will often paint a rosy picture for the buyer. 

Buying Off-Plan

Always check the credentials of the builder. Insist on seeing past projects.

Used Properties

Check for obvious things like dampness or cracks in walls. 

Additional Expenses

Houses with common areas and condos come with monthly expenses. In Cyprus, these can range between €50 and €500 per month.

Rules for buying a property in Cyprus

As previously stated, for EU citizens, there are no restrictions. However, a quick conversation with a reputable lawyer will provide you with all the necessary information. 

Property tax and stamp duties

Immovable Property Tax

This tax was abolished in January 2017.

Municipality Tax

This is calculated on the last government valuation (currently 01/01/2018). Rates are typically between 0.1% and 0.2%.

Sewerage Tax

This is calculated on the last government valuation (currently 01/01/2018). Rates are typically between 0.05% and 0.3%.

Refuse Collection Fees

These depend on the size of the property. For example, a three-bed property in Famagusta currently attracts fees of €140 per annum.

Capital Gains Tax

This currently stands at 20% of the profit.

Inheritance Tax

This was abolished in 2001.

Stamp Duty

This is calculated on the value of the agreement.

  • Between €5,000 and €170,000 - 0.15%
  • Over €170,000 - 0.2%
  • Maximum is capped at €20,000 per stamp agreement.

Buying a house in North Cyprus

The property market in Northern Cyprus is a wonderful investment opportunity. This is the ideal location for those looking for a place to invest. There are many tourists worldwide due to Northern Cyprus' beautiful beaches, gorgeous climate, low crime rate, and high quality of life.

Buying a house in South Cyprus

The South is beautiful, with the towns of Paphos, Larnaca, Limassol, Ayia Napa, and the capital, Nicosia. Here you also have the Troodos Mountains. For a €300K investment, you can buy a sensational property. Residency permits allow you to legally live, work and study in Cyprus.

Benefits of buying property in Cyprus

The climate is sensational, with long warm sunny days. The Mediterranean is famous for its healthy and delicious cuisine. In addition, lifestyles are excellent, with virtually no crime. With a residency, you can live, work and study without hindrance in a beautiful island paradise. The healthcare system in Cyprus comes in two sectors. Both public and private hospitals are located in all of Cyprus's major cities. Public healthcare is funded by taxes and administered by the Ministry of Health; it is either free or low-cost for EU citizens.

Drawbacks of buying property in Cyprus

There are not really any unavoidable pitfalls. You'll be fine if you carry out due diligence and appoint a reputable lawyer. The usual pitfalls are avoidable. For example, not ensuring the property is subject to an ownership dispute, hidden costs, tricky contracts, etc., will all be taken care of by your lawyer. 

Final thoughts about buying a property in Cyprus

If you are looking for an investment property or to start a new life in a new country, Cyprus certainly ticks all the boxes. Climate, culture, lifestyle, cuisine, and scenery are unrivaled. You are never far away from the clear azure waters of the Mediterranean Sea.

Cypriot people are warm and friendly, and English is spoken by many. So it's a very easy place to settle. 

FAQ Section

Here we take a look at some of the frequently asked questions that people have when thinking of buying property in Cyprus.

Do I need a lawyer when buying a property in Cyprus?

Answer: No, you do not need a lawyer when buying a property in Cyprus. However, It is highly recommended that you seek the guidance of a specialized lawyer. The process is complicated, and there can be pitfalls. 

How much deposit do I need to buy a house in Cyprus?

Answer: EU residents will require a minimum deposit of 20% to 40% of the purchase price. Non-EU residents usually need a minimum deposit of 30% - 40% of the purchase price. In addition, banks charge arrangement fees. In most cases, this is 0.75% to 1.0% of the mortgage amount.

Should you buy property in Cyprus?

Answer: Anyone looking for a second home or to relocate to an island paradise should not think twice. It is easy to settle and even gain employment in Cyprus. As an investment opportunity, it is also good with vibrant holiday rentals.

Are property prices in Cyprus falling?

Answer: Yes, the property prices in Cyprus are falling slightly. This is due to a possible recessionary environment in 2023 and higher interest rates set by the European Central Bank (ECB). However, Cyprus has a considerable inflow of foreign capital and professional workers as well as tourists that will stabilize property prices more than in other regions. Now is seen as an excellent time to buy real estate in Cyprus.

Is now a good time to buy property in Cyprus?

Answer: Yes, all the smart money says that now is a great time to be buying a property in Cyprus. Coming out of the COVID-19 pandemic, the market is suddenly becoming vibrant again, and tourists are returning in huge numbers.

Is Cyprus property a good investment?

Answer: Yes, property in Cyprus is a good investment based on high margins within the development sector (20%+) and attractive rental yields (7-8%). Short-term rentals, such as Airbnb, offer an even higher yield potential. In the first quarter of 2022 the number of real estate transactions rose for the first time in 14 years. The second quarter brought continued growth. So, now is the time to invest.

Is it easy to buy a house in Cyprus?

Answer: Yes, especially for EU residents, it is easy to buy a house in Cyprus. Even for non-Eu, it is not difficult. With the aid of a trustworthy lawyer, things are relatively straightforward.

How long does it take to buy a house in Cyprus?

Answer: Most conveyancing is concluded within 30 to 45 days. In some cases, it may take up to 6 months, but no more.

Can I rent a property in Cyprus?

Answer: Yes, you can rent a property in Cyprus. The process of renting out or renting a property yourself is easy. In Cyprus, small houses fetch €30 to €50 per day. Comfortable houses cost around €80 per day, and villas can fetch much more.

Where is the cheapest place to buy in Cyprus?

Answer: The cheapest place to buy properties in Cyprus is currently Larnaca. This might change within the next couple of years due to large investments like the new Larnaca Marina and a new seafront residential area along Dhekelia road. Paphos brings the cheapest rentals with its inexpensive restaurants and shops. Nicosia as the student capital and home to the financial industry is relatively expensive while Limassol, often referred to as little Miami, is one of the most expensive real estate areas in all of Europe.

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