As with any overseas destination, buying property in Cyprus requires research, preparation and help from experts. This guide on buying property in Cyprus safely will help you understand the process and how to avoid common pitfalls.
The Cypriot economy was hit hard by the Covid pandemic, which had a knock-on effect on the property market. However, the Cyprus Property Market has rebounded following the relaxation of much of the Covid-19 restrictions.
According to Land Registry data, property sales to a foreigner during February 2022 were more than 110% above February 2021 and the highest February figure since 2008.
Yes, foreigners can buy property in Cyprus. There are no restrictions for EU citizens. However, the rules are slightly different for foreigners outside the EU, such as UK nationals. A non-EU national can buy one property in Cyprus and is permitted to own the freehold. It can be an apartment, house, or villa on land no larger than 4,014 sqm.
Foreigners will need to apply to the Council of Ministers for approval to purchase a property. Generally, most applications are approved, but the process can take a long time. Contracts can be signed, and it is possible to register the purchase with the Land Registry Office, but you won’t get the title deeds until you get Council of Ministers approval.
It is possible to protect your interests by adding a clause to your sales contract that protects your position in the event of a refusal.
Prices vary significantly between locations on the island. To give you an idea of prices, below are the costs per square metre for an apartment in the centre of popular locations.
Limassol – Host to Cyprus’s most exuberant pre-Lenten Carnival and once the heart of Cyprus’s winemaking industry, the second-largest city in Cyprus has many restaurants and a lively nightlife. An apartment in the city centre costs approximately €3,062 per square metre.
Nicosia – This thriving capital city, packed with busy shops, museums, and art galleries, is a perfect destination for those preferring the buzz of city life. A city centre apartment would cost you €2,300 per square metre.
Paphos – has an established expat community, beautiful harbour, fantastic beaches, and its own international airport. For an apartment in the city centre, expect to pay around €1,600 per square metre.
Larnaca – located on the west coast, benefits from rich cultural attractions and buzzing beach life, making the oldest city in Cyprus an attractive tourist destination. Plus, it is served by its own international airport. Apartment prices in the city centre are around €1,620 per square metre.
Famagusta – some of the best beaches in Cyprus this east coast town, close to Ayia Napa, is perfect for water sports lovers. Property prices in the city centre are around €810 per square metre.
Outlined below are the key steps to safely buying a property in Cyprus.
1. Define your requirements – you need to answer some key questions; why are you buying the property, e.g., holiday home, investment or retirement? How do you intend to use the property, e.g., hosting family and friends? What attributes are essential, e.g., property type, facility, location and cost?
2. Get, in principle, approval from a mortgage provider if you are not a cash buyer. It will allow you to get an idea of what budget is realistic.
3. Open an account with a currency specialist who will help you get an idea of how much budget you will have for your new property overseas. When you find your dream property, they help you secure your property by delivering safe, fast currency transfers for your deposit and will protect your property costs against currency market volatility.
4. Find a good Agent – regulated by law and licensed by the Estate Agents Registration Council. You should check the agent is licensed.
5. Hire an independent property lawyer who has no connection with the agent or developer, who will only work for you and protect your interests.
6. Although not a legal requirement, a surveyor is recommended if the property has had a lot of work done on it or needs work a lot of work to be done.
7. Begin the process of opening a Cypriot Bank Account
8. Viewing Trip – You will need to visit Cyprus to view the properties under consideration to see which ones best meet your expectation and make an offer through the agent.
9. Making an offer on a property through your agent
10. Your lawyer will make the necessary checks and get the deposit contracts signed. You’ll need to pay a deposit – your currency specialist will ensure you get a great exchange rate and can arrange a forward contract locking-in in the exchange rate for the balance payment
11. Send an application to the Council of Ministers for approval to purchase your property.
12. The signing of sale contracts and making the final balance payment. Your currency specialist will ensure the payment arrives in the right account on time.
13. Time to start connecting utilities and organising an international removals company to help move your belongings.
On top of the sale price of your property, there will be additional costs. As a rough guide, you need to budget for around 15% of the cost of the property for all the taxes and fees. These are comprised of the following:
Legal fees – your lawyer will cost approximately 1% of the sale price
Local Property Tax – paid to the municipalities and is based on the Land Register’s valuation of the property
Property Transfer Fees – If VAT was paid on the purchase price, no property transfer fees are due.
Stamp Duty – based on the value indicated in the sales contract. Current rates; nothing to pay on €0 to €5,000; €5,001 to €170,000 – 0.15% and greater than €170,000 – 0.2%.
Value Added Tax (VAT) – your lawyer will confirm the prevailing rates during the buying process
Agent fees – between 2% – 5% of the sale price. This cost is typically split between the buyer and the seller
Property insurance if you’ve taken out financing from a Cypriot bank
We hope you find this guide useful in your quest to buy a property in Cyprus. If you have a question or need help finding a good lawyer, agent surveyor, mortgage provider or currency specialist – Contact us?