The Cyprus Property Market

In the next few years, properties on the Cyprus property market are predicted to increase in value and number, as will demand. The reduction of restrictions on foreign property buyers has opened the market to a wealth of new buyers.

Identifying a Property

As with any property purchase, you need to determine how much you are able to realistically afford and what type of property you want to buy: will it be your main residence, a holiday home, or business investment. Find a good local agent and let him or her help you locate a suitable property. Many areas are booming, not least of which is property in Paphos. Cypriot estate agents are required by law to be licensed and to have insurance. The agent is also required to advise you as to the bad points, as well as the benefits, of any property you are considering buying. It is particularly important that you or your legal representatives check with regard to any planned development nearby. With so many parts of the island booming, new developments are springing up everywhere. Whilst in the longer term, these may well add value to your purchase as, for example, a marginal area becomes more urbanised, this can prove to be an issue for a shorter term business investment. If you plan to sell whilst new dvelopments are still under way around the property, the daily presence of construction activity may do your resell value no favours at all. Financing Cypriot Property

Depending upon your personal circumstances, you may need to arrange appropriate finance. You may be able to re-mortgage your main home or get a mortgage from a Cypriot bank. You will need a deposit of 20% of the purchase price; although up to 30% is not unusual. At the time of writing, banks are also charging arrangement fees of between 0.75% and 1.0% of loan value. The mortgage repayment term is usually 10-20 years. VAT

No VAT will be required on land purchases until 2008. There is currently 15% VAT on houses and flats. This means land prices are likely to increase in price and value during the next year or two. Other Considerations

There is a cancellation fee if you sell a property before receiving the title deed.
Register your buying contract within 60 days or you are not covered by law and a seller could potentially mortgage your property.
Fees

There are a number of fees are required. The Reservation fee - CYP 1,000 to 2,000 is paid to the estate agent or developer. Once this is paid, you have 28 days to perform searches, surveys, and find a lawyer. Your lawyer will check the title to be sure it is unencumbered. Legal fees are around 0.75% of the price of the property is for legal fees. It is generally advisable not to use the developer's lawyers, even if they are offered free of charge. Stamp Duty is CYP 1.5 per thousand pounds up to CYP 100,000 and 0.2% over CYP 100,000. Agency fees are paid by the seller. Transfer tax is currently 3% on the first CYP 50,000; 5% on the next CYP 50,000; and 8% CYP on the remainder, payable when the title deed is issued. Conclusion

The Cyprus property market is thriving and property values are predicted to rise over the next few years. As with any property investment, there are of course no guarantees that values will increase over time. That said, Cyprus has a long history of solid property value appreciation. But this is only one reason to buy: this is one of the most beautiful islands in the Mediterreanean inhabited by some of the friendliest people you are ever likely to meet.