Real estate investment in Cyprus

(Sources: Cyprus data at worldbank.org, Cyprus Investors Guide: A step-by-step guide to your investment and the Cyprus Tax Guide for Investment by the Cyprus Investment Promotion Agency).

As of April 2024, the median price for an apartment in Cyprus is €550,000, with the median price per square meter being around €4,371. On the other hand, the median price for a house or villa is €670,000, with the median price per square meter being around €3,209.

It is important to note that the median price is the middle value in a sorted list, which is less affected by extremely high and low values than the average price. Therefore, it is a more reliable indicator of the typical market value.

The total accepted amount of Pancyprian property sales (transfers) for 2023 was 4.399 billion, up 216 million from 2022 and 1.208 billion from 2021 (Department of Lands and Surveys).

Record high real estate sales transactions for the second quarter of 2023 (highest in 15 years) and a steady rise from 2022 till December 2023 (Department of Lands and Surveys and Central Bank of Cyprus).

Limassol leads in sales and real property value (Real Estate Agents Registration Council of Cyprus).

According to the RICS Residential Property Price Index for the fourth quarter of 2023, the rental value is increasing, with holiday apartments being the leading contributor.

The surest bet for rental Cyprus property investment is Limassol, with a rental yield of 7%. The second best is Nicosia, with 5%, followed by Larnaca and Paphos, with 4% for both.

Overall, the rental yield in Cyprus is 5.48% for apartments, 2,99% for houses, and 5,84% for retail (RICS Residential Property Price Index 2023Q4).

With its robust economy and status as a European Union member, Cyprus presents a stable and attractive opportunity for investors. With rental yields averaging between 4-6% annually, the real estate market in Cyprus is up-and-coming, offering the potential for a steady passive income and a significant return on investment in the long term. In 2024, purchasing property in Cyprus is widely regarded as a sound investment that can yield numerous benefits for the owner.

Under this permit, applicants can bring their spouses and underage children to Cyprus. For the spouse, the applicant’s annual income is increased by € 15,000 and € 10,000 for each underage child. There are no language or professional qualification requirements for applicants, only that they have a clear criminal record.

Investors can apply for Cypriot citizenship after residing in the country for five years with permanent residency status.

Each year, the applicant must show that they continue to maintain the investment and hold a health insurance certificate (if they have not registered with the General Health System GeSy). The applicant and adult members of their family must show that they still have a clean criminal record every three years.

The application process is fast-tracked and takes an estimated period of two months.

EU nationals may buy real estate in Cyprus (land, apartment/flat, house, other) without restrictions.

British, United States and other third-country nationals (TCNs) will need permission from the Council of Ministers. This is a straightforward process carried out by filling out a form. The Council of Ministers will not deny permission to good faith applicants.

However, there are real estate purchase limits for British, US and other TCNs. A TCN can get a house, a professional roof, or land not exceeding 4014 sq m and no more.

To buy real property in Cyprus, you will need the services of a lawyer and a real estate agent.

This is possible by finding local professionals and using a proxy document. The proxy appoints a person (for example, a lawyer or real estate agent) to act as your agent and representative during the sale and transfer of land/ real estate or during the rental agreement discussion and negotiations.

The proxy can be specific, that is, for a specific purpose or general, for general purposes.

The person appointed as your proxy is in a “fiduciary position”. This means that they must act in an honest, loyal and responsible manner towards you.

A foreign proxy document must be stamped and certified at the Cyprus Embassy or Consulate to be valid in Cyprus. The rule is the same whether your country is an EU member state or not.

Another reason individuals may find investing in Cyprus attractive is the ease of setting up a business.

Forming a company is straightforward, while the Registrar of Companies runs a highly efficient system.

Companies where foreigners hold the majority of shares can use the Cyprus BFU (Business Facilitation Unit). The BFU has simplified the application and registration procedures. Note, however, that as of April 2024, a company needs to prove an investment of € 200,000 in Cyprus to qualify for the BFU. This is usually done by depositing the amount in a Cyprus bank.

Companies registered in EU member states can do a cross-border conversion or register a European company (SE).

All processes are carried out at the Registrar of Companies in Cyprus. A branch of a foreign company and a company registered through the BFU must also be registered with the Civil Registry and Migration Department (CRMD). Concerning companies that go through the BFU, a notification is sent to the CRMD automatically.

Registering any of the above types of companies will need the professional services of a local lawyer.

Cyprus' favourable tax regime is an important investment incentive.

Cyprus has only a 12,5% corporation tax rate, among the lowest in Europe. Also, a competitive tonnage tax for shipping companies and an approved EU open registry.

Property tax in Cyprus used to be paid by the property owners to the Inland Revenue until the end of 2016. However, since 2017, this tax has been abolished. Individuals and families who own property or assets in Cyprus are exempt from paying taxes on those assets.

If you own property in Cyprus or inherit property from someone in Cyprus, you will not be subject to any taxes on transferring that property.

People who are tax residents of the Republic are taxed on their worldwide income, whether from within or outside the Republic. Persons who are not tax residents are taxed on their Cyprus-source income.

To be a tax resident of Cyprus, a person must spend more than 183 days in the Republic or at least 60 days in the Republic and not be a tax resident anywhere else.

There is no income tax for the first € 19,500 per year. Then, the rate varies according to income, beginning with 20%.

A person is tax domiciled in Cyprus if they have been tax residents of Cyprus for 17 years out of 20. The 20 years do not include the year for which this person starts to pay tax.

Disclaimer

This Guide and FAQs are intended to give an accurate picture of investing in Cyprus real estate. Every effort has been made to keep the information precise and up to date. However, we cannot guarantee their precision and accuracy. The Guide and FAQs are meant to help readers understand Cyprus's investing background and practices. However, they are not intended as personalised investment advice or to encourage investing in any specific project or sector. For personalised advice, you should consult a financial specialist or real estate agent.