5 Key Advantages of Real Estate Investment in Cyprus
Cyprus is located less than an hour away and offers everything one could ask for in a family vacation – excellent beaches, mountains and picturesque villages, historical fortresses and museums, amusement parks and water parks, as well as opportunities for shopping, impressive nature trails, cruises, kayaking, and exposure to a unique culture.
Cyprus is an island in the Mediterranean Sea, south of Turkey, the third-largest island in the Mediterranean, after Sicily and Sardinia, both under Italian control. According to the official map, Cyprus is located in Asia, but in its culture and history, it is part of Europe, and the Republic of Cyprus is a member of the European Union.
Close to 2.4 million tourists visit Cyprus every year, and while most see it as an exciting tourist destination, some recognize the business opportunities during a short vacation and easily identify the potential offered by real estate investments in Cyprus.
Investors interested in real estate investment in Cyprus will find that these investments have several prominent advantages:
1) Steady Growing Real Estate Market
While the Cypriot economy has shown stability over many years, relying primarily on tourism, the real estate sector in the country has demonstrated consistent growth over the years, both in the volume of real estate transactions and in property values, presenting a steady average growth of 4.06% per year.
2)Property Prices
Despite the continuous global economic challenges, real estate prices in the country remain relatively low compared to the properties sold.
In Cyprus, it is possible to find holiday apartments in tourist areas and residential apartments in sought-after cities at attractive and convenient prices for the local population.
3)Return on Investment Potential
The potential return on investment in Cyprus real estate is a derivative of relatively low property costs, economic analysts’ predictions of a sharp increase in property prices in the next 5-8 years, and the economic stability of Cyprus. The potential return is also a result of optimal connection between expected returns, property sale after the expected holding period, rental yields, and high rental prices in a country with high demand for tourist and accommodation properties. The return on investment in Cyprus real estate averages between 6% and 14%.
4) Tax Advantages
Cypriot authorities attach importance to attracting foreign capital, implementing a tax policy that is accommodating to foreign real estate investors. Taxes related to real estate investments in Cyprus include:
Property Transfer Tax: This tax is rated based on the property value and ranges from 3% to 8%. It is essential to note that the first two tax brackets apply to transactions with a maximum value of €170,860, which is the typical investment range for most investors, with a maximum tax burden of 5%.
Note: Property Transfer Tax does not apply to the purchase of new properties.
Rental Income Tax:
5) Cyprus Residency
Available to investors over the age of 25 without a criminal record who purchase property in Cyprus with a minimum value of €300,000. Residency is also relevant for spouses and their minor children, and there is no requirement to actually live on the island.
Real estate investments in the neighboring island allow investors to be involved in the property search process, physically visit the property, get a sense of the property and the area without relying on catalogs and advertisements, and enjoy a convenient bureaucratic process, providing a sense of security and control.
It’s important to note that while Cyprus is a small autonomous island, since 2003, it is also a member of the European Union, enjoying global economic support as an integral part of a leading economic entity. This provides foreign investors with additional confidence in choosing it as a popular destination for real estate investments.
In conclusion, real estate investment in Cyprus is a tempting opportunity for people who want to secure their economic future. With strong market demand and a variety of diverse properties available for sale, such as houses and apartments, investors have many options to choose from. One of the main advantages of investing in Cypriot is its viable tax system. The country offers attractive tax incentives to real estate investors, including low estate and non-capital income on the sale of properties held for more than five years. Furthermore, Cypern boasts a high quality of life that makes it an attractive destination for residents and tourists as well. The Mediterranean climate, its beautiful landscapes and its cultural heritage contribute to a high level of living.
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