Buying real estate in South Cyprus for a foreigner

Author of the article:

Anastasia

Northern Cyprus
Real Estate Specialist

Date:  05.11.2024

Updated: 05.11.2024

Reading time: 13 min.

Views:  292

If you are thinking about buying a property in South Cyprus, you are on the right track! This sunny island attracts foreign buyers not only with its mild climate, but also with its investment opportunities. In this article I will tell you how foreigners can buy a home in South Cyprus, what steps you need to go through and what legal and financial aspects you will have to face.

Let's dive into the world of Cyprus real estate and find out what it takes to make a successful purchase!

Why is South Cyprus attractive to foreign buyers?

When we talk about buying real estate in South Cyprus, the first thing that comes to mind is the incredible climate. Imagine: you wake up under the warm sun, and around you - picturesque beaches with golden sand and cozy streets decorated with traditional architecture. But this is far from the only reason why this island has become a real magnet for foreign buyers. Let's take a closer look at what makes South Cyprus so attractive.

Advantages of the region

South Cyprus offers a high standard of living. From modern stores and gourmet restaurants to sports clubs and educational institutions, the infrastructure is well developed. Whether you are looking for a permanent residence or just want to spend a vacation, you won't be bored here. According to 2023 data, the standard of living in Cyprus corresponds to the standards of Western European countries.

A stable economy and low taxes also make this region attractive for investment. For example, property tax in Cyprus is only 0.1% of the value of the property, which is one of the lowest in Europe. This greatly simplifies financial calculations and allows investors to get a greater return on their investment.

Overview of popular resort and residential areas

There are several locations in South Cyprus that are particularly popular with buyers. Paphos, known for its historical sites and beautiful beaches, attracts both tourists and those looking for a permanent home. The average cost of an apartment in Paphos ranges around $150,000, while villas can cost between $300,000 and $600,000, depending on location and condition.

Limassol is a real center of life on the island, where cultural life is boiling, various events and festivals are held. Here real estate can cost from $200,000 for an apartment to $1 million for luxury villas by the sea. This city is ideal for those who want to be in the center of events.

Larnaca with its cozy promenades and peaceful atmosphere is ideal for those who want to enjoy a measured life. House prices here range from $120,000 for an apartment to $400,000 for a house. This makes Larnaca attractive to those looking for more affordable options.

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Rising property prices

It should not be forgotten that the real estate market in South Cyprus is growing strongly. House prices have increased significantly over the past few years and this trend looks set to continue. According to experts, in 2023 real estate prices will increase by 8-10% compared to the previous year. This makes the current moment particularly favorable for investment.

The demand for rentals is also increasing, which opens up opportunities for generating income from rental properties. In Paphos, for example, renting an apartment can bring from 800 to 1,200 dollars per month, which makes investing in real estate even more attractive.

Thus, South Cyprus offers not only great living conditions but also excellent investment opportunities. If you are thinking about buying a property, this island is definitely worth your consideration!

Procedure for foreigners buying real estate in South Cyprus: Step-by-step instructions

Buying a property in South Cyprus may seem like a complicated process, but if you follow the clear steps, you will be able to complete the task without much difficulty. Below is a step-by-step guide to help you become a property owner on this beautiful island.

Step 1: Determine your preferences and budget

• Choosing the type of real estate: Decide whether you want to buy an apartment, a house or a villa. Think about your needs and lifestyle.
• Determine the budget: Set limits on your budget, including additional expenses such as taxes and fees.

Step 2: Research the market

• Explore the regions: Explore the different areas of South Cyprus such as Paphos, Limassol and Larnaca. Each offers unique advantages.
• Compare prices: Check the average real estate prices in the neighborhoods you are interested in. This will help you get a better idea of what to expect.

Step 3: Find a suitable facility

• Contact a real estate agent: Find an experienced agent who knows the market well and can offer you options that match your requirements.
• Visit the facilities: Inspect the property you are interested in. Pay attention to the condition of the properties and the surrounding infrastructure.

Step 4: Conduct due diligence

• Collecting documents: Make sure the seller has all the necessary documents for the property. This includes a certificate of ownership, certificates of absence of debts and encumbrances.
• Working with a lawyer: Find a qualified lawyer who specializes in real estate. He or she will help you check the documents and make sure the transaction is legal.

Step 5: Signing the purchase agreement

• Contract drafting: Once you have selected a property, your lawyer will help you draw up a purchase agreement. Make sure the agreement spells out all the terms of the deal.
• Deposit form: A deposit (usually 10% of the price) is usually required upon signing the contract.

Step 6: Registration of ownership

• Registration with the Department of Land Resources: After the transaction is completed, your lawyer will help you register the title to the property. You will need all the documents you have collected.
• Payment of taxes: Don't forget about the real estate acquisition taxes that will need to be paid during the process.

Step 7: Finalizing the transaction

• Obtaining a certificate of ownership: After successful registration, you will receive a certificate of title, which confirms your ownership of the property.
• Planning the next steps: Determine whether you will live in your new property, rent it out, or use it as an investment.

By following these instructions, you will be able to successfully go through the process of buying a property in South Cyprus. Do not forget the importance of working with professionals such as agents and lawyers to protect your interests and avoid possible risks.

Legal and juridical aspects of buying real estate in South Cyprus

Buying a property in South Cyprus requires careful attention to legal and legal aspects. Here are the main points to consider to protect your interests.

1- Legal due diligence of real estate

Be sure to do a due diligence on the property before you buy. This includes:

• Verification of documents of title: Make sure that the seller is really the owner of the property. Request copies of the certificate of ownership and other documents that prove his right to sell.
• No debts and encumbrances: Check for any debts associated with the property, such as mortgages or liens. You can contact the Department of Land Resources or a lawyer for this purpose.
• Example: A friend of mine almost lost her money when she bought an apartment in Limassol without checking the documents. It turned out that the previous owner had failed to pay the bank and the deal could have been challenged.

2. Rights and obligations of foreigners

Foreigners can own real estate in Cyprus, but with certain restrictions:

• Limitation on the number of objects: Foreigners can only purchase one apartment or house. However, the purchase of plots of land for foreigners is prohibited if they are not Cypriot citizens.
• Exceptions: Certain categories of investors may be authorized to purchase land plots. It is advisable to consult a lawyer for up-to-date information on your rights and options.

3. formalization of property rights

Once the property has been selected and all inspections have been completed, the title must be issued:

Registration with the Department of Land Resources: This is a key step to confirm your title to the property. You will need the following documents:

• Contract of sale.
• Identification card (passport or ID).
• Proof of payment of taxes (e.g., real estate acquisition tax).

Significance of registration: Only after registration do you become the legal owner of the property. Without this step, your rights to the property may be challenged.

Following these legal steps will help you avoid many risks and protect your interests when buying property in South Cyprus. Don't forget the importance of working with experienced lawyers and real estate agents who can help you understand the intricacies of the process.

Taxes and fees on the purchase of real estate

When you're well on your way to buying your dream home, you shouldn't forget about the taxes and fees that may arise in the process. Let's take a look at the main ones.

Notes:

Tax benefits: Be sure to consult with a lawyer or tax advisor to take advantage of all the tax advantages available to you.

Tax on acquisition of real estate: It is important to know that rates are subject to change and it is advisable to check with your local tax advisors for up-to-date information.

Annual maintenance costs: These costs can vary depending on your lifestyle and property features, so it's worth budgeting in advance.

Cost of real estate and financing of purchase in South Cyprus

Approximate market prices for real estate:

• Limassol: The average cost of an apartment reaches $2,650 per square meter (at an exchange rate of 1 euro = $1.06).
• Paphos: The average cost of an apartment is about $1,590 per square meter.
• Factors affecting the cost:
  • Location: proximity to the sea and developed infrastructure.
  • State of the object: new constructions are more expensive than secondary housing.
  • Availability of infrastructure: accessibility to stores, schools, hospitals and transportation links.

Financing options:

• Mortgage loans: Available to foreigners, covering up to 70% of real estate values.
• Interest rates: The average is 3-5%.

Peculiarities of lending to foreign citizens:

• The following documents are required to qualify for a mortgage:
  • Passport.
  • Income statement.
  • Credit history information.
• It is important to prepare all the necessary documents in advance to avoid delays and problems in the loan process.

These key points will help you to properly organize the process of buying property in South Cyprus and assess your financial possibilities.

Residence permit and citizenship through investment in South Cyprus

Buying real estate in South Cyprus can be not only a financial investment, but also a path to obtaining a residence permit or even citizenship. This makes the country particularly attractive to foreign investors. Let's take a closer look at how it works.

1. Buying real estate as a way to obtain residence permit

If you are purchasing real estate for an amount of $318,000 (€300,000), you can apply for a residence permit. This process is quite simple and involves several steps:

• Preparation of documents: You will need to provide proof of your financial solvency and proof that you have made an investment. For example, you will need to submit a sales contract and bank statements.
• Advantages: With a residence permit, you can live and work in Cyprus and travel to Schengen countries without a visa. This is a great opportunity for those who want to enjoy life on this beautiful island.

2. Citizenship by Investment Program

If you are considering more serious steps, it is worth looking into the citizenship by investment program. For this, you will need to invest at least $2,120,000 (€2 million) in real estate. The process also includes submitting documents proving your financial solvency and lack of criminal record.

• Advantages of obtaining Cypriot citizenship: You will have access to EU-level education and healthcare, as well as visa-free travel to more than 170 countries. This is especially important for families with children who are planning to study abroad.

3. Advantages and rights provided by residence permit and citizenship in Cyprus

• Rights of residence permit holders: Holders of a residence permit are entitled to work and do business in Cyprus, as well as to receive medical services.
• Rights of Cypriot citizens: Cypriot citizens can vote in elections and participate in the political life of the country. This makes Cyprus not only a vacation destination but also a great base for business and life.

Now that we have discussed all aspects of obtaining residency and citizenship, let's move on to the peculiarities of registration and maintenance of housing in South Cyprus.

Risks and tips for buying real estate

Buying real estate abroad is always associated with certain risks. Let's take a look at what you should pay attention to in order to avoid common mistakes.

Possible risks

One of the main risks is legal complexity. Insufficient checking of documents can lead to problems with ownership. You should also beware of scammers who may try to sell you a property with encumbrances or in poor condition.

Recommendations for choosing a property

When choosing a property, pay attention to location and infrastructure. A well-developed infrastructure is the key to a successful investment. It is also worth paying attention to the condition of the object: do not be lazy to conduct a detailed inspection and, if necessary, invite a specialist for evaluation.

Tips from experts

Don't forget the importance of working with professional agents and lawyers. They will help you avoid common mistakes and protect your interests. And, of course, always check the documents and terms of the deal to be sure of your purchase.

Conclusion

Buying property in South Cyprus is a great opportunity not only for investment, but also for creating a new home on this beautiful island. Approach the process wisely, plan carefully and consult with professionals. If you would like to learn more about buying real estate, feel free to contact our experts. We are here to help you every step of the way!

Let your dream of real estate in South Cyprus become a reality!