A Guide to Buying Property In Cyprus

Thinking of adding to your assets? Then how about buying a property and that too an overseas one? Cyprus is the new destination on the block for property owners around the world looking for a quaint bungalow by the sea to rent out or an elegant villa nestled amidst the hills all for you, to put up during the summer. But you need to exercise some caution when you are buying property overseas, whether it is in Cyprus or anywhere else.

Why Buy Property in Cyprus

In the international real estate market, Cyprus has gained quite a favor despite being a relatively new entrant in the EU. This is because Cyprus boasts of quite a robust economy and a stable currency. Besides, the property market in Cyprus is one of the fastest growing in Europe and is also secure enough to ensure that when you invest here, your hard-earned money doesn’t go down the drains.

Cyprus has caught the attention of the world at large with its luring regime of fairly low income and commercial taxes, moderately low inflation figures and a standard of living that is one of the highest in Europe. This means that having a property here doesn’t involve much of a pinch on your pockets and on top of that, you can expect quite a handsome rental from it.

Cyprus is a good option to explore when you are thinking in terms of buying a property. And it would definitely do you ample good if you follow some simple tips.

What to Do When Buying Property in Cyprus

Before you spend your money on something, you always give it a thought, more so if it is something as expensive as a property. After all, you need to make sure that you are not led up the garden path when dealing with the land sharks.

You have chosen Cyprus as the destination and you couldn’t have been more spot on. It is a thriving tourist haunt, its prime lures being its year-long equitable climate, scenic beauty in the likes of historical monuments and sandy beaches and an eclectic cultural milieu. But even then you need to think awhile before settling for a particular location within Cyprus for your property.

In this matter, take into consideration the use you are going to put the property into. If you plan to rent out the premises, then choose a location that is near the major tourist hangouts of the place and is close to the major modes of public transportation.

If you plan to transform your property into your very own vacation home, then let your heart have the last word. But do some research on the neighbourhood and in particular about the security aspects, the kind of neighbors you will be getting, the public transportation network around your property and the proximity of the departmental store, the daily market and the like (after all, you wouldn’t relish trudging five miles back to home with an armload of grocery).

After you have decided on the particular property, hire a property lawyer or a consultant immediately. Professional guidance is imperative when you are dealing with property. Usually the real estate laws are more or less identical in most of the countries. But still there are peculiarities and intricacies in them and you will require expert advice to steer you through the legal matters.

For instance, Cyprus has conducted Double-tax treaties with UK, USA, Russia, China, Canada, Germany, France and many other countries. This entails that if you are a pensioner from any of these countries, then you can avail your gross pension amount without any tax deduction once you start residing in Cyprus and also pay taxes at only 5% after the initial amount of CY£5,000.

Furthermore, you can also expect tax exemptions of up to CY£4,000 for an individual or CY£8,000 for a married couple in special cases. The Cyprus tax law has further goodies up its sleeves. For instance, Cyprus levies taxes on expatriate properties only on the basis of remittance. These are a few instances wherein only a well-informed professional property lawyer can help you grab the opportunities.

When you are buying property do not settle for the first price quote that is given to you. Take your time, browse around other similar properties and form an estimate of the approximate market value of your property. This way you can make sure that you are not being overcharged.

Speaking about budget matters, when you are buying property, you need to keep in mind that you will need to shell out much more than the actual price of the property. In fact, your expenses will also include lawyer fee, the taxes and of course, VAT. This tax amount of course, varies from country to country. Like in Dubai, there aren’t any taxes. While in Cyprus, the local authority taxes stand quite low at about CY£50 annually.

If you are a foreigner to Cyprus and not well-versed in the language, be very careful when you have to sign on documents written in the local language. Before putting down your signature, be absolutely sure that you have understood whatever is written on the paper and have also read between the lines. But the silver lining in the cloud is that most of the business communication in Cyprus is done in English.

Another thing to guard against when buying a property is that most premises come bundled with hidden debts. So before you sign on any contract, make sure that your builder hasn’t taken any loan for construction purposes that in turn has got attached to the value of the individual plots.

When buying a property, try to arrange for your mortgage principle well before you actually buy the property or go in for any kind of a contract. And until and unless you are sure of receiving a hefty rental amount from your property, try to fix up your mortgage in the currency that you earn in.

Speaking of mortgages, Cyprus offers numerous advantages with Cyprian commercial banks doling out mortgage facilities in both foreign currencies and Cypriot currency. You will only need to tender 20% of the contribution.

Buying a property may sound like too much of a hassle. But then you now know the ways and means to crack the jackpot. So go for it.