30.10.2023
To obtain a residence permit in Cyprus, you must purchase housing with a minimum cost of 300,000 euros. However, in some cases, real estate agents, brokers, property developers, etc. tell potential applicants that it is not the purchase price that is important, but how much the property is worth.
A real estate agent told a client in Larnaca that by purchasing an apartment at the agreed price of 170,000 euros, he would be able to obtain a residence permit, since the cost of the apartment was at least 300,000 euros.
This is a racket. The state will not do this, and if clients are tempted by such assurances, they will be deceived and lose large sums of money for real estate, plus attorney fees and other expenses, but will not receive the right to obtain a residence permit.
This is a dangerous development that, among others, could harm this very successful effort to attract foreign investors. The Ministry of Home Affairs should issue a directive in this regard, clarifying its position regarding cost versus purchase price, etc.
It appears that various intermediaries and sellers are trying to their advantage to convince applicants that a lower price means a lower transfer fee, without informing them that if they resell, the capital gains tax will be higher.
Another problem is that the processing of residence permit applications for new properties takes six months, but for resale the applicant may have to wait a year. This puts sellers in a position where everyone must be equal.
Another example of fraud is inflated prices on the part of lawyers and accountants who take on the process of obtaining a residence permit. A lawyer in Paralimni assigned a fee of 7,500 euros to a client in Paralimni . He refused and received the same service from a large law firm for 2,500 euros.
At the same time, real estate agents ask for a commission of about 20%. In one case in Larnaca, a seller agreed with a Chinese real estate agent to sell his seaside home for €1,800,000, with the agent receiving €800,000. I wonder if the Cyprus authorities will recognize such a high commission, and if not, the seller will pay tax on the entire amount of 1.8 million euros.
The procedure for obtaining a residence permit when purchasing real estate has brought many billions to the Cypriot economy in recent years, but due to the dishonest, greedy behavior of some local and foreign specialists, it is under threat.
