Cyprus tax system
Those who plan to move to Cyprus need to get acquainted with the tax system..
Thanks to the sunny warm climate and comfortable tax regime, many Russian-speaking people buy property in Cyprus for permanent residence or use as a summer residence. Since property prices and rental apartments in Cyprus are constantly growing, buying an apartment in Cyprus is a good investment.
Often, real estate is acquired in order to obtain EU citizenship. Vedomosti reports that in 2018, Russian purchases of real estate with the goal of obtaining citizenship increased by 40%. The authorities of Cyprus stated in April 2019 the highest demand for real estate in the last 11 years. The number of registered real estate purchase and sale transactions in April 2019 amounted to 1,057. Last time, this indicator of registered contracts was reached only in September 2008.
Of the 1,057 contracts, 628 (59%) were registered by Cypriots, the remaining 429 (41%) were foreigners (123 are residents of the European Union, 306 are residents of other countries). Real estate sales rose in all areas. Famagusta led the way with sales growth of 85%, followed by Limassol (74%), while the number of transactions in Larnaca, Nicosia and Paphos increased by 69%, 44% and 43%, respectively. According to experts, a surge in sales could be facilitated by tightening the rules of the Cyprus passport program for investments, which entered into force on May 15, 2019.
The cost per square meter of real estate in Limassol is higher than all compared to other cities in Cyprus. The authorities of Cyprus recorded an increase in property prices in Limassol by 1.8% for the first quarter of 2019. Constant increase in property prices in Limassol is due to increased demand for real estate in this city. Demand is born of increased interest in acquiring housing with the aim of renting it out daily to visiting tourists. Foreigners are also actively traveling to Limassol under labor contracts; the headquarters of the largest organizations in the field of Internet technologies are located here.
As a result, now apartments on the first line of the sea in Limassol cost from € 4,000 to € 10,000 per sq.m, in central areas – from € 2,000 to € 4,000 per sq.m. Private houses with sea views will cost buyers about € 4,000 per sq.m (including those located in central areas).
The cost of renting apartments near the sea is from € 13 per square meter per month, the same price for renting in the city center. Rent of commercial real estate will cost from € 20 to € 30 per square meter per month.
Property prices in Paphos are lower than property prices in Limassol by 30-50%. Studio apartment in Paphos can cost 50,000 euros. Such options are rare. Average prices for studio apartments in Paphos are 65,000-85,000 euros.
The cost of a townhouse in Paphos with two or three bedrooms can vary from 90,000 to 120,000 euros. Most often, a pool is located on the common house territory.
The cost of a villa in Paphos with two floors and a plot of several hundred square meters will start from 250,000 euros.
Property prices in Larnaca are very close to Paphos property prices. For example, for 90,000 euros there is an opportunity to buy apartments with an area of 50-70 square meters. Cyprus authorities recorded a 0.7% price increase in Larnaca in the first quarter of 2019. Larnaca attracts home buyers with its moderate real estate prices, proximity to the international airport and a quiet atmosphere in the city.
Despite the fact that Nicosia is not located on the Mediterranean coast, the cost per square meter of real estate here is slightly lower than the prices in Limassol. The high demand for real estate in Nicosia is due to several factors. Firstly, it is the capital of Cyprus and many international and local companies are located here, which leads to a constant increase in jobs and, accordingly, demand for real estate. Secondly, Nicosia is a very progressive city with a well-developed infrastructure, a large number of malls and shopping centers, a stream of tourists and the presence of a huge number of cafes, restaurants and institutions for cultural events. The construction of new facilities in Nicosia is proceeding rapidly. Modern high-rise buildings, luxury hotels, large-scale entertainment and shopping centers are being built here. The cost of modern spacious apartments of 150 square meters in Nicosia is about 300,000 euros.
Property value has doubled over the past 10 years. This is primarily due to building a favorable economic environment. Investors from all over the world are investing in the economy of Cyprus. Cyprus is very attractive to international companies. For example, in Cyprus the lowest income tax in the EU is 12.5%. The authorities of Cyprus contribute to the inflow of capital into the country by offering profitable programs for obtaining citizenship and residence permit. New international developers are constantly entering the Cyprus property market, stimulating an influx of jobs and demand for housing. The flow of tourists in the tourism sector is constantly growing. In Cyprus, modern hotels and hotel complexes are being built. Near Limassol, the Cyprus government is erecting the largest casino in Europe, which will further add to the rapid growth of the region’s infrastructure. The authorities of Cyprus expect an increase in the cost per square meter of real estate by 5-7% every year and contribute to improving the lives of the islanders by developing infrastructure.