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Buyer Guide: Why Cyprus?

More and more people are choosing Cyprus when buying their dream home abroad, This is because Cyprus is a lovely safe place to live with friendly people, excellent climate, stunning scenery and much much more. The island offers cosmopolitan restaurants, traditional tavernas, luxury hotels and plenty of shops. The local municipalities organise social events for the families to have fun days out. Property on the island is much sort after this is due to the low cost of living, tax benefits, clean beaches, and the lowest crime rate in Europe.

Why Paphos?

Only a 20 minute drive from the airport Paphos has so much to offer.

For the sporting visitor Paphos offers all the water sports you need, including some of the best scuba diving along the beautiful coast line. There are many regular boat trips to see many places of importance Lara beach being one famous for its turtles. There are also jeep safari, mountain bike and quad tracks that show you the true beauty of some of Cyprus. Paphos is only 20 min from three golf courses, among which, one is aiming for PGA standard.

There is also an abundance of activities for the children with go- carting, mini golf, the aquarium, water park and sandy beaches are just some. Those who are here just to enjoy life and relax, Cyprus is a place where time has no urgency. There are so many luxury spas and all hotels let non guests use their facilities.

Personal Income Tax

Since the integration to the European union, Cyprus has become a tax heaven. UK citizens who become a Cyprus tax resident can receive up to 70% reductions on their income tax bill. As long as you declare your worldwide income in Cyprus, the UK government cannot ask you to pay more tax.

All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are taxed on income accrued or derived from sources in Cyprus.

An individual is tax resident in Cyprus if he spends in Cyprus more than 183 days in any one year. Days in and out of Cyprus are calculated as follows:

  1. the day of departure from Cyprus counts as a day of residence outside Cyprus.
  2. the day of arrival in Cyprus counts as a day of residence in Cyprus.
  3. Arrival and departure from Cyprus in the same day counts as one day residence in Cyprus.
  4. Departure and arrival on the same day counts as one day of residence outside Cyprus.

Legal

Buying a property in Cyprus is very easy. Your chosen lawyer should work solely for you and be independent. Once you have found your property you will secure your property with a deposit. This will take the property off the market and bind the owner securing the price you agreed. There is no “gazumping” in Cyprus. your instructed lawyer will have the chance to do all the standard paper work.

They will do a search at the land registry to check if there is any mortgages, or impediments on the property you intend to buy. They will do a thorough check to make sure there is going to be no mishaps in the future.

Contract

Your lawyer will then prepare a contract. He/She will examine all details of your purchase. This can take 24 to 72 hrs to sort out. He/She will then prepare all agreed terms and read them out to you in detail. By this time the relevant searches will be in place before you sign.

You must check through this contract and make sure there is no unfavourable clauses added. Main points to check for include:

  • The right to sell your property even though the title deeds are not in place.
  • The right to sell your property the way you see best.
  • A 12 month construction guarantee (new property only)
  • Expected delivery date, include penalty clause if you feel necessary.

Sign Contracts

Once you feel happy about everything and your sales man is happy, you are in the position to sign your contract. If you are not in the country when they are completed they will be sent to you for you to sign.

The developer or seller will then sign the contract in front of your lawyer. Your lawyer will then present your contract to the tax office to be stamped and then registered at the land registry. All your rights are now protected and there will be no issues for you to worry about.

Payments

You will have agreed in your contract the payment structure, Normally you will pay your initial 20/30% within 28 days of signing contracts. You can pay this through your lawyer. It is recommended this way as your lawyer will be able to keep on file all transactions. Your lawyer will then inform you once he receives your funds and will then ask your permission to forward to the developer/seller. These transaction are done best through currency exchange where they will get you better rates.

Mortgages

Recommended Housing Loan for Cyprus Investment Properties

Most of the property purchasers coming from abroad are eligible to acquire a housing loan from Cyprus banks and financial institutions under the following conditions and benefits:

A) Required age limit: Up to 70 years
B) Minimum deposit, 20% of sale price
C) Repayment period of up to 30 years
D) Grace period of up to 2 years or until completion of property where the purchaser will have no repayments or interest payments to make.
E) Interest rate: you can apply for a multi currency housing loan, where you can choose any currency, enabling you to take advantage of lower interest rates.

What is required by the bank or financial institution:

1.) Bank reference from your bank .
2.) Bank statements from your bank.
3.) P60 or any other evidence of your income.
4.) Contract of sale stamped and lodged to the land registry.
5.) Proof of payment of the deposit (min. 20%).
6.) Copies of passports.
7.) Power of attorney given to your Cyprus solicitor.
8.) Bank account with the bank you will be applying for the loan.
9.) Tangible security that the property will be provided by the developer.

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