Buying property in Cyprus

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Cyprus - The next property hotspot

Cyprus is tipped by the experts to be the investment hotspot of the next 10 years. The property industry is booming and while most second home buyers are looking in Spain, France and Portugal, Cyprus is definitely on the up.

Some experts have forecast a capital growth on property in Cyprus of 40% over the next two to three years, and an average annual growth of 15% to 20% over the next 10 years.

The brilliant climate makes it a perfect all year round holiday which means that Cyprus has a strong rental market. Tourist numbers are on the up with no signs of slowing down. As part of the EU Cyprus is politically and economically stable and as an ex-British colony it also has a strong British influence in administration, law and culture. This makes it both a safe and easy place to buy. The fact that tourism makes up a large part of the Cyprus economy means that an investment in the country is not reliant on this becoming a new boom economy attracting new industry and commerce. Cyprus also has some tax advantages that many other locations lack. Cyprus is however still be regarded as a base level opportunity because its property investment market is still largely underdeveloped. This however means that returns are likely to be far higher.

Buying property in Cyprus

Cyprus became part of the EU in 2004 and which meant that the government had to start aligning its rules relating to foreign freehold ownership of real estate with the rest of the EU. At the moment overseas purchasers are only able to own a single property in Cyprus on land not exceeding 4000 square meters. While the process is slow when it comes to constitutional changes being made, change is underway to amend these rules. Buyers may however get around this problem by forming a Cyprus based company and acquire land and real estate via that company.

English speaking developers and real estate agents are abundant in Cyprus due to the popularity of Cyprus property with British property buyers. This makes the buying process fairly simple and straightforward. The first step is of course to locate a suitable property. If the property is a resale property then an offer should be submitted to the vendor via the estate agent. If the offer is conditional to various stipulations such as the inclusion of furniture for example, this needs to be made clear.

At this point a buyer is advised to secure the services of a solicitor in Cyprus who will conduct all the searches on the property and help with the buying process. Once the offer is accepted by the seller, the buyer will pay a deposit to ensure that the property is taken off the market.

The solicitor should begin title and land searches and draw up the purchase contract. Only a single purchase contract is signed in Cyprus. This should be done by the buyer when all the checks have been conducted satisfactorily. The alternative is to sign a contract which is conditional to all searches being conducted satisfactorily.

As far as contract closure goes, both the seller and the buyer will sign the contract which is notarised and submitted to the land registry in Cyprus. This is when the purchase price will need to be paid unless the buyer has bought off plan and then various stage payments will need to be made for the property throughout the build process.

The buyer will then have a month to make all tax and fee payments. Shortly after signing the purchaser contract, the buyer's solicitor will apply to the Council of Ministers in Cyprus for the buyer's right to own the property. This is a mere formality. In terms of costs associated with buying property in Cyprus buyers are advised to consider 15% VAT, lawyers fees of approximately £1,000 to £2,000, property transfer tax and stamp duty as well as local authority tax and immovable property tax.
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