How much does it cost to buy a house in Cyprus

Have you ever thought or imagined living on a beautiful island like Cyprus? Have you ever imagined what it would feel like living in a city close to the Mediterranean sea, home to historical events, forests, hills, rocks, and even waterfalls? Cyprus is the island you should be thinking of.

Cyprus is a country located in the continent of Europe. It is officially called the Republic of Cyprus. It is an island nation found in the eastern zone of the Mediterranean Sea.

It is also the third most popular and the third largest island in the Mediterranean Sea. It is also home to beautiful natural wonders such as hills, rocks, beaches, forests, and waterfalls. It is a habitat to nature in different forms. It is a perfect location for nature lovers. It is home to the very beautiful golden sand beach and lots of other wonders. It can also be a tourist Centre or Zone.

It has beautiful cities that even look more beautiful at night, rocks of different formations, green areas, and even waterfall, and lots more. Indeed Cyprus is a wonderful location to reside in. These features make it a beautiful, wonderful, and enjoyable location to have a permanent or temporary residence or to use as a business by renting out your house or doing some investments.

However, there are lots of things to know about getting or buying a house in Cyprus. One of the most important factors to consider before getting a house in Cyprus is cost. That would be considered through the following topics:

• Things to know before buying a house in Cyprus.
• Good locations to chose a house to buy in Cyprus.
• Cost of buying a house in Cyprus.
• How to buy a house in Cyprus.
• Things to know before buying a house in Cyprus:

You might want to buy a house in Cyprus for many reasons. Probably as a permanent residence there or as a temporary home to spend the holidays or even to rent out and get some income or as a means of investment. Whatever the reason may be, there are certain procedures to be followed or things to be understood before purchasing a house in Cyprus.

 We would be looking into 5 important things to consider and take note of before buying a house in Cyprus.

1. Prices of properties are increasing:

If you intend to buy a house in Cyprus during Autumn, it is best to be as fast as possible with it so you will get the best price deal available. Annually, there is an increase in the price of houses. Prices of property have increased by up to 80% over the past five years.

Therefore, the longer you wait, the higher the prices of houses get. So it is best to buy as early as you can to get at the lowest price available.

2. Constructions for new homes is increasing:

Over last year, there has been an increase in home permits. Most were located at Limassol and Nicosia. Back in 2017, Paphos and Limassol had quite a huge increase in home constructions.

3. Sales of properties are rising:

There is a vast increase in sales as time passes by. As time passes, the rate at which properties are sold in Cyprus increases by some percentage.

4. You may be given a decreased VAT:

There is a 5% reduction VAT given by the tax department to property buyers if you meet up with the criteria which are to be above 18 years of age,  to ensure the intentions of your property is to serve as your main residence, you shall not have any other property in Cyprus at the reduced VAT rate and the property must be for personal use and not for profit as renting it out. The tax office also applies a reduction to the first 200m² of the property's building area to most people.

5. There are certain conditions at which your properties can be rented out:

You might decide to buy a house in Cyprus but not move in immediately. Renting it out can be a good option to still earn money as time flies. But certain conditions must be implied before you can rent out your property in Cyprus. If you want to rent it for a short-term, each individual lease must be more than 30 days. If less than that, it would be considered illegal. If you decides to give a long-term rent out, it is best to get a local lawyer and two witnesses to make sure it is legal so your contract would be properly drawn up in Greek. You can earn an average of between €310 monthly to €2,000 from renting your house out depending on the location.

• Good locations to chose a house to buy in Paphos

Choosing a good location is an important factor to be considered before purchasing a house in Paphos. Locations can determine the price of the houses as houses become more expensive in more expensive regions of the island. And you would certainly want to be aware of the location you would want a house at.

Therefore, these are the top 5 locations you would love to live in:

1. Peyia:

Peyia is a town located on the far west coast of Cyprus. Just like Paphos, it is also popular with British tourists and experts. Peyia is also a residence for not just British, also Russians, Brits, and recently, even the Chinese. It is a good location for nature lovers. It is home to hills, the turtle bay nature reserve, and even close to the forests of western Cyprus.

This is an ideal place to buy, rent or to holiday let as Peyia has it all, and is very self-sufficient, having banks, restaurants, and shops all within walking distance. A combination of beautiful landscapes and some of the best beaches in Cyprus, great food and entertainment all at your doorstep are just some of the few reasons someone would love to live here. All while just being a 15 minute drive away from Paphos city center, or 20 minutes to the airport. 

The return on investment for a property in Peyia could be up to a 7% depending on how it is used. Prices in Peyia in comparison to the city center and Kato Paphos tend to roughly be 20% lower when it comes to apartments.  

In the whole of Paphos, Peyias records for sales is the highest with around 800 sales last year (2018), most of them being villas. The high amount of sales here proves that it’s a liquid market, therefore selling here will always be an easy task.  

Peyia Hills is one of the more popular projects by Leptos, Vrisoudia Villas by Aristo developers and Rizza Gardens by Maispa.  

2. Tala:

There is a good mixture of both apartments and villas, so buying here meets anyone's needs, either that would be one wanting a permanent or holiday home. Purchasing, selling or renting here are easy as it’s a terrific location and both locals and British expats love it. Having investment in mind a basic two-bedroom apartment would be 500-600 euros a month, while a three-bed villa with a swimming pool would be around 1,200 euros (August 2019).  Tala will work for short term rentals as well since it is close enough to Coral Bay and Kato Paphos tourist area.  

One of the most popular projects of Tala is Tala Chorio, Tala Avli, Stephani Village, a small development with detached villas from Leptos. 

3. Kato Paphos:

If you desire a house, close to the beach with past ancient ruins and still close by shops, bars, and restaurants, Paphos is the perfect location. This town has a newly built hospital, a top-ranking international school, shopping malls, amazing historical town centers, and even an international airport.

4. Aphrodite Hills:

This is a lovely resort to own a home if you appreciate luxury, golf and beautiful scenery since it proves to be a popular choice for those that need to drive to other towns a lot. Between 2018-2019 there were a whopping 99 properties sold in this area including apartments and villas. There were 40 sales of apartments ranging from 110,000 Euros for a one bed apartment and going up to almost 300,000 Euros for a 3 bedroom apartment. There were 30 luxury villas sold with an average price exceeding 500,000 Euros (Half a million euros) with several sales between 1,200,000 Euros (1.2m Euros) to 2,300,000 Euros (2.3m). Price difference for renting is approximately 27% higher for renting at the moment.  This is only a 20-minute drive to Limassol, while only a 10 minute one to Paphos.

5. Coral Bay:

Buying here proves to be highly lucrative as it’s of the most popular places to own a property in according to statistics in sales and also due to the close proximity to the sea. There are a lot of sea front properties in Coral bay which makes it a very popular area for people searching to own a house with the beautiful sea right at their doorstep making it easy to understand why the whole of Peyia sold 344 villas from the beginning of 2018 until mid 2019, a whopping 363 apartments and 53 plots of land.  Apartments here vary from €130-1.500.000 resale while detached villas start at €300.000 and go into the millions. Prices per square meter here are some of the highest in all Paphos region, where a 1 bed apartment will be going for apprx. €1,400/sqm, a 2 bedroom flat for just over €1,600 / sqm and detached villas depending on the proximity to the sea are around €2,700/sqm for a fairly distanced villa and can go to several thousands per sqm for sea front villas. 

• Cost of buying a house in Cyprus:

Buying a house in Cyprus varies according to the location of the house and the quality of the house. For instance, the average price of a two-bedroom flat is around €116,000. This can vary depending on the location. The price is slightly higher in the expensive parts of Paphos.

There are lots of expenses involved in buying a property in Cyprus which include legal fees and taxes. These are the breakdown of the expenses:

• Value-added Tax:

Buyers are entitled to pay a value-added tax that is levied on the market value of the property or the purchase price. The regular VAT rate is 19%. This is only applicable if you are purchasing a new property. For resale properties buyers are paying only Transfer fees.

First-time buyers with areas less than 200sqm on the construction or acquisition of the property can get a reduced rate of 5%. This reduced tax rate can also apply to the construction or acquisition of residence for use as a permanent and primary residence for some 10 years.

• Legal fee:

This is the service of solicitors. It is not necessary but is highly recommended. The legal fee can be negotiable.

The legal fee is within the range of 0.50% to 1.00%.

• Stamp duty:

Stamp duty is levied on documents that are related to the Czech republic's property. The rate levied depends on the price of the property purchased but at the maximum of €20,000. Stamp duty is between the percentage range of 0.15% minimum to 2.00% upwards with €20,000 as its maximum. The stamp duty fee is at 0.15% of the purchase price up to €120,000. For every additional €1,200, the stamp duty fee is at 2% of the purchase price.

• Department of Lands and Surveyors Transfer fee:

For the transfer fee, it equally depends on the purchase price. It works in the following order:

• Up to €85,000 fees are at 3%
• From €85,000 to €170,000, the fee is at 5%
• Above €170,000, the fee is at 8%

Therefore, the transport fee is from the minimum of 3% to the maximum of 8%. However at the moment (July 2021) there is a 50% reduction on the above fee.

• Real estate agent fee:

Buyers do not pay any fees to the estate agents in Paphos, Cyprus. Usually the fee is being paid by the seller to the estate agent.

• How to buy a house in Cyprus:

Foreigners (Non-EU) adult-only entitled to buy one home in Cyprus with a maximum land limit of three donum, that is 4,014sqr m. A permit is required to register the property needed from the government. A normal deposit would also need to be made which usually is around 3%. The contract will then be drawn up and the buyer would have to pay 30% of the purchase price but in the case of a new home, 40% to 50% of the purchase price or property’s value on signing the contract. This contract must then be deposited at the land registry on or before 2 months of signing the contract.

An application would therefore have to be made to the council of ministers for the acquisition of immovable property including bank referent, size of the land to be bought, criminal record, and a statement proving that is the only home you will have in Cyprus.

This procedure could possibly take up to a year, thereby you would not be restricted concerning the use of the property. In some rare cases where approval is not yet granted, the buyer can reapply and has 17 years in which he can sell the property. Therefore, the absence of approval does not affect inheritance rights.

CONCLUSION:

Cyprus is a beautiful island and people have taken residence there. It has been home to foreigners such as the British, Russians, Brits, and even the Chinese. It is a good place to buy a house and this can be done legally.

As a non-citizen, you can only buy one house and it would be transferred to you legally as the owner. You can enjoy having a home in Cyprus, be it permanent residence or temporary residence, or as a means of earning by renting it out or as a source of investment. Though it might take a long while before you can fully gain ownership of the property and you would need to go through a long process before the acquisition or construction of your house can be legal, it is still worth a try. Certain extra payments need to be made such as the legal fee, value-added Tax, stamp duty, transfer fee, and agent fee. Each fee has a legal standard payment percentage range that must be followed depending mainly on the value of your house or your purchase price. If these steps are taken completely and legally, you surely would gain ownership of the house you bought within some time range.

You would also get to enjoy the island’s natural beauty, its numerous beautiful beaches, hills, and historical spots. Hope you have a good time making a house purchase on the beautiful Mediterranean island, Cyprus.

Author: Christos Nikolaou

BEng Mechanical Engineering, MSc Real Estate, ETEK Property Valuer, Register and Licensed Real Estate Agent.

Christos Nikolaou is the founder and Managing Director of Property Canvas, he holds a license as an Estate Agent from the Association of Real Estate Agents of Cyprus and he is a registered Property Valuer in the Technical and Scientific Chamber of Cyprus (ETEK). He is the author of our “How much does it cost to buy a house in Cyprus” and is a certified advance negotiator.