‘Cyprus Investment Scheme’

Changes to the law relating to title deeds have ramped up protection and peace of mind for prospective buyers, with additional legal safeguards streamlining processes and efficiency. These types of measures have also paved the way for increasing confidence to invest in Cyprus real estate. The island has mainly been on the radar of British buyers, due to the countries’ historical ties, strong tourist market and attractive tax treatment – particularly for expats and retirees who pay just 5% tax on pensions, a carrot that may disappear in the wake of Brexit. The Immovable Property Tax (IPT), which was significantly reduced in 2016, has now been abolished, while temporary reductions in property transfer fees introduced in 2015 have been made permanent. Purchases that include VAT incur no property transfer fees, while VAT-exempt purchases incur only 50% of the previous fees. In addition to the UK and Europe, interest from investors in China, Russia, the Middle East, and beyond has also grown. This swell was also reflected in the figures for foreign direct investment in Cypriot real estate, which has exceeded well over €2 billion in the last few years.

 

Although property hunters are spoiled for choice, Cyprus has staunchly headed more towards the luxury market direction – a fact evident in the plethora of extravagant residential developments rapidly rising up along the coast and most exceeding the half million price tag. These range from apartments in architecturally unique high-rises to exclusive villas in five-star complexes, golf course and seafront developments as well as boutique townhouses. This segment of real estate and construction has significantly benefitted from the aforementioned Cyprus Investment Scheme, which was introduced by the government to attract more high-net-worth individuals, investors and entrepreneurs to the island. The programme offers individuals EU citizenship with the opportunity to reside indefinitely in Cyprus if they acquire a permanent residence worth €500,000 and invest a minimum of €2 million in a business venture. If an applicant chooses to invest only in residential property in Cyprus, their initial investment is €2 million. Investment options include real estate, investment in Cyprus companies and in investment funds and bonds, or a combination of the above. The scheme, which was originally launched to help kickstart the economy in 2013, has to date garnered more than €5 billion in investments to Cyprus.

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