Attracting foreign capital has always been among the islands primary objectives. Listed below are some of the benefits that Cyprus offers to investors.

Cyprus is now a new member in the EU. The accession is expected to bring great benefits to the Cyprus Property market as the European laws and regulations are integrated with the Cyprus Economy.

The freedom of movement and labour across borders of the EU is expected to increase the demand for residential and commercial premises.

The deregulation of capital movement in and out of Cyprus along with the deregulation of purchasing property for European investors is believed to increase the capital volume invested in Cyprus and push the price index at higher levels.

The EU membership will be a great asset, for the government, in achieving its strategic target of becoming an educating centre in the region. Cyprus has been successful attracting foreign students, but the EU membership is believed to make a lot of progress in that direction. Colleges applied to become universities and the University of Cyprus has a strategic target to grow consistently every year and reach the number of 10000 students in 2010. Now it has enrolled about 3000 students.

This of course is very important for investors that target the residential property market.

The downturn of the Cyprus Stock Exchange pushed most of the capital towards the property market, since the stock market could not rise up to investor expectations leaving the property market as the best major investment alternative in Cyprus

The banking sector in Cyprus is making a strong statement since the two larger banks in Cyprus showed impressive results for the first nine months of 2004. Bank of Cyprus, the largest bank recorded 30.7 millions in net profits the first nine months of 2004. In 2003 the profits were recorded at 9.8 million and in 2002 18 million. The bank anticipates that profitability will continue to increase until the end of the year. The second largest bank doubled its profitability comparing to last years results.

The banking sector is the major financier for both investors and developers; thus having a strong banking sector is very beneficial to the property market.

Cyprus property market is expected to be benefited from the uncertainty and the pessimistic expectations in the English property market, since many investors will prefer to transfer their capital to more secure property markets with better future prospects.

Cyprus property is an ideal alternative for English investors since Cyprus uses the English legal system, has a very well developed accounting and banking infrastructure and practically everybody in Cyprus speaks English.
British investors have very strong buying power comparing to the Cyprus property prices and they can use gearing from their investments in England to buy significant properties in Cyprus.

The interest rates in Cyprus are set up at LIBOR 5.5 plus risk. Interest rates are considered to be high but this does not seem to stop investor activity since by liquidating their investments they incur a lot of cash returns, significantly greater than the lending cost, due to the fantastic performance of capital gains.

Inflation is noted at 2.54 % and unemployment is recorder at 2.9%. Both rates are obviously very good.


Foreign investors do not have a problem investing in the Cypriot market.
It is advisable however when investing in more than one dwelling to invest through a company as some regulations on private acquisition of property still exists.

Cyprus has an established well functioning property market where all sections of the industry operate efficiently. Investors are not expected to find any comebacks when buying or selling property; or in getting financing, advice or any legal protection in Cyprus.

Past performance experience showed that while rental return protected investors from inflationary pressures and provided some real return, investors greatly benefited by the fantastic capital growth performance that the Nicosia property market showed over the last 5 years.

According to Mr Platis, professor of Cyprus International Institute of Management, prices jumped 17% between the year 2002 and 2003. Data used is the market data kept by most leading estate agents in Cyprus.

Financial mirror a leading Cyprus financial newspaper in an article of June 16 2004 (Retiring in Cyprus costs more) mentioned that prices rose by more than 20% annually in Cyprus.

This, as it says in the article, is mostly due to the robust demand from UK house buyers. According to the newspaper, foreigners put in the economy more than 500mln in the year 2003, in Cyprus property and related industries. The property market has not reached the peak of the economic cycle yet as the demand is still high and expectations remain positive.



Immovable Property Tax
The immovable property tax is payable annually. Physical and legal entities are liable to this tax. Immovable property tax applies to the property owned by the taxpayer and is related to the value of the property.

Tax Rates
Property Value (in CP) Rate (%)
Up to 100,000 -
100,000 – 250,000 2
250,000 – 500,000 3 1,050over 500,000 3.5

Transfer Tax
The transfer tax process takes place when transferring the deeds to the buyer. The tax amount is calculated on the market value on the day the transaction takes place.

Transfer Tax Rates
Property Value (CP) Rate (%) Fee (CP)
Up to 50,000 3% 1.500
50,0000 – 100,000 5% 2.500
Over 100,000 8% 4,000

Local Authority Tax
Property taxes levied by the local authorities are in the range of CP 30- 100 per annum, depending on the size of the property. The tax covers garbage disposal, street lighting etc.

Capital Gains Tax
Capital gains tax will be payable at a rate of 20% on the profit with the first CYP10,000 being exempt for each person. The profits are the difference between the sales proceeds and the original cost of the property.

Income Tax
Income tax is 10% on the rental income of the property asset.
In the case of the company owning more than one dwelling the company is liable to income tax instead of capital gains tax.

Cyprus banks offer financing to non residents quite easily.
Rates usually start at 7.50% depending on the bank and the client.
Collateral and/or personal guaranties are requested.
Banks usually lend to non residence up to 70% of the total capital for a repayment period of 15 years.

Property in Cyprus is registered on a land registry, similar to that of the United Kingdom.

The first step is the signing a preliminary contract. This is binding to both the purchaser and the vendor on executing their agreement as it was originally agreed. At this stage a holding deposit is lodged with a Lawyer or a Notary.

The purchasing lawyer will carry out all the inquiries that are needed at the Distict Land Registry to ensure that the vendor of the property is indeed the owner and ensures that the purchaser obtains good title to the property.

Non-Cypriot citizens require permission from the Council of Ministers to purchase property in Cyprus. This normally takes about 8 to 14 months and without this permission Title Deeds cannot be transferred to the purchaser. Although time consuming, this is a quite easy and hassle free process and with the accession in the EU is not expected to take place for EU citizens.

The final contract is entered only if all the inquiries are proven to be satisfactory. The contract is then lodged with the Land Registry within two months if signed, to prevent the same property being sold for a second time.

Application is made at the Central Bank at this time for the necessary permit for the transfer of purchase money. This application is not necessary if both the purchaser and the vendor are foreigners. The transfer of the title deed is then completed, the full price is then paid and vacant possession is given by the vendor. If the property purchased is new, then the title deed will take up to three years to be issued by the authority in charge.

The purchaser is however secured by having the contract of sale with the vendor and that contract is registered in the Land Registry. All the above procedures are usually handled by a solicitor for a very small fee.