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Key Property Facts
Types of Tenure:
Property in Cyprus can be bought on a freehold or leasehold basis.
Restrictions:
Cyprus became a full member of the EU on 1st May 2004 resulting in many changes for EU Nationals planning to purchase property in Cyprus:-
- An EU National resident in Cyprus is allowed to buy as much property in Cyprus without restrictions and does not need to obtain approval from any authority.
- EU Nationals who are not resident in Cyprus are permitted to buy as much land as they wish but are restricted to purchase one house or one apartment for which approval from the Council of Ministers is required.
- In order to comply with the idea of free movement of people and goods, certain restrictions have been lifted. Citizens of the EU may enter Cyprus without restriction, using only their National identity card (with photograph) as evidence of who they are.
- Exchange control restrictions are no longer in force and it is longer necessary to prove that the property was purchased from External Funds.
Property Rights:
Cyprus scores 90% in the Heritage Foundation’s assessment of the security of its property rights. The Heritage Foundation states:
”Contracts and property rights are enforced effectively. Under the constitution, the civil judiciary, including the Supreme Court (which carries out the functions of a constitutional court, a high court of appeal, and an administrative court), is independent from government interference. In practice, this is not always the case, but the judiciary has nevertheless caused the government to suffer several embarrassing defeats”.
Mortgage Finance:
Most commercial banks in Cyprus are authorized to offer mortgage facilities to local as well as foreign applicants to assist in the purchase of their property
There are no non-status/ self-certification mortgage facilities available in Cyprus; however, renting out your property is permitted. All loans need to be supported by proof of income. If you are employed, you will need to produce your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need copies of your Audited Accounts together with you last 12 months business, and 6 months personal bank statements.
The Lenders in Cyprus will not take into account any proposed rental income from the property that you wish to buy; your loan will be based on your personal (or joint) 'net' pay, and is calculated on an affordability basis. For you to be considered by the lenders in Cyprus you total out-goings must not exceed 35% of your net monthly income.
Example: If your total net monthly income is £1,000, your total outgoings should not exceed £350. The minimum amount available to put toward mortgage payments must be £650 per month.
Banks will usually require the following documents during the mortgage application process:
1. Customer’s details: Personal details, occupation, duration of your employment contract etc.
2. Passport copies (Photograph & personal information).
3. Statement of existing debt (if any).
4. A reference Letter from the Bank you maintain an account with.
5. Completion of the Declaration of Personal Income form.
6. Evidence of income: Pay slip, confirmation of remuneration from your employer, P60 or business accounts.
7. Purchase agreement.
8. Copies of bank statements for the last three months.
9. Copies of payments already made by the applicant for the property.
Issues & Risks:
Cyprus joined the euro zone in January 2008 - the first major currency shift since the introduction of the Cyprus pound by former British colonial rulers in 1878.
Admission to the euro zone can help bring together the economies of the divided island, split along ethnic lines since a Turkish invasion in 1974 triggered by a brief Greek-inspired coup.
Use of the euro applies only to the Southern part of Cyprus controlled by the island's internationally recognised Greek Cypriot government. The north, a breakaway Turkish Cypriot state recognised only by Ankara, will continue to use Turkish lira.
As a result of entry in to the Eurozone, Cyprus will reap economic benefits such as low inflation and interest rates. Other members of the Eurozone may find it a more attractive trading partner due to the removal of transaction costs and exchange rate risks.
Regulations:
The Constitution of Cyprus establishes the equality of all persons irrespective of their nationality and includes provisions for the protection of human rights of all persons without discrimination. Any violation by an administrative authority of a person's fundamental rights entitles such person to request this authority to remedy the situation. The administrative authority in this case has a period of 30 days during which it must give a prompt answer to the petitioner.
Furthermore, such person has free access to any competent Court in Cyprus, as well as the European Court and Commission on Human Rights. The right of ownership of immovable property is considered as one of the fundamental human rights under the Constitution of Cyprus and as such it is clearly and absolutely protected.
According to section 23 of the Constitution, compulsory acquisition or imposition of restrictions on immovable property by the Government is regulated by the Compulsory Acquisition Law, No. 15/62, whereby the Government may acquire, in the matter of public interest and by giving just cause, property with payment of immediate compensation to the owner at the present market value.
This law also provides that properties acquired as above should be returned to their owners if the purpose for which they were acquired does not materialize within three years from the date of acquisition. Therefore foreigners who own property in Cyprus can also enjoy all those rights pertaining to property which are available to the citizens of Cyprus and can be assured that their property is absolutely protected.
All disputes arising from transactions concerning immovable property are governed by the laws of Cyprus and are subject to the jurisdiction of the courts of Cyprus. The parties may, in some circumstances, agree concurrent jurisdiction of other courts or refer any dispute to arbitration before resorting to court proceedings.
Industry Associations:
Key Property Markets:
Paphos
Property in Paphos, a popular coastal town in the southwest of Cyprus offers buyers spectacular scenery in some of Cyprus's nicest beaches. Though the current inhabited city is New Paphos, there were two Cypriot locations called Paphos in ancient times: Old Paphos and New Paphos. Thanks to the town's rich history property in Paphos is varied and diverse with something to be found no matter what your taste.
A popular tourist destination, Paphos is home to beautiful beaches, white washed villas and its attractive harbour lined with bright fishing boats and restaurants. As well as being a great holiday and second home destination, Paphos offers magnificent history, culture and architecture.
Limassol
The second largest city in Cyprus, Limassol is located on the islands southern coast and is the capital of Limassol District. Property in Limassol is plentiful on the seafront; ranging from luxury villas to the more modest apartments. Limassol is the heart of the wine making industry, so a property would be perfect for weekends and holidays spent walking through the city streets after evenings spent wine tasting.
Larnaca
Larnaca, the oldest living city of Cyprus and situated on the island's west coast, is home to Cyprus' major international airport - Larnaca International Airport; making visiting your property in Larnaca nice and easy to get to! It is the island's second largest port and is an important tourist resort as it is one of the major seaside resorts in Cyprus with numerous beaches in around the city which extend approximately 25km.
When buying a property in Larnaca, you benefit from the proximity to fantastic beaches as well as being close to the facilities and amenities of the major tourist resorts. The main beaches in Larnaca, Phinikoudes and McKenzie; both have been awarded Blue Flags for environmentally cleanliness. Along the Larnaca Bay there are luxury beach hotels, apartments in Larnaca and villas in Larnaca with the city itself offering a wide variety of restaurants, taverns, cafes and bars.
Famagusta
On the east coast of Cyprus is the city of Famagusta, capital of the Famagusta District. For those who enjoy taking in historical sights and monuments property in Famagusta is the perfect choice. Famagusta is home to spectacular ruins, including an amphitheatre, Roman baths, a gymnasium and royal tombs.
Today, Famagusta is a bustling university city where Eastern Mediterranean University, Cyprus' oldest and biggest university, is located and lies directly north of the established, lively resorts of Aiya Napa. This makes property in Famagusta a great investment option as the presence of the university means that rental accommodation will be in demand year round. Famagusta, however, relatively underdeveloped with villas in Famagusta, apartments in Famagusta and houses in Famagusta built in quieter villages and towns.
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Key Property Facts:
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