Cyprus property investment has become very popular due to the improving economy and growing interest in Cyprus tourism. Cyprus is located in the Eastern Mediterranean. This tiny island country has beautiful beaches with healthy economic growth that offer travelers a romantic and relaxing escape from the busy world.
Cyprus Economy Continues to Grow
The Cyprus housing market has bounced back from years of economic downturn, positively helping the Cyprus property investment market grow. Things are now looking up. The economy and real estate market are stabilizing and improving.
Looking at the latest economic statistic of the island of Cyprus, the Gross Domestic Product (GDP) in Cyprus expanded 2% in the first quarter of 2021 over the previous quarter. It forecasted that the GDP growth in 2021 would be around 4.3% which is healthy within this post-pandemic era.
Observing the last statistic of Cyprus’ real estate market by Deloitte, real estate and construction activities represented the highest contributing gross value-added sector in Cyprus’ GDP for 2019 of 17%.
The economy and real estate market and stabilizing and improving
Low-Interest Rates
From the last interest rates analysis (September 2020) for home loans, the numbers have dropped to 2.10%. This is quite a drop from its peak in 2012 of 5.33% and 2009 of 6.05%.
Also read: Deloitte’s Cyprus Real Estate Market Report
Cyprus Property Investment: Housing Boom
The country’s recovering economy partly drives the housing boom that has occurred in Cyprus. The economy grew by 2.8% in 2016. That was a significant improvement from the year before annual growth of 1.7% (source: International Monetary Fund). The economy continues to improve to this day, which is good news to real estate investors.
Cyprus’ housing market is divided into Limassol, Nicosia, Larnaca, Paphos, and Famagusta’s urban centers. Larnaca’s real estate market is driven primarily by local demand; however, many foreign investors note the area and demand are increasing.
Cyprus Real Estate Market Outlook
The Cyprus real estate market and thus the Cyprus property investment sector is projected to continue improving due to economic growth and improvements in banking systems. Property prices are surprisingly low, which is one of the main reasons real estate investors flocks to Cyprus and its stunning beauty and vacation-worthy seascapes. Property prices are around €1,300-1,800 per square meter. Even though rental returns are moderate, the low prices make up for this. An apartment with 120 square meters may cost around €700-800 per month to rent in Larnaca.
Cyprus Property Investment: Featured Projects
If you seek to invest in real estate in Cyprus, the projects listed below are of the most outstanding quality. They are located in the booming areas of Larnaca, Cyprus:
- Larnaca – City Centre
- Internal Area Up to 97m2
- 2-3 Bedrooms
- Sea View: Yes
- Larnaca – New Marina
- Internal Area Up to 131m2
- 2-3 Bedrooms
- Sea View: Yes
Tax Advantages
The following items are now subject to a 20% capital gains tax:
- Gains derived from the sale of immovable property in Cyprus
- Gains from the sale of shares in businesses not listed on a recognized stock market but hold real estate in Cyprus.
- Gains derived from the sale of shares in firms that indirectly possess immovable property in Cyprus and derive at least 50% of their market value from such immovable property.
When computing the capital gain, the following expenses are subtracted from the sale proceeds:
- The cost of the immovable property if the date of acquisition is later than 1 January 1980, or the value of the immovable property as of 1 January 1980.
- Adjusted for inflation, the cost of any agreed capital additions and upgrades.
- Expenditure made purely to realize a profit (e.g., transfer fees, approved real estate agent commission, interest expense)
Cyprus’s corporate income tax rate is 12.5%, making it one of the lowest in the European Union.
An individual tax resident of the Republic of Cyprus (Cyprus) is taxed on income derived from domestic and foreign sources. Individuals who are not tax residents of Cyprus are only taxed on income earned or derived within Cyprus. Personal income above €19,500 is subject to progressive taxation. Income-generating costs are deducted from gross income using standard deductions.
Also read: Cyprus Tax System: A Detailed Guide For 2021
Conclusion
If you are interested in real estate and property investment in Cyprus, the island’s current economic standing makes it an attractive landscape. More and more investors are choosing Cyprus, and so should you.
If you have any questions regarding real estate and property investment in Cyprus, don’t hesitate to contact us at info@sunshadowinvest.com, call us at +357 24 816246, or Book a 20-Minutes Online Meeting.
