Observing the current real estate and property investment in the Cyprus landscape, it is clear that Cyprus is moving towards noticeable market growth. New real estate projects are being built, and more investors choose the sunny island for their next investment.
In this article, we will explore different information about real estate and property investment in Cyprus and why it is attractive to choose Cyprus for your next investment destination.
Cyprus is the third biggest island in the Mediterranean region. According to data collected through January 2021, it is the third most populous Mediterranean island, with a population of 1.21 million people, and ranks 158th globally. Cyprus has drawn expatriates from worldwide throughout the years, and it now boasts about 110,000 foreign permanent residents.
Cyprus has always been considered a crossroads between major continents, and the island’s geostrategic location has allowed it to maintain a powerful influence throughout history. The island’s beautiful tropical environment draws visitors and ex-pats alike. Summers are usually dry, while winters are moderate, with the sun shining brightly for around 300 days each year.
Economic Growth in Cyprus
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%.
Attractive Taxes for Real Estate and Property Investment in Cyprus
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
Investment Rates and Yield in Cyprus
As per RICS analysis, from 2016 onwards, office yields, which peaked at 4.6% in the fourth quarter of 2016, have shown an upward trend and have begun to catch up to retail rates. For the first time in the fourth quarter of 2019, office yields matched those of retail for the first time (2012-2019). Since 2017, apartment yields have been steadily increasing, hitting a high of 5.0% in Q4 2019.
In Cyprus, the average sale price for a house in 2018 and 2019 (for all quarters) was €1,477/sq.m. and €1,552/sq.m., respectively.
Also check RICS annual review 2019-2020
Investment in Larnaca, Cyprus
Real estate investment in Larnaca is booming, with strong international demand as well as local interest. It’s no surprise that investors are interested in Larnaca because of the numerous property types available. The city’s environment offers possibilities to buy luxurious beachfront homes and modern inner-city flats. Larnaca stands out due to its Mediterranean environment, low crime rates, and well-developed industries, including international trade, marine, and financial services.
Real Estate and Property Investment in Cyprus: 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:
As mentioned at the beginning of this article, 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 email@example.com, call us at +357 24 816246, or Book a 20-Minutes Online Meeting.