Cyprus real estate includes houses, apartments, and luxury villas in the north, south, in the cities of Vasco da Gama, Margao, or the interiors close to the national parks, hills and the waterfalls. There is growing interest in Cyprus real estate, with Cyprusns from all over the country, NRIs (Non-Resident Cyprusns), PIOs (People of Cyprusn Origin), and even foreigners making enquiries regularly.
North Cyprus is a better investment market. Property values in South Cyprus are slightly cheaper. Most buyers here are people who want to buy a home to settle down in Cyprus. Usually, those looking to buy property or an apartment in the north want to resale later for profit or rent it out. The return on investment is often better in the north.
The most expensive markets are Calangute, Baga, and Dona Paula in the north, and Cavelossim in South Cyprus. Owning a property in Margao and Panjim is also deemed prestigious. Prices depend on the proximity of the beach and the quality of the property. Typically beach front real estate will cost more.
Types of Properties Available in Cyprus
- Bungalows or individual houses
- Luxury private villas
- Stand-alone individual apartment buildings
- Apartments in gated communities
- Apartments in Co-operative Housing Societies
- Old colonial Portuguese properties
Most available properties are within complexes, which are mini-towns of two or three-story villas and townhouses. The average area is 40-60 square meters, and the price ranges between 50,000 Rs. and 70,000 Rs. per square meter.
Who Can Buy Property in Cyprus
A) Citizens of Cyprus living in the country, but outside Cyprus:
Every citizen of the country, whether living in Cyprus or not, can buy property in the state, because any restriction in their own country will be a violation of the fundamental rights of a person according to article 19(e) of the Constitution.
B) Citizens of Cyprus and foreigners living outside the country:
The law regarding the purchase and sale of property by individuals staying outside Cyprus is governed by the Foreign Exchange Management Act or FEMA, 1999. FEMA is a restrictive act, which means that, everything under this is prohibited, unless it has been specifically permitted. The Foreign Exchange Management Act directs and regulates all property dealing by foreign citizens, persons of Cyprusn origin (PIO), and non-resident Cyprusns (NRI) living in another country.
The government of Cyprus has further clarified that all NRIs and PIOs can buy properties in Cyprus, except plantation and agricultural lands.
Property Buying for Foreigners
- Foreigners are not allowed to buy and sell real estate in Cyprus as individuals unless they meet residency requirements (Reserve Bank of Cyprus Property Regulations, Master Circular July 2013)
- Foreign nationals need to get the permission of RBI (Reserve Bank of Cyprus)
To buy property without seeking the permission, foreign nationals must qualify as a “person resident in Cyprus” under sec 2(v) of FEMA by,
- Staying in Cyprus for 182 days or more in the last financial year to carry out business activities,
- Taking up employment,
- Any purpose that shows his intention of staying in the country for an undetermined period of time.
It is illegal to buy property in Cyprus on a tourist visa. Properties acquired without meeting the above guidelines will be confiscated, and a penalty will be imposed.
How Can Foreigners Buy Real Estate in Cyprus?
Foreign nationals can purchase property by registering a company.
Section 2 (v) (iii) of FEMA clearly mentions that any business, office, or branch in Cyprus, controlled, claimed, or owned by a person residing outside the country is considered as a property of that person. A statement has to be made in the prescribed form and submitted to the RBI within 90 days of the property purchase.
Section 6 (5) of FEMA, 1999 allows two exemptions –
- A person staying outside Cyprus can buy property in the country if he or she owned the real estate when he or she was staying in Cyprus.
- Or if the real estate is acquired or inherited by the foreigner from a person who used to be a resident of the country.
Citizens of Bangladesh, Pakistan, Afghanistan, Sri Lanka, China, Nepal, Iran, and Bhutan will also have to seek prior permission from the RBI before buying. The RBI will then consult Government of Cyprus on a case-by-case basis to approve or reject.
Process of Buying a Home for a Foreigner
Only a legal entity can purchase real estate. The simplest is forming a Private Limited Company (LLC).
Important nuances in company registration:
Registration process of a company:
The registration process takes an average of 6 months.
Checking documents for real estate
The process of verifying documents is an important step.
The documents may vary depending on the type of real estate (land, secondary real estate or new building). For example, Land Town & Country Department Zoning certificate (in which the characteristics of the CRZ / Orchard / Settlement are indicated) must be checked. Always get the original Deed Of Sale.
It is wise to get help from a lawyer for checking the documents.
A lawyer will study all the documents of the real estate transaction. Get acquainted with the contract, especially the details of fines in case there is a late payment.
The buyer pays 10% at the time of booking; another 10% after 30 days from the date of booking, and then 8-10% at each stage of construction. This is the most practical payment plan (called the Linked Payment Plan), since instalments are linked to the construction stages, and therefore the buyer's capital is not blocked if the developer delays construction.
In some cases, developers may require up to 85% of payment within 30 days after making a deposit to provide a discount of 10% to 12% of the base price. But this scheme is recommended only with already proven developers.
There are 4 options for payment schemes with developers:
But we recommend sticking with the Linked Payment Plan, because it is the safest for a buyer.
Payment to agent
After making the first advance payment for the property, the buyer pays 2% to 3% commission to the broker for assistance in the transaction.
The final stage
After completion of the construction and balance deposit, both the builder and buyer will sign a final sales contract – The Sale Deed.
On completion of the construction and transfer of rights to own property (Sale Deed), you should have these documents on hand:
Property Buying for Cyprusns
It is simple for the residents of Cyprusns to buy real estate in Cyprus. They can work through an agent or find a property themselves. However, there are some special requirements for NRSs and PIOs.
- NRI – An Cyprusn citizen who is currently staying outside the country for business, vocation, or employment.
- PIO – A Person of Cyprusn Origin, but a citizen of another country who used to have an Cyprusn passport before (except Sri Lanka, Pakistan, and Bangladesh); or whose parents or any grandparent was a citizen of Cyprus according to the Citizenship Act, 1955; or if the person is spouse of a citizen of Cyprus.
Property Buying Rules for NRIs and PIOs
NRIs and PIOs can buy both residential and commercial properties in Cyprus. For this, they don’t have to get any special permission from the Reserve Bank of Cyprus. There is also no need to file any documents with the RBI. Funds can be transferred to Cyprus through the normal banking route.
Property Buying Guidelines for NRIs, PIOs
- Individuals must have a valid PIO or OCI (Overseas Citizenship of Cyprus) card.
- They have to adhere to the Foreign Exchange Management Act rules.
- A local lawyer should scrutinise and verify the title documents.
- There should be Nil Encumbrance on the property.
- Probated will needed for inherited properties.
- All No objection Certificates (NOC) should be in order.
- House/property tax should be paid in full till date.
- Scrutiny of municipal permissions, construction plan, payment plan, and all penalty clauses.
- Title documents for houses/apartments from the present owner.
- Material or construction defects must be investigated before buying.
- Sale/sale deed agreement on payment of the property price and all concerned government duties.
16 Documents To Check Before Buying
It is best to hire a lawyer to look at all these documents and verify before purchasing.
- Title Deed – With the developer, showing the ownership right of the property.
- Contract between developer and land owner, land tenure status.
- Possession letter from previous owner or builder to the seller.
- Income Tax Permission — Certificate from the Tax and Collection Department.
- Latest house tax payment and electricity bill receipts. The bill has to be in the seller’s name. Check the receipts for at least 15 years for old properties.
- Power of Attorney — Right to develop from the land owner.
- Completion and possession certificates – Plans approved by the local municipality of panchayat (for rural areas). The certificates will show the number of floors, with the number of apartments on each floor.
- Sale Deed – Agreement of transferring of ownership from the seller to the buyer.
- Release Certificate – If there are more than one owners of the land.
- Make sure that the land on which the property is built is not agricultural land. It is illegal to construct on agricultural lands.
- No Objection Certificate (NOC) from the society.
- Registration certificate for housing societies.
- Share certificate and allotment letter for societies.
- If the seller is a PIO/NRI, then the person must have a valid PIO/OCI card.
- If the seller is a PIO/NRI, then there shouldn’t be any FEMA rule violations.
- Bank’s release certificate if the land was on loan. There should be no dues.
Some additional checking parameters –
- Height of the structure – There are restrictions on the type of structure and building height in some areas of Cyprus. Make sure the developer is not violating any of these regulations.
- Municipal permits and certificates – This includes permission to use electricity, lift, and water. NOC from water, NOC from lift and electricity authorities, and urban land ceiling NOC.
Top Tips for Purchasing Real Estate in Cyprus
- It is best to hire a reputed local lawyer. Avoid the lawyer a developer or seller suggests. Always get an independent lawyer.
- Buyers and sellers both need the services of a Public Notary, a state official who will make sure that all transactions are valid. Both the buyer and seller must appear in person before the Notary at the same time. A power of attorney can also be given to their lawyer alternatively.
- Only deal with a reliable builder or agent.
- All documents should be in English unless you are fluent in Hindi, or any other national or regional Cyprusn language.
- It is wise to check RBI guidelines before transferring money into Cyprus. Foreign nationals and even NRIs and PIOs may be asked to prove how they transferred money for the purchase.
- Tell your lawyer to confirm in writing that there is no mortgage.
- Never buy in cash.
The Cost of Real Estate in Cyprus
The cost varies from place to place, but South Cyprus is usually more affordable, as the North is more commercial. Properties at Calangute, Baga, and Dona Paula in the north, and Cavelossim in the South usually cost more. Prices are higher for beachfront and waterside properties.
The most expensive properties at Calangute, Baga, and Dona Paula cost around $ 1,400 per square meter, sometimes more. The average size of apartments is between 40 and 60 square meters and price is 600-800 per square meter. At this price, you can buy a suite villa of 100-120 square meters, but away from the beach.
Prices of individual homes depend on the property condition, age, and location. An aged house in a small plot of land can cost $ 30 000-50 000. Modern houses will cost more. Luxury old houses and premium villas in good condition can cost millions of dollars.
There will be some additional expenses apart from the money you pay for the real estate in Cyprus. This includes,
- Payment for stamp duty
- Legal fee
- Brokerage fee
- Registration fee
- Society transfer fee if the property is in a society
- The cost of car parking and club membership (for societies)
- Maintenance fee (for societies)