4 types of investments in Cyprus

What is the best way to invest in property in Cyprus?

Cyprus is a popular destination for holidays, relocation, and investment. The country attracts people with its warm climate and low prices. Additionally, property in Cyprus gives the right to quickly obtain citizenship. It is also profitable to invest in. In 2024, the market is at the stage of growth. There are several investment options, each with its own peculiarities.

Types of property for investment

There are residential and commercial properties in Cyprus. Residential properties include apartments in apartment blocks, cottages, townhouses, and villas. Residential property can be new. Cyprus is actively being developed, and many cities have modern complexes. The secondary residential property market mainly offers apartments. These are often located in favourable locations, such as city centres or historic buildings. Commercial properties include offices, hotels, shops, etc. They vary in location, area, and type. There are mixed-use buildings that contain both commercial and residential premises, as well as entirely non-residential complexes. Each option can be a potentially profitable investment, but it is important to calculate the risks. For example, in addition to purchase costs, you need to consider taxes, stamp duty, and municipality tax. In general, Cyprus has very favourable conditions for buyers. For example, secondary property is not subject to VAT. If the apartment is located in a new residential complex, you will not have to pay for the transfer of ownership.

Investment options

Before you purchase a property in Cyprus, you need to research the market. In addition to buying new apartments, you can engage in the restoration of properties. If the restoration is carried out correctly, the house can be sold for 2-3 times the original value. Even taking into account the cost of restoration, it is profitable. In addition to resale, it is possible to rent out property. For example, residential apartments and villas are sought after by tourists and temporary relocates. Commercial properties can also be bought for rent. Not only large companies open businesses abroad; many specialists from the IT sector have moved to Cyprus to work with European customers. Property in Cyprus by the sea will always be in demand, including among locals. However, you need to choose the right property to invest in.

New buildings

It is better to consider properties at the construction stage. After the property is completed, the cost rises by 40-50%. It is more profitable to buy flats at the very start. However, such properties are bought up very quickly. When buying a new building, the client must pay VAT. The standard rate is 19%. It is possible to apply a preferential rate of 5%. This rate applies if the property is purchased by an individual for permanent residence and will not be used for renting out. The preferential rate applies to the purchase of the first 150 square meters of housing. For large families, the area is increased. In the case of a quick sale or commercial use, the owner will be obliged to pay the difference in VAT rates.

Resale of property

Cyprus legislation allows for the resale of apartments or houses during the construction phase. In this case, it is favourable to buy at the start and sell closer to completion. The difference in price will be about 30%.

Restoration and renovation

If you are interested in property in Cyprus for investment, a good option may be to buy a house for restoration. Properties near the sea are especially sought after. After purchase, the house is restored and resold after a while. The cost of property in Cyprus is low compared to other European countries. The demand for private houses remains high. Villas with designer renovations and non-standard architecture are particularly interesting. Another direction is investing in the restoration of historical buildings. This is not only profitable but also honourable. Participation in restoration can be used for promotional purposes. It is not just about restoring the functionality of a building; it is important to preserve the historical appearance of the property.

Buying property to rent out

It is favourable for investment to buy commercial properties for renting out. These can include private gardens and schools, various shops, beauty salons, and more. Many residents appreciate the walking distance from residential complexes. The cost of the property depends on a combination of factors. Before purchasing, it is necessary to study the infrastructure. For example, for a café or a shop, high footfall is important; otherwise, it will be difficult to find tenants. It is important to take into account the specifics of the neighbourhood. For example, cafes, entertainment venues, bars, various hotels, and hostels are in demand in tourist areas.

What’s the best choice?

Many properties are suitable for investment. Before finalising the transaction, it is necessary to determine the purpose of the purchase. Citizenship of Cyprus for the purchase of real estate is granted if a foreigner purchases a property worth 300,000 euros or more. For passive income, it is better to buy non-residential premises for rent. You can find out more about investing at a Cyprus property agency. The manager will provide details and help you choose a property. There are solutions for different budgets.