Buy into is­land’s laid-back life­style

Cyprus launches a fast-track process for per­ma­nent res­i­dency through pur­chas­ing prop­erty, writes Michelle Funke

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THIS year has seen a huge in­crease in the num­ber of South Africans buy­ing prop­erty in Cyprus. Cyprus is the third-largest is­land sit­u­ated in the Mediter­ranean and of­fers a cli­mate sim­i­lar to SA along with first class med­i­cal and ed­u­ca­tion fa­cil­i­ties, among other ameni­ties, which is one of the rea­sons why it is a pop­u­lar prop­erty in­vest­ment desti­na­tion.

How­ever, ac­cord­ing to Jenny El­li­nas, MD of lo­cal com­pany Cypriot Realty which has re­lo­cated hun­dreds of South Africans to Cyprus, the main at­trac­tion is the per­ma­nent res­i­dency scheme. “As part of the Euro­pean Union (EU), this scheme is cur­rently the most cost ef­fec­tive com­pared to other EU coun­tries, added to which the per­ma­nent res­i­dency is for life.”

El­li­nas ex­plains that to qual­ify for per­ma­nent res­i­dency on the fast track process, which takes be­tween four and six weeks to ap­prove, the main ap­pli­cant needs to pur­chase a new res­i­den­tial prop­erty for the min­i­mum value of €300,000 + VAT.

“There are also other qual­i­fiers: proof of off­shore in­come, funds re­mit­ted into a fixed de­posit ac­count, and a clean po­lice record, but the main qual­i­fier is the pur­chase of a res­i­den­tial prop­erty.”

For South Africans, the fact that they don’t need to live in Cyprus as there is no min­i­mum stay pe­riod, cou­pled with the fact they can rent out their prop­erty and only need to pay two-thirds on pur­chase, is a big ad­van­tage

While Cyprus has had its share of prob­lems with the eu­ro­zone sit­u­a­tion, a re­cent dis­cov­ery of a large off­shore nat­u­ral gas de­posit sees it back on the road to pros­per­ity. “This gas find has stim­u­lated the Cyprus econ­omy and of­fers ideal op­por­tu­ni­ties for South Africans to open a busi­ness in the min­ing engineering and al­lied sec­tors,” says El­li­nas.

Aside from the per­ma­nent res­i­dency op­por­tu­ni­ties, she says that it’s the ex­cel­lent qual­ity of life and the solid re­turn on in­vest­ment op­por­tu­ni­ties that are driv­ing prop­erty in­vestors to se­ri­ously con­sider Cyprus. One of the rea­sons why in­vestors are look­ing to Cyprus is the ex­cel­lent ap­pre­ci­a­tion of prop­erty due to the de­mand for hol­i­day ac­com­mo­da­tion in its busy tourist lo­ca­tions within walk­ing dis­tance to the beaches, near the prom­e­nade or on a bus route. “Th­ese prop­er­ties are al­ways sought af­ter by in­vestors want­ing to en­joy a solid euro-based in­come for six months of the year.” There is also a high de­mand from for­eign­ers want­ing to re­lo­cate to Cyprus or own a hol­i­day home there.

“As long as there is a cold win­ter in Europe, there is al­ways high de­mand for prop­erty in Cyprus.”

El­li­nas be­lieves the nat­u­ral gas dis­cov­ery in Cyprus’ ex­clu­sive eco­nomic zones will em­ploy thou­sands of for­eign­ers who will ei­ther pur­chase prop­erty or want to rent. In ad­di­tion, be­ing an is­land there is lim­ited space and a lim­ited num­ber of prop­er­ties within a 7km wedge of the sea — where peo­ple can see the sea, smell the sea or be within a short dis­tance from it.

Cyprus also has one of Europe’s low­est per­sonal tax struc­tures, which means that rental in­come earned in Cyprus needs to be in ex­cess of €19,500 nett a year be­fore any tax is due. Buy­ing a prop­erty in a le­gal en­tity is also favourable as Cyprus has the joint-low­est cor­po­rate tax rate in Europe with Ire­land — capped at 12,5%. There is also no in­her­i­tance tax in Cyprus, ad­van­ta­geous for legacy plan­ning.

On a life­style level, Cyprus has a plethora of ac­tiv­i­ties avail­able from golf and hik­ing to sail­ing and bowls. This, cou­pled with its low cost of liv­ing de­spite a volatile ex­change rate and its dou­ble-tax­a­tion treaty with SA, makes it an ideal in­vest­ment node.

When it comes to se­cur­ing fi­nance in Cyprus, El­li­nas says that the banks are ex­tremely conser- va­tive and cau­tious with their lend­ing to ex-pats. But Lep­tos Es­tates — the com­pany Cypriot Realty ex­clu­sively rep­re­sents in Cyprus — of­fers in-house fi­nance: a nine-year term at a fixed rate of 9% a year. They re­quire a min­i­mum 40%-50% de­posit.

“Buy­ing a home over­seas is not only a ma­jor fi­nan­cial and emo­tional com­mit­ment, but a de­ci­sion that can be made eas­ier if you get ad­vice from pro­fes­sion­als. It is rec­om­mended that you al­ways check ex­actly what you are buy­ing be­fore sign­ing any con­tracts — the cost of the trip across to the is­land ini­tially to do the ground­work could save thou­sands in the long run. A new in­vest­ment prop­erty in a new coun­try is the achieve­ment of a life­time and an in­vest­ment in the fu­ture for the next gen­er­a­tion. In Cyprus the op­tions are the best. Liv­ing is laid back and you set your own pace,” El­li­nas con­cludes.

Price:

Vil­las in Ka­mares start from €345,000 Vil­las in Olym­pus start from €545,000

Con­tact:

Cypriot Realty Jenny El­li­nas 083 448 8734

Left: Views of Olym­pus where vil­las start from €545,000. Far left: An ex­clu­sive villa in Ka­mares. Vil­las here are priced from €345,000.

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