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If you’re in the market for a secure and robust property investment, then doing your research will lead you straight to a Cyprus investment property. There are numerous factors to consider when investing in property, including capital growth, mortgage rates, rental potential, accessibility, and of course, the weather. In this article, I will discuss why I believe Southern Cyprus presents an excellent opportunity for property investment. Conversely, I will address why I consider Northern Cyprus to be a risky investment in a future article!

The Weather

Cyprus boasts approximately 340 days of sunshine per year, making it an ideal destination for tourists and locals alike who enjoy basking in the sun. Even when neighboring countries experience cold weather, Cyprus remains warm and sunny. For those aiming to rent out their property, having a year-round rental season is a significant advantage, particularly with an increasing number of vacationers seeking winter sun.

The Law and Taxes

Cyprus is an island heavily influenced by British culture, having adopted many elements of English common law. Not only are the laws highly similar to those of the UK, but the locals also possess a strong command of English as their second language. Consequently, a large number of British buyers opt to acquire properties in Cyprus for retirement purposes. While there is still a considerable influx of second-home buyers and investors, the low taxes serve as a great incentive for permanent residence and investment. In fact, inheritance tax stands at 0%, with UK pensions taxed at a mere 5%.

The European Union (EU)

Membership in the EU greatly piqued the interest of property investors in the Cyprus market. Furthermore, the implementation of a new VAT rate of 20% on new build properties without planning permission, in addition to the previous 0% VAT rate, led to a significant influx of investors.

Starting from January 1st, 2008, Cyprus will also adopt the Euro as its single currency. These changes in Cyprus’ investment property market will undoubtedly ensure long-term security for your hard-earned money.

A Shortage of Land for Developers

Developers face a scarcity of land to build on in Cyprus, and rigorous planning laws dictate the height and density of new developments. In the medium term, the quantity of new builds will decrease while the number of re-sales increases. This trend indicates that entering the market early should yield substantial capital gains within a span of 5+ years.

Budget Airlines

This year witnessed the launch of the first budget flights from the UK to Cyprus, signaling a strong and predictable growth for travelers. Once again, this development can only benefit the buy-to-let market if your primary goal in Cyprus is a property investment.

Banks and Mortgages

Securing a mortgage in Cyprus is relatively straightforward, and with mortgage rates in line with those of the EU, it has become an excellent place to arrange your mortgage. Mortgage terms can extend up to 90% of the loan-to-value (LTV) ratio, with repayment periods of up to 30 years.

Short Term or Long Term?

I believe that the short-term “buy to sell” market has cooled down due to the abundance of ongoing developments and the intense competition among developers. This could potentially give rise to uncertain and unpredictable turbulence in the coming years. However, this also means that you can still find great deals if you thoroughly research before visiting Cyprus. When it comes to medium to long-term investments in Cyprus property, Southern Cyprus stands out as an incredibly safe and attractive market. Few destinations boast the same level of security and allure as this sun-drenched paradise.

As for specific areas of Cyprus and the various property types suitable for investment, this will be covered in a separate article.

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Ihab Salloum