2016 sees burst of property buying in Cyprus
The property market has gone a bit mad in Cyprus, with huge increases in property transactions including a 50 percent rise in sales to foreign buyers.
The Department of Land and Surveys in Cyprus has announced a 46 percent on-the-year increase in property transactions in November in 2016. Paphos and Limassol led the rise with a surge of activity in both regions – an 82 percent increase in the past year in Limassol and Paphos, to 249 in total.
Up in the Nicosia, the number of property transactions rose 43 percent to 86 while in Larnaca they increased 3 percent to 114. Famagusta saw a drop of 42 percent, but with only 19 transactions that data is less significant.
The number of foreign buyers has increased in 2016 by 54 percent
Overall, the island has seen a rise in property transactions throughout 2016. From January to November the total number rose 34 percent to 5,929.
Part of the increase can be attributed to banks acquiring assets as part of restructuring contracts with borrowers, coupled with a rise in external demand. The number of foreign buyers has seen an increase in 2016 with a 54 percent rise year-on-year to 831.
Crackdown on golden visas
Meanwhile, a scheme that sees non-EU investors granted residency rights or passports according to the figure of the investment has been under fire. The Cyprus Investment Promotion Agency said that foreign investors brought €2 billion to the island in 2015.
But the Interior Ministry has blasted irregularities in practices connected to the scheme. Certain businesses and individuals have been taking advantage of the investment-for-citizenship scheme (known as a “golden visa”) by promising wealthy home buyers and business people passports. According to local news reports, some investors have complained about being offered a fast-track to a Cyprus passport from businesses claiming to have links to decision-makers in the ministry. The fee for the service? €800,000.
The scheme is attractive to investors wishing to gain a gateway to the EU for business, education or personal reasons.
The criticism has come as the Organisation of Economic Cooperation and Development (OECD) has pledged that such residence-by-investment schemes will not deter their efforts at clamping down on tax dodgers. Such schemes are also run in Malta and the Caribbean.
Golden visas hold out hope for many Brits who have set their sights on Cyprus but are not ready to make the move yet.
In addition to providing permanent residency to non-EU nationals who buy a property worth more than €300,000, it also offers incentives like exemption from the special defence levy on interest, dividends and rent, to individuals who are tax registered in Cyprus. The island also has a reduced-taxation scheme in place. The island recently extended from five to ten years a 50 percent exemption for non-domiciled tax residents earning more than €100,000 annually.
With the possibility of restrictions on British buyers in Cyprus post-Brexit, golden visas hold out hope for many who have set their sights on Cyprus but are not ready to make the move yet.