For many years, Cyprus has been synonymous with a comfortable life and attractive opportunities for investors. However, since 2024, the situation in the real estate market has changed, and new challenges have appeared for foreign buyers. These changes require careful attention and careful preparation when planning a deal.
Changes in legislation
In 2024, new norms were introduced in Cyprus, significantly changing the approach to the purchase of real estate by foreign citizens. These changes were a reaction to the growing popularity of the island among foreign investors and the state’s desire for stricter market control.
1. Tightening the conditions for obtaining a residence permit:
- To participate in the investment program, the minimum value of the purchased property has been increased from 300,000 euros to 500,000 euros.
- A mandatory registration fee of 150,000 euros has been introduced, which significantly increases the total cost of participation in the program.
2. Extension of paperwork:
- Previously, the process of obtaining a residence permit took about 2-3 months. Now the deadlines have increased to six months due to the introduction of additional checks.
3. Expanding the tax base:
- New property taxes for foreign nationals make owning property more costly. This includes both purchase tax increases and annual ownership fees.
What risks await buyers?
The introduction of stricter rules and procedures has made the process of purchasing housing more difficult and costly. One of the key difficulties was the increase in the total value of the transaction: the minimum amount for participation in investment programs increased, and additional fees and taxes increased the financial burden on buyers. For many, this has become a serious obstacle, especially for those who focused on the more affordable segment of the market.
Significant tightening of checks also caused delays in paperwork. If earlier the process took only a few months, now the deadlines have almost doubled. Additional checks are aimed at increasing the transparency of transactions, but can be a serious test for those who expect a quick completion of the transaction.
Another important aspect are the restrictions for citizens of a number of countries that fell under international sanctions. This narrowed the circle of potential buyers and made it impossible to purchase real estate for certain categories of investors. At the same time, such measures are aimed at strengthening market stability and preventing illegal financial transactions.
Issues of legal cleanliness of objects require special attention. When buying a home, there is always a risk of stumbling upon objects with encumbrances or hidden problems. Lack of transparency or errors in the verification of documentation can lead to serious financial losses. In the new market conditions, it is especially important to enlist the support of professionals who can minimize risks and protect the interests of the buyer.
Real estate trends
The introduction of new rules in the Cyprus real estate market already has a noticeable impact on its dynamics. One of the main trends was the decline in interest in purchases from mass investors. An increase in the minimum requirements for participation in investment programs and an increase in related costs made the affordable real estate segment less attractive. This is especially palpable for those who saw Cyprus as a place for relatively moderate investments or permanent residence.
Considering such changes, an increasing emphasis has shifted to the premium segment. Buyers willing to meet stricter requirements are more likely to choose luxury housing that meets high quality standards and includes energy efficient solutions. Modern trends in sustainable development, supported by international initiatives, stimulate interest in such facilities, especially among wealthy investors. Luxury real estate attracts not only with its exclusivity, but also with the potential for long-term growth in value.
At the same time, rental is growing in popularity in Cyprus. Many potential buyers, facing the complication of procedures and increased paperwork, prefer to abandon temporarily the purchase of housing. Resort areas, with their constant demand for short-term and long-term rentals, are especially beneficial for those who consider real estate as an investment for rent. This trend confirms that the market is adapting to new conditions, but requires a more thorough approach and balanced decisions from participants.
How to prepare for a purchase
To acquire successfully real estate in Cyprus in the new conditions, it is recommended to take into account the following tips:
- Do a thorough research. Study market features, assess districts, and compare offerings. This will help to avoid overpayments and choose the best option.
- Reach out to professionals. Work with experienced agents and lawyers to help assess all risks and execute the deal in accordance with the law.
- Consider additional expenses. Plan your budget based on taxes, fees, paperwork, and other related costs.
- Check the legal cleanliness of the object. Make sure that the property you are purchasing is free of debt and encumbrances. Due diligence is an important step in the transaction.
Forecasts for the future
Despite the difficulties, the real estate market in Cyprus remains attractive to wealthy investors. Let’s hope for price stabilization and development of the premium segment. In the long term, the new rules could increase deal transparency and improve infrastructure.
Buying real estate in Cyprus in 2024 becomes more difficult and costly for foreign investors. Tightening the conditions for obtaining a residence permit, increasing taxes and fees, as well as additional checks of documents create new challenges. For mass investors, the affordable real estate segment has lost its attractiveness, while the premium market continues to attract wealthy buyers who are ready to meet the new requirements. At the same time, the growing interest in renting real estate confirms the adaptation of the market to changes.
Thus, Cyprus in 2024 is no longer an unconditional “paradise” for all foreign buyers. Investing in properties on the island requires careful preparation, careful market analysis and professional advice. Those who are ready to adapt to new conditions and invest in the premium segment can count on long-term prospects, but a balanced decision and consideration of all risks remain critical.
By Svetlana Unkuri, Head of Sales, Vladis