If you are considering Larnaca as your first step into the world of property investment, choosing the right property is the key to a steady income. In this blog, we'll take a closer look at why Larnaca is so popular with investors, what the average rent is, what costs you need to consider, and provide a detailed review of five promising residential developments under construction by trusted developers. Ready? Then let's dive into the world of Cyprus property!
So what makes Larnaca so special?
- Location. The south coast of Cyprus is known for its mild climate all year round. Beaches, sea and sunshine attract tourists and expats alike.
- Infrastructure. Shops, restaurants, schools, hospitals - everything is close at hand. The city is ideal for both relaxed family life and holidays.
- Airport. Larnaca International Airport is one of the main airports in Cyprus. It provides a constant flow of visitors, from tourists to business travellers, keeping rental demand high.
- Culture and History. Ancient churches, theatres, an unusual salt lake with pink flamingos, cosy streets of picturesque villages and the city centre add to Larnaca's special charm, which is much appreciated by tenants.
These factors create a constant demand for accommodation, especially in the new modern developments that combine comfort with prestige.
What is the average rental price in Larnaca?
Rent prices in Larnaca depend on the area, the size of the apartment and its condition. According to the latest data for 2024, the average rent for a one-bedroom apartment in Larnaca is between €800 and €1,000 per month, while two-bedroom apartments average between €1,000 and €1,300 per month. These prices reflect a significant increase on previous years, with rents across Cyprus set to rise by almost 19% by 2023 due to the influx of tourists and expats. Despite the overall increase in prices, Larnaca remains more affordable than Limassol, making it an attractive market for investors. In popular areas such as New Marina or the city centre, prices often reach the upper end of the range due to high demand.
Taxes on letting property in Cyprus: all you need to know
1. Income tax:
If you let a property in Cyprus, the income is taxable. The rate is progressive:
- Up to €19,500 per year - 0%.
- €19,501 - €28,000 -20 %
- 28,001 - €36,300 - 25%
- 36,301 - €60,000 - 30%
- Over €60,000 - 35%.
However, it is possible to significantly reduce the tax base by properly declaring and accounting for expenses (maintenance, depreciation, repairs).
2. Contribution to the GESI (health system):
An additional 2.65% of the rental income is levied.
3. VAT (if applicable):
VAT is generally not charged on rents if the property is rented out on a long-term basis to private individuals. Exceptions are commercial properties and daily rentals.
Taxes when buying property in Larnaca
In Larnaca, as in the rest of Cyprus, there is no property tax (similar to the annual property tax). This makes maintaining a property here cheaper than in many countries where such a tax is compulsory. However, when buying a new property (new build), VAT (Value Added Tax) must be taken into account, depending on the purpose of the purchase and the status of the buyer. Here's how it works:
- 19% - standard rate, applies to all new properties.
- 5% - a reduced rate is available if you are buying your first home (you must have lived in the property for at least 10 years). This rate does not normally apply to investors.
Additional costs when buying
In addition to VAT, there may be other one-off costs when buying a property in Larnaca:
- Legal services: usually as a % of the value of the property.
- Agency fees: Depends on terms and conditions (sometimes paid by the developer).
- Stamp duty: Depends on the value of the property:
- Up to €5,000 - 0%.
- Between €5,001 and €170,000 - 0.15%.
- Over €170,000 - 0.2%.
- For example, for a €200,000 apartment: 170,000 × 0.15% + 30,000 × 0.2% = €255 + 60 = €315.
Why is this important to investors?
If you are planning to buy an apartment in Larnaca to rent out, the standard VAT rate of 19% will apply as the purpose of the purchase is investment. This increases the initial investment, but the absence of property tax reduces the ongoing maintenance costs. For example:
- Purchase of an apartment for €180,000 + 19% VAT (€34,200) = €214,200.
- Monthly expenses (utilities, maintenance of the complex) - about 100-150 euros.
- Rental income - 700-1000 euros per month (for a 2-bedroom apartment).
The net yield in this case can be 3-4% per annum, making Larnaca attractive for investors.
Maintenance costs of the property
In order to calculate the real profit, it is important to take into account, at least roughly, the costs of maintaining the property. Here are some typical costs that need to be budgeted for:
- Utilities. Electricity, water, internet - approximately 100-150 euros per month, sometimes much more as electricity is very expensive in Cyprus.
- Maintenance of the complex. Fees for pool maintenance, lift, cleaning of communal areas - 50 to 150 euros per month or more, depending on the level of the development.
- Insurance. Approximately 200-300 euros per year to protect against unforeseen situations.
These costs must be deducted from the rental income to make a net profit. We will take this into account in the calculations for each project.
Promising projects in Larnaca
We have selected five under construction residential developments that are ideal for investment and rental. We have highlighted the benefits of each and calculated the profitability of each apartment.
1. Mariana Residence - Yield ≈ 4.2% per annum
District: Vergina (close to the business centre of the city).
Flat type: 2 bedroom penthouse, 141 m2
Cost: 245 000 euros + 19% VAT (46 550 euros) = 291 550 euros
Expected rent: 1,200 euros/month
Maintenance costs: 180 euros/month
Net income: 1,020 euros/month
Annual yield: (1,020 × 12) / 291,550 × 100% ≈ 4.2%.
Why choose?
Mariana Residence is a modern, turnkey residential complex located 5km from the marina and the beach. Quality interiors, large panoramic windows, spacious terraces. There are schools, shops, cafes nearby and the area is undergoing active development. One of Larnaca's leading public schools will soon be located nearby. The largest shopping centre, Metropolis, is within walking distance. The property offers investors not only a good yield but also the prospect of capital appreciation. Ideal for long term rental.
All property options in Mariana Residence development
2. Marina Home Residences 3 - Yield ≈ 3.44% per annum
- Neighbourhood: New Marina (800m from the sea)
- Apartment type: 2 bedroom apartment, 102 m2
- Cost: 220 000 euros + VAT (41 800 euros) = 261 800 euros
- Expected rent: 900 euros/month
- Maintenance costs: 150 euros/month
- Net income: 750 euros/month
- Annual yield: (750 × 12) / 261 800 × 100% ≈ 3.44%.
What makes it special?
Marina Home Residences is a modern planned development located just 800 metres from the sea in the prestigious New Marina area. The project is located in the Land of Tomorrow waterfront redevelopment area. A future yacht marina and pedestrian promenade are key benefits. High demand from tenants, particularly expatriate professionals, will provide a steady income stream. This complex is a dream for those who appreciate comfort, ready infrastructure and proximity to the water, and tenants will definitely appreciate it. Want to wake up to the sound of the waves?
All property options at Marina Home Residences
3. Starlight - Yield ≈ 3.16% p.a.
Area: Chrysopolitissa (Central Larnaca)
Flat type: 2 bedroom flat, 98m2
Cost: €230,000 + VAT (€43,700) = €273,700
Expected rent: 850 euros/month
Maintenance costs: 130 euros/month
Net income: 720 euros/month
Annual yield: (720 × 12) / 273,700 × 100% ≈ 3.16%.
What attracts tenants?
Starlight is within walking distance of Finikoudes beach, the old town, restaurants and shops. It is the perfect solution for those who want to live in the heart of the city. The stylish design and quality of construction make the apartments attractive both for tenants and for future resale. The complex is surrounded by life - beaches, shops and cafes are within walking distance and in the evenings the lights of the city create an atmosphere of comfort and luxury. This is a place for those who want to live in the sunshine, and tenants are happy to pay for the experience.
All property options in the Starlight development
4. Aphrodite House - Yield ≈ 2.86% per annum
Area: Spiros Kiprianou (City Centre)
Flat type: 1-bedroom apartment, 70 m2
Cost: 187 000 euros + VAT (35 530 euros) = 222 530 euros
Expected rent: 650 euros/month
Maintenance costs: 120 euros/month
Net income: 530 euros/month
Annual return: (530 × 12) / 222,530 × 100% ≈ 2.86%.
What is important to know about this project?
Imagine a place where history and modernity come together. A complex with sophisticated infrastructure and modern design, surrounded by offices and educational institutions. Here you will find stylish apartments with spacious balconies overlooking the city and a thoughtful layout that allows you to enjoy every metre of space. Ideal for young couples, students and expatriate professionals. The complex is surrounded by shops, schools and restaurants, and convenient access to the motorway makes travelling around the island easy and enjoyable. It's a place you want to live - and that's why it's so popular with tenants. The attractive entry price and high demand make this a truly solid investment.
All property options in the Aphrodite House development
5. Synergy - yield ≈ 1.65% per annum
Area: Oroklini (an elite suburb of Larnaca, 300 metres from the beach).
Apartment type: 3 bedroom, 172 m2
Price: €715,000 + VAT (€135,850) = €850,850
Expected rent: €1,300/month
Maintenance costs: 130 euros/month
Net income: €1,170/month
Annual yield: (1,170 × 12) / 850 850 × 100% ≈ 1.65%.
Who is this complex for?
Synergy is an oasis of tranquillity and eco-friendliness in Larnaca. The low-rise, gated complex is located in a quiet neighbourhood but with easy access to the main roads. Synergy is targeted at long-term rentals to an affluent clientele. Bold architectural solutions, ecological materials, privacy and comfort. The apartments are designed for a measured life - bright, comfortable, with thoughtful details. An ideal choice for those seeking comfort away from the hustle and bustle, but with city infrastructure at their fingertips. Suitable for families working remotely or moving to Cyprus permanently.
All property options in the Synergy development
Buying a rental property in Larnaca is not just an investment, but an opportunity to enter a promising market with yields of 1.6-4.5% per annum and higher. At the same time, inflation in the country has fallen to 2.5%, according to data from the beginning of the year. Projects such as Aphrodite House, Marina Home Residences, Starlight, Mariana Residence and Synergy offer modern solutions for comfortable living and stable income. Larnaca is waiting for you - choose your project and invest in the future today!
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