Buying real estate in Cyprus is a dream of many Russian citizens attracted by the favorable climate, high standard of living, the prospect of obtaining permanent residence permit in Cyprus through investment or citizenship by naturalization.
Before proceeding to the purchase, it is necessary to take into account a number of important points and follow a certain procedure. In this article we will consider the main stages and nuances of the acquisition of real estate in Cyprus by a Russian citizen in 2024.
Studying the real estate market
The first step is a thorough study of the real estate market in Cyprus. It is necessary to determine the type of real estate (apartment, house, villa) and the preferred region. It is also important to assess the investment potential of the object, including its location, proximity to the sea, infrastructure and possible risks.
According to the latest data, real estate sales in Cyprus in 2023 continued to grow rapidly: the island signed 25.4 thousand sales contracts for a total of 5.6 billion euros. At the same time, the average transaction value amounted to 259 thousand euros. Nicosia and Limassol attracted the largest number of buyers, especially among the indigenous population, but Larnaca and Paphos were also popular. Limassol and Larnaca were popular among foreign investors. Experts predict that in the coming year the most interesting from the point of view of investment will continue to be apartments in the middle price segment, and the demand for luxury apartments in skyscrapers is likely to decrease.
Budget planning
In addition to the cost of real estate, you need to consider additional expenses: taxes, fees, commissions, insurance and maintenance of the object. It is important to plan your budget in advance and consider financing options, including the possibility of mortgages in Cyprus for foreigners, which are provided by individual banks.
When buying a new building VAT will be 19%, and in the case of the purchase of a first home for personal use 5% (does not apply to luxury properties and areas over 200 m2). At the same time, many companies provide the possibility of installment payments and allow mortgages. The interest rate on home loans today includes a floating rate of the Central Bank and yet most often a mortgage in Cyprus is a very favorable financial operation with an average rate of 5-7.5%, including the Central Bank rate.
Legal aspects
Buying real estate in Cyprus implies the need to comply with local laws and regulations. It is recommended to seek the services of a qualified lawyer or real estate agency, which will help to verify the legal purity of the object, ownership and the absence of encumbrances. In addition, a third country foreigner will need a permit from the Council of Ministers for the purchase of real estate, waiting for which is 2 months.
Selection and execution of the transaction
After the selection of the object follows the process of negotiation, signing a preliminary contract of sale and advance payment. Then a full due diligence of the property is carried out, the main contract of sale is executed and the remaining amount is transferred. The buyer is obliged to register the transaction in the cadastral office of Cyprus.
Obtaining residence permit or permanent residence
Investments in real estate in Cyprus can open the way to permanent residence through investment programs, the amount of 300 thousand euros and above. It is important to take into account the conditions and requirements of these programs, which may change, and timely submit all necessary documents. Today, investing 300 thousand euros in the economy, you can count on receiving a residence permit for a family, including a spouse and children. For registration of residence permit for parents buy separate real estate from 300 thousand euros or invest this amount in the economy of the island of Aphrodite.
Paying for real estate
In this chapter we will consider various payment options from a bank account to the use of cryptocurrency. It is possible for a Russian citizen to open a bank account abroad, including Cyprus, but the process and requirements may vary depending on the bank and current legal regulations. In 2024, as before, banks are careful to adhere to international standards of transparency and anti-money laundering, which involves thoroughly vetting customers and the sources of their funds.
Basic steps for opening an account in Cyprus by a Russian citizen:
- Choosing a bank and type of account. It is necessary to decide which bank and which type of account (current, savings, multi-currency, etc.) are most suitable for your needs. Most likely, a Russian will be assigned to the international department of a Cypriot bank, even if he works in Cyprus.
- Collection of documents. Usually a passport, proof of residence address (both in Russia and in Cyprus, if available), documents confirming the source of funds, and possibly letters of recommendation from other banks are required.
- Application submission. In some banks you can apply for an account online, in others you may need to be present in person. To avoid wasting time, go online first and try to register.
- In the 2024 environment, it is important to consider the current political environment and the potential restrictions associated with it for Russian citizens.
- Going through the KYC (Know Your Customer) procedure. This involves checking documents, analyzing financial history and assessing the risks associated with a potential customer.
- Making an initial deposit. The amount of the initial deposit depends on the bank and the type of account.
Important aspects:
- The bank's policy towards foreign clients. Some banks may have stricter requirements for Russian citizens or even refuse to serve them amid international sanctions and regulatory restrictions.
- The need for account maintenance and tax compliance. Russian citizens, like all foreign depositors, need to comply with both Cypriot and Russian law in terms of tax deductions and declaration of foreign accounts.
Opening an account in Cyprus can offer Russian citizens a number of advantages, including access to international financial services, investment in foreign real estate and tax planning. However, it is important to choose a bank carefully and be prepared for due diligence and compliance.
Opportunities to sell and buy other real estate in Cyprus
One of the important aspects of real estate investment in Cyprus for Russian citizens in 2024 is the flexibility of investment strategies, including the possibility of selling a previously purchased property and buying another property. This can be a favorable decision for a number of reasons:
- Investment reorientation: the ability to change the investment object according to changing market conditions or personal preferences.
- Home improvement: selling an existing property in order to purchase a better quality or better located property.
- Tax optimization: the ability to take advantage of various tax incentives on the sale and subsequent purchase of real estate, such as capital gains allowances.
- Profit reinvestment: investing the proceeds from the sale in more promising or profitable properties.
The sale and purchase process
The process involves several key steps:
- Appraisal of Value: first, obtain a professional appraisal of the property's current value to determine its market price.
- Advertising and finding a buyer: using real estate agents, online platforms or personal contacts to find buyers.
- Signing a preliminary contract: once a buyer is found, a preliminary contract is signed, fixing the terms of the deal and the deposit.
- Deal formalization: signing of the main contract of sale, re-registration of property rights and fulfillment of all necessary legal procedures.
- Search for a new property: in parallel or after the sale, you can proceed to the selection and purchase of a new property following the same process.
Important points
Tax aspects: it is important to consider the tax obligations associated with the sale of the property, including the 20% tax on capital gains.
Legal aspects: it is advisable to avail the services of professional lawyers and real estate agencies to ensure that the transactions are legally clean.
Financial planning: financial planning and budgeting for all costs associated with the sale and purchase, including taxes, fees and commissions.
The inclusion of the possibility of selling a property and then buying another property makes investing in real estate in Cyprus a flexible and attractive option for many investors, including those from Russia.
How to transfer money from Russia to Cyprus to a buyer of real estate?
In the process of buying real estate in Cyprus by Russian citizens in 2024, it is important to include aspects of international financial transfers, as payment for the purchased object is usually made in euros. The use of specialized payment systems can be an alternative to bank transfers. According to real estate experts, today are also relevant transfers of funds from Russia through Georgia and Kazakhstan, or directly through the Russian branch of Raiffeisen Bank. In this case, the success of the transfer is estimated at 50-50%, that is, alas, not always.
Personal transfers through systems like Western Union or MoneyGram are also possible, but may be suitable only for transferring small amounts due to limits and high commissions. Some sellers of real estate in Cyprus may accept cryptocurrencies as a form of payment. As noted by the experts of the DOM Real Estate Agency, This can be advantageous in terms of speed and cost of the transaction, but it is important to consider the risks associated with the volatility of exchange rates, and the legal aspects of such transactions.
Full list of properties with payment in cryptocurrency.
It is recommended to consult a financial advisor or a lawyer specializing in international transfers and buying property abroad to comply with all requirements and minimize risks.
Buying real estate in Cyprus is a serious step that requires careful preparation and understanding of all the nuances of the process. It is important to carefully approach the selection of the object, assess all the risks and benefits, as well as to ensure the legal security of the transaction. Cooperation with reliable real estate agencies and professional lawyers will help to avoid possible difficulties and make the purchase process as comfortable and safe as possible.
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