Cyprus tax breaks lure expat property purchasers

Published:  4 Aug at 6 PM
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Ever popular with British expats, Cyprus’s appeal isn’t just glorious weather, warm seas and great food, it’s capital gains tax breaks and other government incentives.

The Cypriot government’s plans to attract even more Brits fleeing the UK’s oppressive tax regimes, endless rain and discontented population are centred around ways to make the most of expat savings and investments. Recent legislation allows foreign residents spending more than half a year or more on the island to become tax resident, thus avoiding the local capital gains tax on sold property and only paying UK government tax on gains made post-April 2015.

The property market on the island has been in decline since the 2008 financial meltdown, but local real estate agents are now seeing signs of stabilisation hopefully resulting in growth. London’s Royal Institute of Surveyors reported recently that prices in the 2016 first quarter had increased on last year by 1.5 per cent – not a huge rise but hopefully an indication of things to come. The average cost of a home in the Greek Cypriot sector is around £85,000.

Local people are still cautious about buying a property due to limited access to mortgages and high levels of unemployment. Cypriot property agents report the market is being supported by foreign buyers from the UK and Russia. At the present time, Brexit hasn’t made much of a difference as regards the housing market, although there are fears the fall in sterling may affect the tourism industry.

More good news for those willing to take a post-Brexit chance and bag a bargain home in the sun is the new law cutting property taxes by 75 per cent and abolishing them altogether by the end of next year. For wealthy overseas investors looking for upscale homes, Cypriot passports can be obtained, giving access to the EU. Groups of up to five investors with 12.5 million euros to spare for the purchase of assets such as property, government bonds or a start-up business are welcome, as are individual investors with less than half that amount.
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