Profile: Cyprus . . . which makes it much easier to buy there. You can fly direct from Dublin to upmarket resorts in the Paphos area of southern Cyprus. Michael Jansen looks at the ins and outs of buying a place in the Cyprus sun.
The hills above the birthplace of Aphrodite on Cyprus's foaming shore not far from the coastal resort of Paphos reverberate with the growl of earthmovers, the thwack of wood against golf ball, and the shout of a child diving into a chill pool.
Five star Aphrodite Hills is the island's most exclusive and expensive residential and leisure resort. Ranged round the green sward of an 18-hole golf course, a village centre with shops and restaurants, an elegant health spa and 290-bed Intercontintental hotel are handsome whitewashed villas, townhouses and apartments incorporating local pale golden stone and roofed with pastel pink tiles.
Lanitis Development has placed 650 units on the 578-acre site, 250 villas, in a dozen styles, and 400 townhouses and flats located in four village-type clusters - Helios, Orpheus, Lephyros, and Theseus (under construction).
Prices range downwards from €1.1 million for a three-bedroom villa with pool to €750,000-€900,000 for townhouses and €300,000-€500,000 for apartments. All have spectacular views of the hills and sea and are located in gardens landscaped with native trees and plants.
Above Paphos, next to the traditional village of Tasda, workmen are pouring cement at Olympus and Vikla villas and apartments. The custom built three and four-bedroom villas range in price from €310,000-€430,000, cottages begin at €140,000 and flats at €114,000
The development, located near the Secret Valley golf course, is modelled on the Leptos Estates' flagship project, Kamares village, launched 15 years ago and nearly completed. The 750 units in this project, inhabited by Europeans of different nationalities, have been built in traditional styles with stone, timber, and wood and landscaped with more than a million trees.
At the heart of the village is a club with bar and restaurant,swimming pool, tennis courts, beauty salon and minimarket. In maturity, Kamares village shows how a carefully crafted rural development can fit comfortably into the physical landscape and the cultural context of this ancient island.
At present Paphos has the most vibrant and high-priced real estate market in Cyprus. Evelyn Newman, an Irishwoman working exclusively in Ireland for Palatino Developments, argues that buyers of residential, business and investment properties find better bargains in Limassol and Larnaca where prices and living costs are lower and year-round rentals can be arranged. In Kalogeri, located on a hill above Limas- sol, a two-bed luxury detached villa would cost €300,000 while a two-bed town- house would be €153,000.
One way to survey what is available is to log into the website of the largest advertisers of Cypriot real estate, www.BuySellCyprus.com, which lists 10,000 properties of all types and sells 200 to 300 a month.
Cyprus's European Union entry has facilitated the purchase of a place in the sun. EU membership changed the legal aspects of owning property in Cyprus. Cur- rency regulations have been cancelled, permitting the free flow of funds and allowing companies to buy any number of properties and unrestricted parcels of land.
While individuals are still permitted to purchase only one property or 2,000 sq m (215,278 sq ft) of land, this limitation is set to be dropped in 2007. Younger EU citizens, who can now take up employment, are buying homes, settling down, and sending their children to local and international schools.
Non-Cypriots must still apply to the Council of Ministers to obtain permission to buy, but this is granted almost automatically in three months. Meanwhile the purchaser may renovate or occupy the premises. Once a contract of sale is signed and the deposit paid, the contract is deposited with the land registry and the property cannot be sold, transferred, leased or mortgaged until the new owner receives the title deeds.
This can take months, particularly in resort areas, due to the large number of properties changing hands. Potential buyers must deal with reliable vendors amongst the thousands of property agents and developers operating without much regulation.
Buyers must also make certain that individual title deeds cannot be held up because developers have failed to abide by building regulations or completed work necessary for overall project approval. Transfer fees range from 3-8 per cent depending on the value of the property. Stamp duties must be paid at C£1.50 (€2.57) for every C£1,000 (€1,715) up to C£100,000 (€171,540) and C£2 per £1,000 (€3.43 per €1,715) above that amount.
Immovable property tax up to C£100,000 (€171,540) is nil, and ranges between 2.5-4 per cent for properties valued at C£100,000-£500,000 (€171,540-€858,117). There is no inheritance tax and capital gains from property sales are levied at 20 per cent above C£10,000 (€17,165).
Easter weekend marks the beginning of the tourist-cum-sales season for residential properties but investment properties are now marketed the year round. Mr. Andreas Findiklis of Leptos Estates, which pioneered village-type developments, says that prices can expected to continue to rise because both Europeans and Cypriots are investing heavily in property.
The trend also shows that investors and buyers of permanent homes are overtaking retirees and the purchasers of holiday homes. "Investors have increased dramatically over the past few years, particularly from English-speaking countries. Cyprus is a good place to invest because prices are on average 20-40 per cent lower than in other EU states such as Portugal, Spain, and France."
Cyprus is attractive because it has an extended spring-summer season, lasting from March until November, has a British- model legal system, and can serve as a base for business activities in the Middle East, Africa, and the Gulf. Offshore companies now pay a flat 10 per cent tax on profits. Telecommunications are excellent and air connections are improving.
At present, property sales to foreigners in the breakaway Turkish Cypriot state in the north - which remains outside the EU - have been effectively frozen due to a court case raised by a Greek Cypriot against a British couple who purchased from a Turkish Cypriot land to which the Greek Cypriot had legal title before the 1974 Turkish occupation of the north. On March 17th, parliament in the Cyprus republic passed legislation banning "unlawful use" of Greek Cypriot property in the north and calling for EU arrest warrants for those breaking the law and specifying a sentence of two years imprisonment.
www.BuySellCyprus.com
