FREQUENTLY ASKED QUESTIONS

Orange RE provides answers to many questions related to buying a property in Cyprus. To make life easier we have recorded the most commonly asked questions and provided brief and clear answers.

CYPRUS RELATED QUESTIONS

Q: CAN FOREIGN NATIONALS OWN PROPERTY IN CYPRUS?

A: In southern Cyprus, foreign ownership is unrestricted and the purchase procedure is as straightforward as in any other EU country.
 

Q: WHAT IS THE GOVERNMENTAL STRUCTURE IN CYPRUS?

A: Cyprus is an independent and sovereign republic with the elected president (5 year election cycle) as head of country. The legislative power lies with the elected House of Representatives and appointed council of ministers. The legal system is based on the British/European system with independent power exercised by judiciary. Cyprus is a member of the EU, the UN, the British Commonwealth, the non-aligned movement, World Bank and IMF.

Q:  WHY SHOULD I CHOOSE CYPRUS?

A: The reasons are as follows:

	The property market is one of the fastest growing in the European Union. Prices in some areas are increasing by an annual average of 20%.
	Property prices are still lower than in many other European countries.
	Increase in the number of golf properties available. Golf property prices fetch up to 40% more.
	Comparatively low tax rate, including a Double Tax Treaty with southern Cyprus and the UK.
	Capital Gains Tax of only 20% and Corporation Tax for Cypriot limited companies (through which you can own your property) at only 10%.
	UK pensions can be received tax free in Cyprus.
	Foreign residents permanently residing in Cyprus pay only a 5% flat rate of income tax.
	320 days of sunshine a year make it a comfortable and enjoyable place to live.
	High standard of living, with good facilities, including top class golf courses.
	Low cost of living.
	Comparatively low crime rate and friendly people.
	Excellent medical facilities, education and offshore business advantages.
	Tourism is predicted to grow by 4.6% over the next 10 years, contributing some 13.9% to the country's GDP by 2014.
	British based legal system, where English-speaking lawyers abound.
	British based banking system in southern Cyprus, making choosing mortgages and managing your money similar to ‘back home’.
	From the 1st January 2008 Cyprus will adopt the euro as its currency.
	Northern Cyprus is set to join the EU when Turkey meets the requirements.
	Very efficient land registry with straightforward and well administered procedures.

Q: WHAT IS THE ECONOMIC AND POLITICAL SITUATION?

A:  Since 1974, Cyprus has been divided into the government-controlled southern two thirds of the island and the remaining one third in the northern part, administered by Turkish-Cypriots. This governs the economic and political situation of the island. Shortly after founding the Republic, serious differences arose between the two communities about the implementation and interpretation of the new constitution. The Greek Cypriots argued that Turkish Cypriot interests were obstacles the efficient running of their government. Since a military coup in 1974, UN peacekeeping forces have maintained a buffer zone between the two sides. Apart from the occasional demonstration or incidents between soldiers, the island has remained completely free of violent conflict. Today, North Cyprus will need to reach political settlement with the south and Turkey will need to resolve the North Cyprus situation in order to enter the EU.

Q: HOW DO WE TRAVEL TO CYPRUS?

A: Travellers arriving in the Republic of Cyprus may enter the Republic only through the legal ports of entry: Larnaca and Paphos International Airports, or the ports of Larnaca, Lemesos (Limassol), and Paphos.

Q: CAN I STILL RECEIVE MY PENSIONS OR BENEFIT IF I LIVE IN CYPRUS?

A: Your UK/ROI retirement pension or other benefits can be paid directly into your bank account at home or abroad. For further information, visit the following websites:

                    UK - www.dss.gov.uk

                    ROI - www.welfare.ie

Q: WHAT ABOUT HEALTHCARE?

A: The healthcare in Cyprus is extremely efficient and available to all EU residents. As a British or Irish resident, you are entitled to get healthcare through the public system in countries of the European Union (EU), European Economic Area (EEA) or Switzerland if you become ill or injured while on a temporary stay there.

Until now, you needed an E form - such as the E111 or the E128 - to get such treatment. Now, these paper forms are being replaced by the European Health Insurance Card. One card is needed for each individual or member of the family. For more information, go to:

                    UK - www.dh.gov.uk

                    ROI - www.ehic.ie

Although there is no national health service as such in Cyprus, the cost of medical treatment in governmental hospitals is very low. Those wishing to consult medical experts privately will find a wide choice of competent doctors, specialists and surgeons practicing on the island. The minimum charge for a private consultation is approximately €17 (CYP10).

The standard of medical treatment provided to citizens is high and continuously improving. Additionally, a number of companies offer medical insurance schemes that cover excellent and immediate healthcare.

Diverse schemes are tailored to individual needs and budgets, and can cover hospitalisation at the hospital or clinic of your choice, outpatient consultations and drugs, and even nursing care at home.

Q: ARE MORTGAGES EASILY AVAILABLE?

A: Cyprus is an ideal place for a home, or second residence, and you can now obtain a mortgage here. 70% mortgages are now available in any currency. Getting a mortgage in CYP can be expensive, so you should compare this rate with the Euro and sterling rate to see which offers the best deal.

Euro mortgages have only been available in Cyprus since February 2005, and often offer the best value for money.

PROPERTY RELATED QUESTIONS

 Q: SHOULD I USE A SOLICITOR BACK HOME?

A: It is not necessary, as your lawyer would still have to use a local Cypriot lawyer, and therefore you could be liable for two legal bills! All communication from your Cypriot lawyer will be in English, so do not worry about understanding legal documents

Q: WHEN DO I HAVE TO PAY STAMP DUTY AND HOW MUCH CAN I EXPECT TO PAY?

A: Stamp duty is due at the time of signing the contract. This is levied at the rate of €2.55 (CYP1.50) per €1700 (CYP1,000) up to €170,000 (CYP100,000) and thereafter at the rate of €3.4 (CYP2) per €1700 (CYP1000). The purchase contract must be stamped within 30 days of its dated signature or a fine will be imposed.

Q:  ARE THERE ANY TAX ADVANTAGES?

A: Non Greek-Cypriot individuals residing in Cyprus pay income tax at a flat rate of just 5%. This applies to the amounts remitted to Cyprus from pensions or income from overseas investments. The first €3400 (CYP 2,000) per annum are tax exempt, if you are retired. Personal effects, household goods and furniture may be imported duty free by immigrant retirees, provided that they are for personal use and have been in use for some time (approximately one year). There is no duty on one car and retired couples benefit from the additional concession of two duty free cars.

Q: I AM BUYING A NEW PROPERTY, WILL I BE ABLE TO INSPECT IT BEFORE I COMPLETE?

A: Of course. With a new property, you will be asked to inspect the property with your dedicated after-sales consultant. Then you can confirm everything is to your satisfaction and outline anything that may need to be attended to by the builder, just as you would back home.

Q:  QUESTION: WHAT ABOUT HEALTHCARE?

A: The healthcare in Cyprus is extremely efficient and available to all EU residents. As a British or Irish resident, you are entitled to get healthcare through the public system in countries of the European Union (EU), European Economic Area (EEA) or Switzerland if you become ill or injured while on a temporary stay there.

Until now, you needed an E form - such as the E111 or the E128 - to get such treatment. Now, these paper forms are being replaced by the European Health Insurance Card. One card is needed for each individual or member of the family. For more information, go to:

                    UK - www.dh.gov.uk

                    ROI - www.ehic.ie

Although there is no national health service as such in Cyprus, the cost of medical treatment in governmental hospitals is very low. Those wishing to consult medical experts privately will find a wide choice of competent doctors, specialists and surgeons practicing on the island. The minimum charge for a private consultation is approximately €17 (CYP10)

The standard of medical treatment provided to citizens is high and continuously improving. Additionally, a number of companies offer medical insurance schemes that cover excellent and immediate healthcare.

VALUATION QUESTIONS

Q: WHAT IS THE MARKET VALUE (MV)?

A: Market value is the price at which your property finally sells. Orange utilise their area experience in conjunction with comparable properties (active and sold) to come to a figure that they believe will be the price at which your home sells. Having a time of sale valuation on your home prior to selling, in today’s market, is one way to check that you are not overpricing your home for sale. However, sellers should not utilise the estimated value as an indicator of what price the home will ultimately be sold.

Q: HOW CAN I HAVE MY RESIDENTIAL PROPERTY BE VALUED?

A: A comparative market analysis is the standard methods for determining a house value.
Orange RE will be happy to provide a comparative market analysis, an informal estimate of value based on comparable sales in the area. Be sure you get listing prices of current homes on the market as well as those that have sold. You also can research this yourself by checking on recent sales in public records. Be sure that you are researching properties that are similar in size, construction and location. A valuation, which generally costs €200 to €300 to perform, is a charted surveyors’ opinion of the value of a property at any given time. Valuers review numerous factors including recent comparable sales, location, square meters and construction quality.

Q: HOW MUCH A PROPERTY IS WORTH?

A:  A house ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property’s value, most people turn to either an appraisal or a comparative market analysis.

Q: WHAT IS THE RETURN ON NEW VERSUS PREVIOUSLY OWNED HOMES?

A: Buying into a new-home community may seem riskier than purchasing a house in an established neighbourhood, but any increase in home value depends upon the same factors: quality of the neighbourhood, growth in the local housing market and the state of the overall economy.

Q: WHAT IS THE DIFFERENCE BETWEEN LIST PRICE, SALES PRICE AND APPRAISED VALUE?

A: The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area.

The sales price is the amount of money you as a buyer would pay for a property.

The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.