Cyprus is the latest country trying to entice foreign investors to purchase property within its borders. The island is offering a combination of financial incentives and the possibility of obtaining an EU passport. The Wall Street Journal reported that the recently planned government initiatives include tax breaks for homeowners and half-price title deeds in addition to the passport scheme.
The country, which is known for nice beaches and pleasant weather, can offer those buying property in the country the ability to obtain a Cypriot passport which offers access to the EU. However, these are only available to investors who meet minimum spending requirements. The newspaper noted that individual buyers spending at least USD5.5 million are eligible to apply for a passport. In addition to this, groups of up to five people investing USD13.72 million on property, a company or government bonds can receive passports for USD3.43 million each.
In an attempt to stabilize the country’s economy, the government enacted a temporary program that cut the cost of title-deed transfers in half as well as significantly reducing property taxes. According to the WSJ, a title transfer on a USD1 million property sale is currently USD40,065, reduced from the USD80,132 it would have cost two years ago.
However, home sales and prices in Cyprus have not yet recovered to their 2008 pre-financial crisis levels despite these measures. London-based Royal Institute of Chartered Surveyors told the newspaper that there are signs of stabilization in the country which could be a sign that the new measures are working.
During the first quarter of this year, house prices increased 1.5 percent y-o-y in Cyprus while condominium prices were up 1.2 percent during the same period. The Greek-Cypriot side of the island is the most popular area for expats with a majority of foreign owners coming from the UK and Russia. The average home price here is currently near USD110,000.
