Purchase your investment before Cyprus introduces 15% VAT on land sales

After EU accession, Cyprus is no longer just another tourist destination offering sandy beaches and fun. It’s becoming the home, work place, business destination, retirement place for more than half a billion people coming from all over Europe. Furthermore, the government is introducing a 15 % VAT on Cyprus property purchases in accordance with the “acquis communautaire”. All these lead to one and only conclusion - property prices are only going up!

Until now, a foreigner was allowed to buy as much property as she/he wants, but was only allowed to transfer one house or one plot of land up to 4,000 sq.m to her / his own name.

But now most restrictions to foreigner buyers are lifted which will lead to an increase in demand by 50-100% and generate an increase in both sale and rental prices of Cyprus properties. Chris Michael, with his more than 20 years experience in the real estate business, believes that Cyprus property prices could rise by more than 50 %.

“Until now, there was a rush to buy Cyprus property before EU accession and VAT introduction. But freedom of movement after EU, will further increase demand for Cyprus property real estate. Once restrictions are lifted we will have a new wave of buyers coming here to live, work, invest or retire. That’s millions of people coming to a small island with limited land resources!”

All these will for sure increase demand for Cyprus properties. What else could push up the prices even more? VAT is definitely another factor. Cyprus has a transitional period until 2008 before imposing VAT on land but buyers of houses, e.t.c will have to pay the VAT.

Prices will increase gradually, at least by 50 % by 2008. But then we have the possible solution of the Cyprus problem. A solution that could result in certain price stabilization - especially inland residential Cyprus properties. But Cyprus, after all, is only a small island with limited land resources and with the current high demand on Cyprus property, empty land is vanishing fast, especially in prime locations near or on the sea.

The future remains to be seen but what we know for sure is that now the prices of real estate are going up fast and will continue going up even faster for sometime to come.

Always, keep in mind that the best investment are Cyprus villas or Cyprus apartments on or near the beach. Demand for these Cyprus properties is very high, yielding both high resale values and high rental return.