In 2008-2014 years Cyprus has experienced a serious crisis, which could result in the collapse of the entire financial system. And yet, the authorities of the country managed to avoid it. That was done to increase the attractiveness of the local real estate market, and how it can take advantage of foreign investors - in our material.
1. It lowered the threshold of entering the program "Citizenship for investment
The most important tool that helped the authorities of Cyprus to bring the country out of the crisis - a program "Citizenship for investment", the easiest and fastest in Europe. Certificates can be obtained in just six months. When she was introduced in the year 2013, the minimum investment amount is € 2,5 million. She is already in demand and brought to the budget of several billion euros. But the government has decided not to stop there and in 2016, the amended program.
The main entrance threshold was reduced to € 2 million. Moreover, this is an investment, not a gratuitous payment, as is the case with Malta's program. After three years of investment can be returned, and passports for all family members will always be with you. The only exception - the property of the investor life should remain residential facility property value of € 500 000 - place of registration in Cyprus.
Where can I invest? In all types of property - residential, commercial, building land. You can buy shares in Cypriot companies, units of investment funds. Authorities have focused on investments in the private sector - to obtain citizenship through the discovery of the deposit in the bank canceled, and through the purchase of government bonds - is capped at € 500 000, the remaining € 1,5 million to be invested in other instruments.
2. Passports can be issued to parents
Another important change in the program "Citizenship for investment" refers to relatives investors. Previously, to obtain a passport, together with the main contender might spouse (s), minor children, and adult children up to 28 years, being cared for, and to 2016 years in the application can also include parents. Those. the program has become really a family - on it is possible to issue citizenship for three generations. And children who are born in a family in the future, will automatically have a second passport, because citizenship is inherited.
It is important to know that if you plan to include in the request of parents, they have to be in the ownership of another residential property value of € 500 000, or shared with the investor of the house, but then - from € 1 000 000.
3. Tax residents «non dom» do not pay taxes on global income
Even in 2015 in Cyprus was introduced status of «non-domiciled tax resident» or «nedomitsilny tax resident" by analogy with the UK. Tax resident of «non dom» exempt from taxes on income derived outside Cyprus. As a foreigner or a citizen of Cyprus, earning money abroad, while living in Cyprus over 183 days or more days than anywhere else, it is exempt from withholding tax on interest from bank deposits and rental income.
The rule does not apply to "indigenous" Cypriots who have domicile in Cyprus, ie They are tax residents of Cyprus 17 20 years of the last.
This benefit has attracted many wealthy foreigners from around the world, including from Russia, CIS, China, Arab countries, and has made Cyprus a very attractive jurisdiction for tax planning income of individuals.
4. Canceled annual property tax
Many countries are tightening the tax system to property owners - the same as Russia, for example - and Cyprus, on the other hand, canceled the annual taxes. On January 1 2017, the owners of all types of housing - apartments, villas, townhouses - should not have to pay Immovable Property Tax (IPT).
Previously, the annual tax in Cyprus accrued value of the property in the year 1980. First, the authorities wanted to tie the estimated value to the market. If these plans are realized, the fees for owners to have increased 2-3 times, an average villa in a million "eat" would be about € 5 000-6 000 year. But this did not happen - the government has decided to support the real estate market and completely abolished this tax.
5. Extended benefit payment «Transfer fee»
Another reason to invest in property in Cyprus - tax exemption on transfer of ownership (Property Transfer Fees), which is paid by the buyer in the transaction. It entered into 2015 year. It was assumed that the tax benefits will be valid until December 31 2016 years, but in July 2016-th authorities decided to extend it.
Therefore, in 2017 year with the purchase of the property, where the VAT paid (new), Transfer Fee never charged, and when buying property in the secondary market, where there is no VAT on the transfer of ownership tax is reduced by half c 8% to 4% . Calculate Transfer Fee size, you can use the official calculator site of the Land of Cyprus Department.
6. The real estate market pushed away from the "bottom"
Since 2009 years Cyprus real estate market is in crisis. During this period prices fell by 30-40%. The decline affected all classes of real estate (from the cheapest to the elite) and all regions of the country.
In 2016-m for the first time in many years in Cyprus recorded a rise in prices, both in residential and commercial sites. Square meter not yet begun to go up quickly - for the year added only a couple of percent. But judging by the dynamics of the number of transactions - and then jump to 43% compared to the year 2015 - the rise in prices is not far off.
I think the best for the customer value for money and we will see in 2017 year, then prices will gradually return to pre-crisis levels.
7. Growing foreign demand and the quality of construction
Foreign buyers in Cyprus are very important. During the boom in the market, for example, in 2007-m, foreigners bought 11 000 objects a year, even more than the locals. During the years of crisis, foreign investors' activity has decreased, but in 2016 year - again, for the first time in a long time - began to grow again.
Much of the demand is increasing due to the government. Interest jumped immediately after the amendment of the program "Citizenship for investment."
In many ways - thanks to the developers. In Cyprus there are many iconic promising projects that are changing the local market for the better - Marina Limassol Marina in Ayia Napa, a few skyscrapers, organized cottage settlements. And in general, the quality of construction has improved. Developers are guided by the more demanding foreigners use the latest technology, the best materials in the finishing. So now, in Cyprus, we see a large selection of quality real estate, and, in different price segments - from € 150 000 to several million.