Money-saving tips for property buyers in Cyprus

Can you buy a property in Cyprus without breaking the bank? Yes, you can. With stunning Mediterranean island homes available from well under €100,000, Cyprus remains one of the most affordable property hotspots in southern Europe.

Even so, there are still ways of making it even more affordable. And when buying in an unfamiliar market with a foreign legal system and currency, it’s easy to pay more than you need to.

Here we offer some tips on keeping your costs down when buying property in Cyprus.

Affordable Cyprus villas are in reach.

Research Cyprus property tax

There are some costs in the Cyprus property buying process that are simply unavoidable. These fees often be up to 10% on top of your property price. Accounting for these costs from the get-go will help you stay within budget when buying a property in Cyprus. So, if your budget is €200,000, assume you cannot pay more than €185,000 for the property.

Fees can often add up to 10% on top of your property price

For resale homes, property transfer tax varies between 3% and 8% and is calculated on the purchase price or market value of the property. It rises in bands – so buying a cheaper property means you pay a lower rate as well as a lower total amount.

Beware Value Added Tax. VAT is imposed on most new properties at a rate of 5%, but it is easy to be caught out by certain rules on the size and value of the property and end up paying 19%. Take a bit of time to understand Cypriot property tax.

Stamp duty is also dependent on the value of the property transaction and the rates vary between 0-0.2%.

Understand lawyer and agency fees

It’s important to spend time finding a Cypriot property lawyer. On top of your purchase fees, your lawyer fees can vary between 1-2% of your property price, however this varies depending on the complexity of the purchase and hence the seniority of the lawyer involved. For an accurate quote, speak to your lawyer for an estimation of costs beforehand.

The estate agent’s fee is paid for by the seller. However, while it can add costs initially, using a buyer’s agent or property finder can be beneficial in getting a property at a fair price in the first place. Another way to get the best price is use a Cypriot mortgage broker.

If you’re at the start of your search and would like a little more information, here’s how to get a mortgage in Cyprus as an international buyer.

Do your research to get the best price

Negotiating the best price

When it comes to making an offer on a property you like, you will make an offer to your estate agent who will take your offer to the seller. While there’s no secret to getting a big discount, there are things you can do that may help you be better equipped to negotiate a better price.

1. Research the market: Having a clear picture of current market trends and prices of properties nearby will give you a solid foundation for your negotiations.
2. Set your priorities: Determine your non-negotiables, such as budget, distance to schools and amenities, then decide what you could do without. Understanding these priorities will help you stay focused.
3. Highlight strengths and weaknesses: Emphasise the strengths of your offer, e.g. are you buying in cash, will you close quickly? You can also be prepared to discuss any weaknesses in the property to justify a lower offer, e.g. are any renovations required?
4. Consider timings: Sometimes, the timing of your offer can make all the difference. Sellers may be more open to negotiations during off-peak seasons or if the property has been on the market for a while.
5. Be objective: If you’re able to present comparable sales data, this could support your offer. It can also help make you case more compelling and less emotional.

Currency exchange and transfers

If your home currency differs from the euro, you’ll need to consider the exchange rate to be able to purchase a property in Cyprus, which will be advertised in euros.

What a lot of people forget is that currency markets fluctuate not just by the hour but by the minute. Once you’ve agreed on a price in euros, there’s still a possibility that what you’ll pay in your home currency will fluctuate before you sign the final contract.

It’s not uncommon for rates to sway between 5% and 10% in a three-month period. There are strategies in place to protect your budget, like a forward contract, but being aware of this possibility and your options will help you remain on track throughout your property purchase.

To lock in your exchange rate today, speak to our partners at Smart Currency Exchange.