Update on the Property Market in Cyprus

Things are a-changin’ in Cyprus at the moment – in case you hadn’t noticed!  There’s a new president in the Republic of Cyprus, a new border crossing on Ledra Street and a new commitment to finding some form of workable solution to the stalemate between the two sides of the island and potential changes to the property market in Cyprus.

The Republic of Cyprus is being ‘encouraged’ to bring all laws in line with EU internal directives and it has successfully adopted the euro as its national currency.  All of these aspects of change have had an impact on real estate in Cyprus and so we thought we’d bring you a timely update on the property market in Cyprus…

The first thing you need to know is that buyers have been complaining that the real price of property in Cyprus saw an overnight hike when the euro was introduced.  This effectively ramped up the price on top of the natural ramping that was occurring thanks to the whole supply demand situation in Cyprus!

Depending on who you speak to, this has had no negative effect on the market at all, (estate agents’ opinion), or it has added to the problem for the property market in Cyprus which is further affected by the global economic situation, a lessening of available credit and a reduction in the numbers of Britons being able to afford to buy in what is traditionally a very popular location with British second home and retirement property purchasers, (pretty much everyone else’s opinion).

Naturally the Cypriot property market can weather a storm because of the intrinsic desire that so many people have to own property on what is quite possibly one of the most fabulous islands in the Med.  But even so, the price that properties have reached seems to be untenable…

In other news, there are calls for a complete overhaul of outdated rental laws which see tenants’ rights upheld above all others, and which do not meet with the EU norm – and there are also calls for a complete overhaul of the property taxation system…

The rental laws in Cyprus for pre-1995 properties are very heavily weighted in the tenant’s favour – and that’s an understatement!  For a landlord to be able to evict a tenant they must have failed to pay the rent for an awfully long time or the landlord must be able to prove that he is basically homeless himself and therefore needs the property.  The Cypriot International Property Owners’ Union has highlighted to the government the fact that current rental controls and rules and laws go completely against EU directives and has suggested that, as was the case in Greece, rules be steadily and carefully changed and brought up to date.

The Cypriot International Property Owners’ Union together with the Cypriot Property Owners Association have been holding a seminar in which they also discussed property market in Cyprus and property taxation – which is high compared to the EU average.  According to the conclusions of the seminar, Cyprus could give its struggling property market a much needed boost during these times of global economic belt tightening if taxes were reassessed.  President of the Cypriot Property Owners Association George Strovolides said in a statement following the seminar: 
“capital gains tax co-efficient should be decreased, while land tax and transference fees ought to be abolished.”  Let’s hope the government agrees.

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