Holiday Home

The idea of having a second home in Cyprus is appealing, but bear in mind that there with a flight time of four and a half hours from the UK and a two-hour time difference.

On the plus side, a holiday home can provide you with a return in many different ways: it can provide you and your family & friends with rent-free accommodation or a home which you could pass down to your children or relatives (this may realise a capital gains tax)

Buying to let

The holiday letting market is good for the season from around Easter to the end of October and tails off in the winter months. There is also potential for longer-term lets fuelled in part by the property boom. A lot of buyers choose to rent for six months or a year while their house is being built. Bear in mind that with so many properties being built the potential for holiday lettings will ultimately be diluted. Please note there are however no guarantees with letting income.

Investment

Cyprus represents an excellent investment opportunity, looking at current trends. Property prices are increasing dramatically and houses are cheaper than in other sunshine destinations like Mallorca, the Costa Del sol and the Cote d'Azur. If you can spot an up-and-coming area and are prepared to take a risk o nit the spoils can be even greater. Speculative buying and selling can accelerate your path up the property ladder, as can the buying and selling of land if you can get your hands on it, which is not easy). Returns on real estate are currently 5% each year. But-as with all property purchases, property can decrease in value as well as increase.

While the cost of living is still low, prices are rising now that the island is a member of the EU and the rate of VAT in Cyprus has increased to 15% cent. Despite this, Cyprus has not yet fulfilled its tourism potential. With three championship golf courses already built and more planned, as well as government investment in marinas casinos a new airport terminal for Larnaca and road improvements, the island will continue to expand and diversify the tourism industry on which it is so heavily dependent.

Relocation

At the moment, for half the price of a four-bedroom semi in West London you could snap a luxury villa in Cyprus, with a great deal more entertaining space, marble floors, air conditioning, private swimming pool, five or six bedrooms and a decent garden. For under £750,000 you can buy a smart four bedroom property with pool and outdoor space.

Many people who have paid off their UK mortgage are selling up and moving to Cyprus to a better house, with a couple of hundred thousand pounds in the bank. The only places where Cypriot property prices are on a par with the UK are the very rare beach-front properties and on the golf courses, where you pay a huge premium for the views and proximity of the golf course.

So, in general,Cyprus is a good place to start again with an easier life and money in the bank. Relocation is not just something for retirees either. Cyprus has several good English and American schools and a solid education system. Salaries are much lower than in the UK but so is the cost of living. A couple owning a house and a car could comfortably live on CY£350 a month. Brits can work in Cyprus now with relative ease as the island is a member of the EU. More and more young people are moving to the island with their children in search of a more peaceful, carefree life.

Retirement

Retiring to Cyprus is a very popular option for Brits. The low cost of living and tax benefits is attractive to many retirees. Cyprus imposes very low income tax on pensions and has a double taxation treaties with many countries under which retiree's pensions are not subject to withholding tax at source, although husbands and wifes are taxed separately.

Who's Buying in Cyprus?

The British are the largest ex-pat market, and include a large community of British Cypriots who were born and raised in the UK but have decided to go back to their roots for the better quality of life. The largest British community is in Limassol although Paphos and its suburbs are fast catching up.

Advantages to buying a home in Cyprus

• Guaranteed sunshine and high temperatures for most of the year;
• A very low crime rate;
• Low taxation, especially for retirees;
• An excellent duality of life;
• A particularly low cost of living;
• A slow, relaxed pace of life;
• The friendliness and warmth of the Cypriot people;
• 90 % of the Cypriot population speak English.

For Britons, there's the added advantage that Cypriot legal and financial procedures are similar to those in the UK.

Dis-advantages to buying a home in Cyprus

• Unexpected renovation and restoration costs if you buy an old property
• The dangers of buying a property with debts and other problems (if you don't take legal advice);
• Restrictions on letting your property.
• Water shortages in some regions (particularly during the summer);
• The expense and time spent getting to and from Cyprus if you own a home there.