Real Estate Sales to Foreigners Fall in Cyprus

January saw a fall in real estate sales to foreigners in Cyprus as the introduction of VAT on land sales was particularly noticed.

A total of 357 sales documents were submitted by foreigners in January, with 107 submitted by Europeans and 250 submitted by non-Europeans. This compares with a total of 387 sales contracts filed in January 2018, of which 90 were by Europeans and 297 by non-Europeans.

In a breakdown of the January 2019 data, most property sales to non-European citizens were in Paphos (101), followed by Limassol (69). For the same period last year, Paphos was again the preferred choice for non-Europeans with 105 sales documents submitted, followed by Limassol with 103.

Property sales to European nationals in January 2019 were higher in Paphos when 56 properties switched hands, with Limassol seeing 16 transactions.

However, real estate specialists in Cyprus do not appear particularly concerned about the fall in overseas property investors, saying that the drop can be explained with the raise in the VAT tax introduced at the beginning of 2018.

A large drop in year-on-year real estate sales was seen in December, due to the high numbers of buyers flocking to buy property in December 2017 to beat the introduction of VAT on land sales.

George Mouskides, President of the Cyprus Real Estate Association (KSIA), confirmed that the decrease in January real estate sales to foreigners was due to the VAT factor, adding that he was not concerned over the issue. He added that one should look at the overall trend of the previous years.

Overall, 2018 saw sales involving foreign buyers reach 4,367 out of a total of 9,242 transactions.

That means 47 per cent of all property purchases in Cyprus in 2018 involved overseas property investors – with Paphos being the most popular location with 40.4 per cent of all sales to foreigners.

It seems Cyprus will long continue to be a favourite for overseas property investors.