CYPRUS'S GOLDEN VISA SCHEME - applications are booming as Brits swap EU passports

Sunday Times 18 August 2019 - article by Hugh Graham

Lefkara

Estate agents have been hoping for a “Boris bounce” to kick-start the moribund property market in this country, but the only place that seems to be benefiting from our new prime minister seems to be Cyprus.

Five hundred Cypriot passports have been granted to Brits this year, according to a report on the expat news website in-cyprus.com, which noted a spike in applications since Boris Johnson moved into Downing Street in July. As only 700 passports are granted by the Mediterranean island each year, it seems three-quarters of them could be going to Britons.

Of all the “golden visa” schemes on offer in the EU, Cyprus’s Citizenship by Investment model is the easiest — if you can afford it. Anyone who spends €2m (£1.83m) on a new-build home — or €2.5m on resale property — and donates €150,000 to the government qualifies for citizenship, which takes six months to acquire. Terms and conditions apply: investor citizens have to hang onto their property for at least five years, and if they sell after that time, they must buy another home worth at least €500,000 to keep their passport.

Or, if you can’t afford €2m, you can buy a property for €300,000, and gain permanent residency, which is extended to parents and children. This typically takes 60 days, and you don’t have to live there — just visit once every two years. After seven years, you can apply for citizenship. If you want the tax advantages of residency — the first €19,500 of income is tax-free and foreign pensions are taxed at 5%, with the first €3,420 tax-free — you have to spend at least 183 days a year there (or 60 days if you carry out a business and maintain a permanent residence).

“There has definitely been more interest from UK buyers since the Brexit vote,” says Paris Gabriel, general manager of Leptos Estates, the largest developer in Cyprus, who says interest is not just from retirees any more, but also from young families.

“In the past month or so there has been a rise in interest in acquiring residency and citizenship. Some of it has been from Brits already living in Cyprus, but also from business executives, City people in financial services, who are in favour of remain.”

He says the rest of the golden visa buyers are evenly divided between former Soviet countries, the Middle and Far East, and, lately, a wave of South Africans. “It’s a fusion of civilisations, and everyone feels very comfortable. It’s Mediterranean, so everything is a bit more relaxed.”

The Brits and South Africans tend to congregate in Paphos, in the southwest, which has a population of 36,000. A 90-minute drive from Larnaca airport, and 45 minutes from the bustle and bling of Limassol, Paphos has forested hills, a coastal national park and an Anglo feel. Cyprus was a British colony from 1914 to 1960, and traffic drives on the left. Of the island’s 850,000 population, about 70,000 are Brits, at least for part of the year.

Konnos Bay, near Protaras

As well as three international schools, Paphos has two Lidl supermarkets, and you can find Branston pickle, Marmite and Sainsbury’s and Tesco products in other stores. The shopping mall has a Marks & Spencer. And there are the required chip shops and pubs, where Cypriots join the Brits to watch football. The cost of living is generally low: you could have a three-course meal in a decent restaurant for €20, Gabriel says. A good three-bedroom home with a pool in Paphos starts at €300,000; a two-bedroom flat in a block with a gym and a pool would cost about €250,000. If you let on Airbnb-type sites, expect yields of 5%.

In the property crash of 2010, prices fell by about 20%. Values have come back since, and are now about 10% below the 2010 peak, and slowly rising, says Antonis Loizou, whose firm (aloizou.com.cy) is one of the island’s largest estate agencies. “Paphos is like the Algarve, but more British buyers are discovering Protaras, on the eastern side, which has the best beaches,” he says. “It’s having a large-scale expansion — they’re building two marinas there.” Here you can find three-bedroom villas with pools on the market for €500,000, but the town is sleepy in winter.

The mountain village of Omodos, inland from Limassol

Most golden visa buyers, particularly Russians and Middle Easterners, prefer Limassol (population 100,000), where skyscrapers are shooting up — some as high as 40 storeys — and a casino is pulling in the usual suspects. Limassol could soon be awash with even more money, when natural gas production from the Aphrodite field begins in 2024. ExxonMobil discovered another vast reserve off the coast of Cyprus in February.

Nicosia, Cyprus’s largest city (200,000), was traditionally the home of business (law firms and accountants). But it’s inland, on the border with Northern Cyprus. Peace talks to resolve the long-running dispute between Greece and Turkey and help reunify the island’s divided populations resumed earlier this month. “There is some hope,” Gabriel says. “Some Greeks are now moving to the north, and many Turkish Cypriots come south to shop or use the international schools. People are now more ready to accept a solution. It will not be long. All we need is some courage from the leaders.”

If that happens, Cyprus has the potential to rise further — with or without help from Boris.

WHAT YOU NEED TO KNOW
● A €2m property investment plus a €150,000 donation gets EU citizenship after six months.

● Spend €300,000 on property to gain permanent residency in 3-4 months. After seven years you can apply for citizenship.

● Passport holders have access to free healthcare, but many locals buy private health insurance. Expect to pay €200-€300 a month for a family of four.