By Antonis Loizou FRICS
After the issue of Brexit first raised its head we have been closely following the reactions of businesses and individuals regarding over whether Cyprus will win or lose from such an event in terms of the real estate market.
It is unfortunate that the UK will leave the EU and we feel we are losing a lifelong friend. Many of us who have studied or worked in the UK wish the Brexit results could be revised (unlikely).
We note that a number of British nationals (including those of Cypriot origin) are applying for a Cypriot passport in order to bypass the restrictions that the British might have regarding (in our opinion) the acquisition of real estate, the Cyprus capital gains tax situation, the inheritance tax and other income taxes etc. For those British of Cypriot origin, this might be straight forward, but those who are not, its gets complicated.
In order to get Cypriot passports with the new regulations applied (buy a house for €500,000 at least) or for permanent residency (of €300,000), it is not an easy goal notwithstanding that we hope that our government will come up with something to ease this situation for the British.
We have also seen a welcome interest from UK-based companies and we expect this trend to continue and even increase nearer the exit date. With an eye on shipping companies and with the efforts of the new deputy minister of shipping we expect that Cyprus will gain “something” out of the Brexit, with the main beneficiaries being the other large European countries. Our low tax system with benefits to the managers in addition gives us an advantage.
Benefits apart, we have to look at the possible new fluctuations in the exchange rate, the tourist numbers (expected to fall) and other consequences to ascertain whether Cyprus will be on the plus or minus table. So far international reports stipulate that Cyprus will be a loser (as well as Malta-Spain etc) and this is not good.
The British market, regarding real estate for houses (mainly holiday homes) is now very limited and low budget, directing interest mainly towards Paphos.
The problem is that the British nationals will be classed as a non-EU, third country nationals, which implies by projection that they can buy only one house, on land with a maximum extent of 4,000m², with limitations on rentals, income, loss of tax benefits etc.
It is a mess and notwithstanding the overall economic reviews we must focus now on the real estate market consequences, and enter a discussion with British bodies to come up with some sort of solution.
Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents, www.aloizou.com.cy, [email protected]