UK pensioners eyeing a retirement home in Cyprus may have to rethink their plans, as changes proposed by the government on granting residence permits to non-EU nationals raise the bar for newcomer retirees by €130,000.
Amid a surge of demand from retirees from the UK, Israel and Germany, real estate stakeholders in coastal areas are worried the government’s plans will prematurely burst a mini-boom in the sector.
The Interior Ministry confirmed to the Financial Mirror that the cabinet had approved amendments to the regulations governing how immigration permits are granted to foreign nationals.
A bill on the changes has already been prepared, cross-checked by the legal services, and submitted to parliament.
While the ministry declined to disclose details of the changes, arguing they are subject to amendments by MPs, sources argue the news is not good for expats wanting to live out their retirement in Cyprus.
Although admittedly making things easier for self-employed and skilled workers from third countries, retirees will need almost double the money to invest in a home and four times more cash in the bank.
According to the Financial Mirror’s information from Parliamentary sources, the changes will see those intending to reside in the Republic pay tens of thousands more.
As things stand, UK expats and other retirees wanting to make the island their home must obtain a suitable privately-owned dwelling in the Republic for at least €150,000.
Financial Mirror sources confirm that authorities are promoting the minimum amount invested in housing property must be worth at least €250,000.
This means retirees will need another €100,000 from the get-go.
Furthermore, changes foresee that anyone who intends to reside in the Republic without exercising any employment or other economic activity must have an annual income of at least €40,000, plus €10,000 for each additional family member.
Currently, retirees only need an annual income of €10,000 to be accepted as candidates for a residence permit.
UK concern
“This could endanger the boom in demand we have seen in recent months for property in the coastal areas, especially Paphos,” said Esme Palas, Barrister at Law, Partner at Michael Kyprianou and Co LLC Paphos.
She told the Financial Mirror that since news broke over the government’s intentions to increase requirements for people intending to reside in Cyprus without exercising any economic activity, requests have flooded in from UK citizens.
“They are concerned, as many of these people rely on the sale of property they own back in the UK and their pension,” said Palas.
As she explained, the changes will exclude a large number of UK retirees, threatening the property market.
Real estate agents in Limassol and Paphos are reporting the highest demand from foreign buyers and Cypriots for homes since 2020 when the government ended the disgraced citizenship for investment scheme.
The boom is amid a global crisis, with the war in Ukraine raging and sanctions hitting Russian investors, who were the number one buyers for properties in Limassol and Paphos.
Palas said the influx in demand is powered mainly by UK expats looking for a retirement home, Israelis, and Germans looking to relocate.
“Sales in Paphos are flying. This is the most traffic we have seen in recent years, with our clientele growing rapidly as more foreigners are looking for a home on the island.
“This is the biggest movement we have seen in the local market since the end of the citizenship for investment scheme, coinciding with two years of inaction due to COVID restrictions.”
Palas said that stakeholders are recording a vivid interest from UK retirees for new properties for the first time.
Indeed, Paphos has seen sales to foreign nationals rise by 113% in the first five months, compared to last year, as 746 sales documents were submitted with the Land Registry.
Of the 746 properties sold, 415 were bought by non-EU nationals, and non-EU citizens bought 186 in the first five months of 2021.
Although the Interior Ministry refuses to confirm the paper’s information on the proposed changes officially, the philosophy behind amendments is to align the residence scheme with “realities on the ground”.
Eleni Averkiou, a Danos/BNPRE Group property consultant, said the changes, as reported, may not necessarily be a bad development for the real estate sector.
“Taking as granted that the government does intend to push up the minimum value of a dwelling needed to be purchased by a retiree, this could prove to be in favour of the real estate and construction industry,” said Averkiou.
The real estate consultant said that keeping the minimum for the purchase at a low €150,000 could discourage foreigners from looking for newer property.
“Bringing up the minimum, foreigners would be encouraged, in a manner, to seek out newer properties, boosting the local housing construction industry.”
She further explained that encouraging the construction of newer homes would also mean more supply when there is a high demand from Cypriots.
“This could bring about some sort of stability in the sector in an era where everything is fluid, due to the war in Ukraine, possible outbreaks of new conflicts in other regions of the world and of course inflation.”
Isn’t it amazing how laws such as this can be rushed through by the elite parasites when it suits them, when very important and sensible laws such as those demanded by the EU are left hanging for years.
The well connected elites just can’t help themselves can they?
The article isn’t even correct. Part seems to refer to fast track and part to Cat F. It’s a shame the journalists couldn’t be clearer on what they were writing!! All this is doing is scaremongering. ..
All this is still up in the air. There was a report last month Legal foreign nationals if they have income of 40,000 euros, which makes no reference to fast track or category F.
You can find details of the fast track procedure at Criteria for granting an Immigration Permit within the scope of the expedited procedure to applicants who are third country nationals and invest in Cyprus.
I’ve just made an offer of €260,000 for a property but don’t have income of €40,000, do I have to think again or will I have time to get in on the old policy?
I expect it will some time before any new policy is implemented as the terms will have to be discussed and agreed with MPs.
But this is not a guarantee! Retirees who are making their final major life-time decision deserve guarantees from the Government and Parliament. The governing powers-that-be have a duty of care to those potentially stranded retirees invited under the old rules. Or is duty of care now an out-dated responsibility?
I’ve been living in Cyprus for 20 years and don’t know of any Brits who’ve been ‘stranded’. Most of the people we got to know after we arrived we’re at least 10 years older than ourselves. Some are still here living on their basic UK state pension, others have returned to the UK because family ties were too great.
People have a duty of care to themselves and I’m sure most people will know when it’s time for them to leave.
Could the money for annual income €50000 for 2 people be carried forward to the following year if it is not all spent in the first year?
You can’t carry forward annual income.
Eleni Averkiou, a Danos/BNPRE Group property consultant, said the changes, as reported, may not necessarily be a bad development for the real estate sector.
“Bringing up the minimum, foreigners would be encouraged, in a manner, to seek out newer properties, boosting the local housing construction industry.”
One has to wonder what connection this person may have with development companies???
This Bill will essentially kill the real estate market, create false over priced properties (developers taking advantage) to get the residency permits and basically does nothing for the real estate market.
Who are the 3rd country nationals coming to Cyprus??? Brits, and some Israeli and some Arab, but the vast majority of Brits. This is a ridiculous bill at a time when Cyprus is being flooded by refugees and asylum seekers that bring no money or prospects to the country they are trying to kill the goose that lays the golden egg so that some ‘developers’ gain out of the sale of new over priced properties. And this person call herself a ‘Consultant’, bl**dy hell!
Totally agree with you.
The elites maintaining the gravy train with a little bit of anti-Brit thrown in.