It makes sense to invest in the island of Cyprus. Although the island is divided, each area has strong reasons for being an economically sound investment.
Cyprus is one of the fastest growing property markets in Europe, owing to very competitive prices. The market in the south is growing at a steady rate, offering a secure investment for buyers.
The downturn of the Cyprus Stock Exchange meant that it could no longer meet investor expectations, leaving the property market the best major investment alternative in Cyprus.
Northern Cyprus property prices are much lower compared with anywhere else in the Mediterranean. Currently, there is a property boom in this part of the island, particularly round the Kyrenia region. Not only is the property in Northern Cyprus good value for your money, it is also a realistic investment opportunity.
The increase in property prices has been around 20% and looks set to increase even further over the next decade.
The cost of living in both the north and south of Cyprus is low, which makes Cyprus a very attractive area for tourists and those considering retirement in Cyprus.
Agriculture forms a large part of the economy. Therefore, while imported products are expensive, local produce is excellent and fresh.
Since May 2004, Cyprus has been a full member of the EU. Accession has brought with it several benefits to the Cypriot economy while the country now gains from increased EU financial assistance. Services and products now have access to a huge single market with free movement of goods and this can only have positive repercussions on the Cypriot economy.
Cyprus is currently undergoing the Strategic Plan for Tourism 2010, which plans the upgrade of its facilities and resorts in line with changes in tourism trends, with the chief aim of launching Cyprus tourism well into the 21st century. This will be achieved through increasing the amount of tourist arrivals, per capita tourist expenditure, length of stay and repeated visits. We will see an increase in theme parks, agro/nature tourism, marinas and golf courses to cater for the many interests of today’s tourists.
Between 2003 and 2006, the Turkish government declared an investment into Northern Cyprus of $550 million to improve infrastructure and tourism.
The Cypriot economy is small, diversified and prosperous. Industry employs 29% of the labour force, while the service sector employs 57%. Rapid growth in exports, mainly of agricultural and manufactured products along with tourism has played an important part in developing the economy.
Taxes in both parts of the island are low:
In North Cyprus, purchase tax on property is 3%, while VAT is 5% - both of these taxes are calculated on the value of the property assessed by the Land Registry Office. There is a Municipal Tax of 1% payable in most regions.
In the south, taxes vary according to the value of the property. Transfer fees on a property of up to 50,000 Cyprus Pounds (CYP) is about 3%. A property of less than 100,000 CYP pays no annual taxes.
The Republic of Cyprus has long been a popular holiday destination for British tourists, possibly because settling in is not as much of a culture shock as on other Mediterranean islands. English is widely spoken on this former British colony.
The North has all the climate and land advantages of the south, offering a broad spectrum of places to visit and things to see. Many Turkish Cypriots speak English in this former British colony. In addition there is the excitement of a different cuisine and cultural experience.
Plans are afoot to increase tourism on the entire island and the infrastructure is being improved and updated. Ercan International Airport in Northern Cyprus is to be opened to international flights and a marina and many new developments are all planned for completion in 2010.
Today, North Cyprus will need to reach political settlement with the south and Turkey will need to resolve the North Cyprus situation in order to enter the EU. Meanwhile, America and the UN are putting strong pressure to the Greek side to accept an Annan Plan based solution. It is highly likely that if the parties on the Greek side continue to drag their feet (which they have done since rejecting the Annan plan, which the Turkish side accepted), there will be independent recognition of North Cyprus from the USA and then the rest of world.
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