The island of Cyprus has long been a popular holiday and retirement destination for Britons in search of sun, beach and a Mediterranean lifestyle - not to mention potential tax advantages and cheaper cost of living! Although Cyprus residential real estate is not as cheap as Spain or Portugal are at present, buying an apartment or Cyprus villa is still cheaper than it is in the UK.
Moving to Cyprus does, however, throw up various tax issues. It is essential to seek specialist advice from a taxation lawyer who understands both jurisdictions, that of your home country and that of Cyprus. You need somebody who can make your money, your rainy day fund or nest egg, work for you and protect it from the taxman back home and the one in Cyprus, as well as making the most of any opportunities that might present themselves once you've moved to your new location.
Although some Cypriot taxes are the same as in the UK, some are calculated differently. What may be tax-free in the UK, for example, may not be tax-free in Cyprus and tax allowances granted in the UK may also not apply to such an extend in Cyprus and vice versa. It is also important to make a will that protects both your UK and Cypriot assets.
Exchange Rates matter
With the UK leaving the European Union in March 2019 the Pound has performed less well compared to other currencies, which means it is now far more expensive for British people to buy a home in Cyprus and to live there. Therefore it is even more important than before to use a currency exchange broker when transferring sums of money over to a Cyprus bank account - and it's not just the money needed to purchase a Cyprus apartment or villa either. If you are retiring to Cyprus, your pension can be transferred to your UK bank account or the one in Cyprus, but it will be paid out in Pound Sterling, which is no longer quite so strong against the euro and thus buys less these days. To protect yourself from exchange rate currency fluctuations that work not in your favour, use a reputable company that can deal with your monthly or quarterly pension transfers. Banks usually don't give the best rates!
Cost of living in Cyprus
Although the cost of living is no longer as low as it was when Cyprus joined the EU in 2004, some services, goods and commodities are still noticeably cheaper than in Britain.
Among these are fruit and vegetables, wine and beer and local spirits, rent and utilities These include fruit and vegetables, beer, wine and local spirits, utilities, long term rentals (excluding holiday lets), and public transport and taxis-the latter can be less than half the cost in Britain. Some things are considerably more expansive, often surprisingly so, but if you consider that there's a distinct lack of dairy cattle on the island you'll understand why dairy products are so dear.
According to portal Numbeo, living in Cyprus is ca. 24% cheaper than in the UK (excluding rent for holiday lets). Renting a home in Cyprus is on average 61% cheaper than renting in Britain, while buying a Cyprus property is around 65% cheaper.
Most doctors, nurses and support staff in Cyprus speak English, but you should be prepared that difficulties in communication can still arise, especially when a complicated procedure is being explained. If in doubt, patients should ask for an interpreter who can help make things clear.
For those considering private healthcare, AXA International quote 6,100 euros per person per annum for a comprehensive cover policy with no excess and inclusive of taxes. This quote is based on a couple who are aged 65 and both in good health.
Emergency medical care is free to all Cypriot citizens and expats alike, but routine doctor and hospital appointments are often chargeable. Inpatient and outpatient care is likely to attract a fee. However, state healthcare in Cyprus is inexpensive and sometimes even free for EU citizens, but you must apply for your European Health Insurance Card prior to leaving your home country or make travel insurance arrangements, if you are only staying in the country for a year or less.
State healthcare is available to anybody paying into the Cypriot social security system. Since 2013, nominal charges have been introduced for treatment for most Cypriot citizens and permanent expat residents though. If you do not hold a medical card, some charges will be higher.
State healthcare may also be available to those in receipt of a UK state pension, long-term contribution based incapacity benefit or bereavement allowance. In order to qualify it will be necessary to apply for a S1 form (certificate of entitlement) from the UK Pension Service BEFORE you leave for your retirement to Cyprus.
Buying a Cyprus Home
Since Cyprus exited its EU bailout programme back in 2016, and no longer requires financial support from EU member states, the island's banking system has been far more stable and unemployment has fallen too. The Cypriot economy is going much better and house prices are no longer falling at an alarming rate either. In fact, they have reached bottom and stabilized. Since 2016 house sales have risen considerably, but it has to be noted that house prices are still some 30% below what they were before the world-wide economic crisis struck in 2008. Back during its peak in 2007, Cyprus recorded around 18,000 sales a year, compared to around 5,000 sales a year now.
Settling into your Cyprus Life
There are numerous opportunities to make new friends and get involved in local activities. From playing golf to learning how to help with an archaeological dig, there's bound to be a local group doing something that you fancy getting involved with. Inviting your neighbours round for tea or before dinner nibbles and cocktails is a great way to get to know new people and keep homesickness at bay. A few online organisations are also great to use, such as InterNations.org and expatnetwork.com for example. The former may be geared towards younger people, but their forums have valuable advice applicable to all ages and some of their events also encourage all ages to participate.