Cyprus is one of the most popular and attractive destinations for investment, relocation, and vacation, known for its stunning beauty, rich history, and excellent resort infrastructure. Let’s take a closer look at why more and more foreigners are investing in properties on the island, what benefits these investments bring, and which properties are appealing for investment in 2025.
What Does Buying Property in Cyprus Offer?
When you buy property in Cyprus, you get to enjoy a sunny climate and the island’s beauty, residency through investment, some of the lowest taxes in the EU, and access to education, healthcare, and social services. The housing quality on the island is high, with affordable prices, steady demand, and good returns.
Benefits of Investing in Cypriot Real Estate
Investors looking at residential or commercial properties should definitely consider Cyprus. The island has several obvious advantages that make it one of the most attractive investment spots in 2023.
Residency and Citizenship through Property Purchase in Cyprus
A key factor in choosing a country for investment is the opportunity to gain residency or citizenship. Cyprus has a program that allows foreign nationals to obtain residency by investing in real estate starting from €300,000.
After the passport program was scrapped in 2019, the residency by investment program became the main driver for growth in the primary real estate market, attracting foreign investors. Over the last four years, the average transaction value for real estate in Cyprus has risen from €195,000 to €295,000, getting close to the €300,000 threshold for the residency program.
The stage of construction for obtaining residency doesn’t matter: you can buy property at the foundation stage or closer to completion.
Quality Education and Social Protection
The Republic of Cyprus is known for its high level of education and social protection. Education in Cyprus is accessible to all citizens and residents. The island offers a wide range of public and private schools and universities recognized by international academic organizations and educational rankings.
Cypriot schools and universities provide a variety of programs in different languages. Students at Cypriot universities can also participate in the EU Erasmus+ program, which allows them to study and gain work experience in other countries.
Cyprus has built an extensive social security system that covers most health, labor, and pension-related risks. All employed citizens and residents are required to contribute to the social fund, which finances various benefits and allowances. Additionally, Cyprus has a national health system (GESY) that provides a range of free or subsidized medical services for all residents.
Attractive Rental Income Potential
Investing in real estate in Cyprus can generate monthly income if the property is rented out, along with capital appreciation over time. Rental yields on projects in Cyprus range from 6% to 8.5% per year, depending on the type of property and its location. Demand for both commercial and residential properties on the island remains consistently high.
Investors can choose to rent out their properties themselves or enter into a management agreement with a property management company.
Average Rental Prices in Cyprus
| Region | 1 Bedroom | 2 Bedrooms | 3 Bedrooms |
| Limassol | €1,800 | €2,500 | €3,000 |
| Paphos | €1,000 | €1,800 | €2,100 |
| Larnaca | €1,000 | €1,600 | €2,000 |
The island’s unique climate and weather conditions, with around 300 sunny days a year, make Cyprus an ideal vacation spot with the longest holiday season in Europe. Investors typically rent out their properties to tourists from May to October.
Protection against Inflation
Real estate is an asset that tends to retain its value over the long term and generates income through rent or appreciation. Inflation in Cyprus peaked at 8.1% in 2022 amid soaring global commodity prices. It is expected that inflation will drop to 3.8% by 2025.
Investors can sell their properties after 10 years of ownership without paying VAT to the government. They will only need to pay capital gains tax. Property values in Cyprus are steadily rising, increasing capital appreciation, making it a lucrative asset that provides all the benefits of residency status.
There is strong demand for properties from both locals and foreign buyers, especially from the UK and other countries.
Price Growth in Cypriot Real Estate
The increase in property prices in Cyprus outpaces inflation. The Central Bank of Cyprus reported price growth in real estate across all provinces in the second quarter of 2023. Quarter-on-quarter, prices grew by 1.4% in Nicosia, 4% in Limassol, 4.1% in Larnaca, 6.5% in Paphos, and 2.5% in Famagusta. Year-on-year, apartment prices have been rising in all provinces for the eighth consecutive quarter. Specifically, prices in Nicosia increased by 4.2%, in Limassol by 13.9%, in Larnaca by 13.1%, in Paphos by 16.3%, and in Famagusta by 2.5% compared to the same quarter in 2022.
Even at the construction stage, property values begin to rise. From the start of sales to the completion of the project, prices can increase by 20-30%.
Cyprus Income Tax on Rentals
Since 2017, property owners in Cyprus pay an annual municipal tax based on the market value of the property, which is approximately 0.1-0.2%. Rental income is subject to income tax, which ranges from 0% to 35%.
Income up to €19,500 is tax-free, while income from €19,500 to €28,000 is taxed at 20%, and from €28,000 to €36,300 at 25%, and so on. (Read more here.)
Key Areas for Investment in Cyprus
Luxury apartments and villas in Cyprus are in high demand, especially in the top areas and their immediate surroundings: Larnaca, Limassol, and Paphos.
Limassol
Limassol is a resort with a well-developed infrastructure and a large population. Investors often look at properties in the eastern part of the city: the neighborhoods of Neapolis, Ayia Zoni, Agios Tychonas, and Columbia. Projects near the new casino also show high potential; with limited supply and a fixed amount of land in these areas, the price growth during construction is expected to be much higher.
Paphos
Paphos is one of the oldest and most beautiful cities in Cyprus. The popular areas among investors include Kato Paphos (the old town), Universal, and the rapidly developing Geroskipou, where many development projects are underway, and property prices are rising, yet the entry threshold remains relatively low.
Apartment prices in Paphos start from €1,400 to €1,700 per square meter. The median price for apartments in good neighborhoods in Paphos is around €308,000. The average price for a two-bedroom apartment in a prestigious area of Paphos ranges from €150,000 to €300,000. Villas with private pools and sea views can start from €400,000.
Larnaca
The third-largest city in Cyprus offers a perfect blend of tradition and modernity. The city is gaining popularity among investors and often surpasses Paphos in terms of property transactions.
Investors typically choose properties closer to the center. In 2023, the Livadia area is becoming increasingly popular—it’s located near the new marina, a major attraction for the city. Properties in this area have high rental potential: elite hotels and resorts are choosing Livadia, infrastructure is actively developing, and properties will compete for tenants in the short-term rental market.
The average price for a two-bedroom apartment in a prestigious area of Larnaca ranges from €200,000 to €350,000. Make your choice!
