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FT 03 OCT 92 / Property: Cyprus, anxious to keep up standards - Audrey
Powell considers the penalties and rewards of buying an island holiday home
By AUDREY POWELL
SO MANY people wanted to visit Cyprus on holiday this year that the island
authorities asked tour operators to cut the number of flights. The island is
anxious to keep up the quality of its visitors and does not want them coming
on very cheap packages, or with no accommodation booked.
You might think, then, that buying a property in Cyprus and letting to
holidaymakers might be good for the owner and for the island's tourism.
However, stiff regulations relate to property-owning by aliens in Cyprus.
Officially, non-Cypriots are not allowed to let, although the authorities
admit that letting is rampant. The Cyprus Trade Centre in London says it is
becoming clear that the government will eventually attempt to control this
which might mean that income from letting would be affected.
However, one island estate agent said it was not the money involved that was
the problem. The Cyprus Tourist Office did not want people letting without a
licence as they might be offering poor accommodation.
Permission to buy in the first place must be obtained from the Council of
Ministers. This is usually granted, although with demand by non-Cypriots for
property, especially flats, increasing, it could take several months. A
non-Cypriot may only own one property or buy up to about two-thirds of an
acre on which to have one built. The Cyprus Trade Centre (071-734-4791) is a
useful source of information for potential buyers and can supply a checklist
of steps to be taken by a non-Cypriot purchasing on the island.
On resale, a non-Cypriot is allowed to repatriate the amount of the original
purchase, but taking out any profit must be staggered. This regulation may
soon disappear; as Cypriots themselves are now allowed to take out an
increasing amount of money, it is increasingly felt to be pointless.
Prices in Cyprus are reasonable and life is easy. There is a wide choice of
new property being built both by large developers and small builders. On the
other side of the coin, this results in a poor market for resales, if you
want to leave.
Many British buyers already know the island, through serving there in the
forces or in other work. Some have regularly spent holidays there and buy
for retirement, or pre-retirement. That market accounts for a considerable
proportion of sales to purchasers, with the island's low tax rates an
important draw. The island is of less long-term interest to younger people
as non-Cypriots are not allowed to work there.
A disadvantage for some who might like to consider a holiday home in Cyprus
is the lack of golf courses. There is a reluctance to use precious water to
irrigate. In some areas the general water supply has to be rationed in dry
summers.
Even so, you are regularly assured that the first full-size civilian course
is going to materialise 'next year'. Now it is 'autumn 1993' and only the
greens will probably be green. There is said to be a waiting list.
A shadow still hangs over Cyprus: it has been a divided island since the
Turkish invasion in 1974, although the situation has been stable for many
years. It is hoped that discussions between the Greek and Turkish sides that
have been taking place in New York under the sponsorship of the United
Nations, will finally bring about a solution. These are due to resume on
October 26. The aim would be to make a federal republic of Cyprus, after
approval of an overall framework agreement by the two communities in
separate referendums.
This would clearly facilitate its application to join the EC, leading to
more regulations, like that prohibiting non-Cypriots from working on the
island, being relaxed.
But there are many who do not see the long-running Cyprus question being
resolved shortly. Some even suggest that the Greek Cypriot section, the
southern two thirds of the island, might aim to join the EC on its own.
Either way, Cyprus is a pleasant island, which gets a lot of sun. The people
are friendly, most speak English and as a former colony, they understand
British customs.
So, a brief look at a few properties that a buyer might consider.
Leptos, in the development field for 30 years, says its flagship is still
Kamares Village, set back in the hills five miles from Paphos and
overlooking Coral Bay. It is part way through its 600-villa programme there.
Properties are built to order, taking about 18 months. A two-bedroom
bungalow could cost Pounds 79,000, but prices depend on design and plot. It
has a number of other projects under construction, some are small schemes,
some offer apartments and maisonettes.
An increasing number of older citizens attracted by Cyprus's advantages are
retiring to the island, says London manager Peter Katsantonis. Special
reciprocal treaties between Cyprus and the UK enable pensions to be remitted
tax free. Local income tax is levied at the rate of 3 per cent of one's
declared income.
Leptos' London office (081-340-8096) can send a free booklet 'A Guide to
Retirement in Paphos'.
There is Cybarco (London tel 071-436-3881), a civil engineering and
construction company and member of the Lanitis Group.
Among its latest developments are Marina Beach, in Limassol, close to the
sea and the Sheraton hotel and marina, offering two-bedroom apartments from
Pounds 40,800, and Yialos Village, Larnaca, a beachside development of
apartments and bungalows from Pounds 27,000.
For a different market it offers Plati Yitonia, in Nicosia, two-storey, four
bedroom houses near the national park. These have verandahs, gardens and
parking spaces, and are priced from Pounds 99,400.
Cosmo Developers (London tel 071-243-2113), established in 1945, says it
employs 25,000 people worldwide. Its leisure division includes residential
property, hotels and Cyprus's first country club.
It has six projects on the island, in demand both from the British retired
but also from families of expats working in the Middle East.
But not everyone wants new property. Somerset-based Babet (0460-76213)
points to the variety of scenery in Cyprus, with its wooded Troodos
mountains rising 6,400 ft above sea level and its cultivated land growing
vines, lemons, olives.
If that is of more appeal, this agency has resales away from the towns and
resorts. There is also the 11th century village of Vouni, in the Troodos
foothills: 'The surrounding mountains are terraced vineyards and Vouni's
grapes produce one of the best local wines.'
Many of the houses have internal stone arches spanning the width of the
property, exposed rafters and timber balconies overlooking the narrow
streets. The agency has several of these for sale, some unconverted from
Pounds 10,800; others already renovated, from Pounds 50,400.
The Financial Times
London Page VIII