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Buy Abroad News

14 Dec 07

Retiring To Cyprus

Cyprus is rapidly becoming a first choice retirement destination for British retirees, and with good reason.

--- The mythical history, the varied landscape and the beautiful beaches means that in Cyprus it is so much easier to take it easy and enjoy life. Year round sunshine, a lower cost of living, cheaper house prices and easy access back home, make Cyprus a very attractive option.

Known as a tax haven, the financial benefits of moving to the birthplace of Aphrodite are particularly appealing. There are exceptional benefits for the EU citizen in Cyprus, including 0% tax on all investment income. There is a basic 5% tax levied on all pensions, and income tax on bank interest and other dividend income is set between 10% and 15%, significantly lower than in Britain and other popular retirement destinations.

A double taxation treaty means that as a tax paying resident in Cyprus, taking advantage of the low rates, you do not have to pay tax in the UK as well. And inheritance tax has been abolished so anyone who is able to change domicile to Cyprus could avoid this most controversial of taxes.

Thanks to an agreement with the Cypriot government, British pensions are index linked, which means they increase in line with inflation at the same rate as in England. Research by SAGA magazine shows that almost one million Brits draw their pensions abroad and that is set to increase to one in eight Brits over 55 living abroad by 2010, and one in five by 2020.

With the state of the current UK property market it is easy to see the appeal of buying abroad - you can simply get more for your money. Unlike in many EU countries, buying a property in Cyprus is a straightforward process. Legal fees are low and the system is considered to be very fair and safe. As an added bonus, once you have your home, personal effects can be imported into the country duty free and pets can be quarantined in your own home. One quirky rule is that the house must be purchased in foreign currency.

Foreigners are allowed to buy as many properties as they want to or are able to. The banking system is modelled on the British one and it allows foreigners to move money in and out of Cyprus freely. On signing the contract of sale and paying a deposit, an application to the Council of Ministers must be made for approval of a non Cypriot to purchase an immovable property. A conveyance contract must be filed with the Land Registry which prevents the vendor from selling the property twice. A residence permit must be applied for as well.

As a retiree, you will require a Temporary Residence Employment (TRE) permit, category F. This should be applied for on arrival as the application process can take up to a month.

You can however stay in the country for up to 90 days without a residence permit and you do not need a visa. As a retiree you will be unable to do any work, paid or unpaid and must be able to show that you are able to support yourself. The guaranteed minimum income required to qualify currently stands at around €9,500 per annum.

For anyone moving to the island, the strong links between Cyprus and the UK make settling into daily life a smooth and enjoyable process. Although Greek is the national language, over 90% of inhabitants speak English. Whilst healthy Mediterranean food and an active outdoor lifestyle are bound to keep you fit and well, there can be no worries about healthcare if the unforeseeable should happen. The infrastructure in terms of schools, hospitals and general health care is excellent. In the major cities and towns there is an extensive network of support groups and clubs for expatriates, and especially for retirees.

If you do feel a little homesick, flights back home take 4.5 hours and currently can be booked on budget airlines from only £40, so keeping in touch with family and friends needn’t cost the earth.

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