Many people tell me that they would love to buy a property in Cyprus and move here permanently, yet they don’t know where to start…
I often explain that the first thing people need to do is make a commitment to focus on achieving their objective. Many people dream and say that they want a better life, want a new job or want to live in a better neighbourhood…and most of those people still have those same dreams 10, 20 or 50 years on.
The first key step to doing anything is to determine that you’re 100% dedicated to making the life-changing move to Cyprus. And it’s important to get clear why you want to do it. Is it for a more relaxed pace of life, better weather, to pay less tax, to live the island life or for a better up-bringing for your children?
The next step is to sort out your finances. Many people skip this absolutely necessary step and that can cause HUGE issues in the future. Prospective buyers are eager to chat about the type of property they want, the location, and even the design of pool…HOWEVER, these are all details and need to be considered only AFTER they have figured out how much money they have to spend on the property – and subsequently how much they’ll have to live on.
When speaking with a good friend interested in moving to Cyprus, he mentioned that he has a property he could sell. He went on to say that his wife has a savings account and some other small investments. He added that they both have pensions and personal items they could consider doing something with. My friend also mentioned that he has considered re-mortgaging his house in the UK as there’s quite a bit of equity in it, using the money for a deposit and renting his UK property rather than selling it.
After my friend stopped talking I asked “So…how much money do you have available and how much do you want to spend? Considering it will cost you around 10% in buying costs (solicitor, taxes, fees, etc) and you’ll need money to live on until you start making money…?”
A trifle crestfallen, my friend replied “It depends…It depends on what gives us the most freedom and flexibility and what allows us to make the move without worrying whether we have enough money or not…”
In the end, my friend realised that he had several ways to structure his finance, but was not sure which would result in the soundest financial solution long term. At this point, I explained that the best thing he could do would be to contact a Financial Adviser – someone who could look at every possible scenario and show him the actual potential outcome of each choice. There are great financial planners that specialise in people moving to Cyprus – both over in Cyprus and in the UK.
Without a firm idea of finances, situations can arise where buyers overextend themselves. The last thing anyone wants is a fantastic property in a dream setting that they can’t realistically afford! There’s no fun in that…
My key point is that provided you’ve made the decision to go for your dream there are many ways to pay for a property, to avoid paying unnecessary taxes, and/or to put extra money in investments that can help you to fund your purchase and your future…BUT YOU NEED TO SORT THESE ISSUES OUT BEFORE YOU BUY rather than after.
Kim Brown is the author of the Cyprus Buying Guide. The guide is a publication dedicated to exposing poor practice, property buying pitfalls and providing an educational instruction manual to buying and/or investing in Cyprus property. Get your FREE Cyprus Mini-Guide on buying a property here.