This article offers practical insights for British people considering moving to Cyprus, covering key topics such as property, residency permits, taxation, retirement and business setup. It highlights the island's appeal, including its low cost of living, English-friendly environment, and favorable tax regime, while also noting considerations like bureaucracy and infrastructure.
Cyprus is an increasingly popular destination for British people, particularly for people looking to set up businesses or for retirement.
Generally British people are welcomed by Cypriots, and there is a strong expat community already well established. Recent changes to feasibility of securing a mortgage for Cypriot property has led to a definite surge in popularity.
Key reasons why British people are looking to Cyprus include:
People living in Cyprus typically enjoy hot summers with warm winters and outdoor lifestyle, although wildfires, flash floods and earthquakes cannot be ruled out.
The cost of living is significantly lower than the UK, much of Europe and the US, although the average net salary is also lower and household energy costs are typically high.
Brits commonly spend around €350,000 on a villa with private swimming pool, but prices vary depending on location. Take time to explore potential neighbourhoods - coastal properties, Nicosia and Limassol are more expensive than other areas. Check what the stamp duty rate would be; typically you would expect to pay an extra 0.2% on top of sale price. New builds have 19% VAT added in addition. Expect ongoing community / municipality taxes at around €250-350 annually.
To stay in Cyprus for more than 90 days as a UK citizen, apply for a visa or a residence permit.
The Temporary residency permit (Pink slip) is a popular one-year renewable visa. This requires you to demonstrate enough income to cover living expenses: at least €2,000 per month with more for family members.
There is also an expectation that non-EU expats would have bought or be renting a property already, plus have at least €10,000 in a Cypriot bank before applying. There are two common options for residency:
These permits are not the only options, but they are typically the most popular.
The Pink slip does not entitle the applicant to work in Cyprus as this requires a job offer and work permit.
If you are considering starting a business through a company on Cyprus you will need to:
One of the major factors for people choosing to move to Cyprus, other than lifestyle, centres around Cypriot taxes, especially for companies where corporate income tax rates are lower than many other European countries (currently 12.5% of profits).
For individuals who become tax resident, earned income has progressive income tax rates. Annual salaries under €19,500 are not taxed, but €19,501 - €60,000 will be taxed between 20% and 35%.
Retirees receiving pension income will be taxed at a flat rate of 5% of the pension payments, if they exceed €3,420 a month.
People who are not considered tax-resident in Cyprus pay no income tax.
To be considered a tax resident, a 183-day rule applies where you are expected to be in the country for more than half a year if you don’t have a permanent address in the country or are not working. If you do meet these criteria, you must be physically present in Cyprus for at least 60 days in a calendar year.
If you become a tax resident of Cyprus without living there for at least 17 out of the previous 20 years, you could obtain non-domicile tax status which can bring significant benefits.
There is no local inheritance, gift, wealth or estate tax and no capital gains tax, but expect to pay property transfer fees to pass on title deeds. There is some taxation on worldwide income if you receive wealth from abroad, however the Cyprus-UK double tax treaty ensures you won’t pay double tax on the same income.
Dividends and interest income are exempt from tax as part of the non-domicile system, but these come with a contribution to the well-regarded General Healthcare System (GESY) which is 2.65% of income. Contributions are capped at €4,770 per year.
There are two options for claiming foreign pensions: a flat tax rate of 5% on income over €3,420 or the progressive income tax rate detailed above. This makes retiring to Cyprus incredibly appealing for British expats.
