How much money do you need to retire in Cyprus

Cyprus is a sunny island with a peaceful yet cosmopolitan lifestyle. But is it an affordable place to retire? Our guide contains all the information you need to help you decide whether retiring to Cyprus is a good idea.

Key takeaways

• The Cyprus tax system is favourable.
• Buying and renting property can be expensive but still lower than in other parts of Europe or the UK.
• Bills, utilities, shopping essentials, health and leisure are not too expensive for the average retiree.
• Transport is not sufficiently well-developed, so you will need to own a car.
• Permanent residence options are available for retirees.

Tax

Cyprus has double taxation agreements with many countries. Provided your country is one of them, you will not be taxed twice while living in Cyprus.

If you are a tax resident of Cyprus, you will pay tax in Cyprus on your worldwide income. However, if you are not, you will pay tax only on the income you receive from Cyprus.

A tax resident of Cyprus resides more than 183 days in a calendar year in the Republic or for at least 60 days and is not a tax resident anywhere else (“the 183 rule” and the “60-day rule”).

Note that inheritance, interest and dividends are exempt, while there are also exceptions for capital gains.

So, how are pensions taxed in Cyprus?

There are two options: a flat rate of 5% with an allowance of EUR 3,420 or the pension taxed as annual income.

The allowance means the 5% applies to sums over EUR 3,420.

Annual income is taxed according to an income scale.

A lump sum received as retirement gratuity is not taxed.

Rent

Renting a place to stay gives you many options because of the variety of properties. One note of caution is that prices are on the rise. Nevertheless, a lot will depend on location, type of property and whether the property is new. Some indicative prices for a single-bedroom apartment mentioned in the Cyprus Mail recently are:

• 500-600 Nicosia
• 800-900 Limassol
• 400-500 Larnaca
• 350-450 Paphos.

Three-bedroom apartments should be about EUR 950-1,000 in the major cities. However, a lot depends on location, so it is possible to rent cheaper.

Buy

Buying also includes all types of property, from studios to boutique villas. Prices are rising, though they are still cheaper than in other parts of the world, like continental Europe or the UK. As with renting, a lot will depend on the property's location, type and condition. Anyway, investing in property in Cyprus has some obvious advantages, one of which is Cyprus residency by investment.

Bills and utilities

Electricity and water should cost an average family about EUR 250 bimonthly. However, the budget may go up during the summer, when air-conditioning is needed throughout most of the day and some night hours.

As of June 2022, the Electricity Authority of Cyprus is charging EUR 0,35 for domestic use, with the bimonthly basic energy charge per unit at EUR 10,35. So consumption is added to the basic energy charge.

For water usage charges, consult with the municipalities. For example, Larnaca charges EUR 16 for fixed and maintenance fees and EUR 1,20 per cubic metre of water.

Mobile phone packages vary and offer various services, including unlimited internet use. Value plans range from EUR 11,00 to 12,99.

Wi-fi and internet access are also available for homeowners, with value packages at about EUR 14,99-18,00.

Basic goods and shopping

For basic goods and everyday essentials, you are advised to check the Cyprus Consumer Service, which has an updated index every month. In November 2023, for example, milk (2L full fat) was EUR 2,88 on average, large sliced white bread 1,80, eggs (12) 3,31 and bottled water (12x500 ml) 2,92.

Here is the link: https://consumer.gov.cy

Concerning shopping, all cities have a mall and shopping streets throughout the city area. The major clothing houses and stores have shops in Cyprus; these include Mango, Marks and Spencer, Stradivarius, Zara and so on.

Fuel and transport costs

The price for unleaded 95 gasoline is EUR 1,341 per litre on average, while petrol for central heating is EUR 1,071 per litre on average (prices January 2024).

Public transport is infrequent, and you may need a car, especially if you drive from one city to another or from a village to the city or seaside.

If you rely on public transport, the prices are relatively low and can be found at: https://osea.com.cy/bus-routes/.

For each city, check with the local municipality websites.

Health

With a residence permit, you are allowed medical treatment with the General Health System (Gesy), which is free. There are numerous private healthcare providers of very high standards; their fees, however, may be expensive.

Fitness and leisure

You can join fitness and wellness clubs and spend your free time at the movies or cafes. They are all reasonably priced, so do not expect major expenses there.

Income and residence permit

For retirees, the best option is the Category F residence permit, granted to persons with a secured annual income from outside Cyprus. The minimum is about EUR 10,000 annually, with an additional EUR 5,000 for each dependent family member. This type of residence permit does not give you the right to work.

Permanent residency by investment is granted if you buy a property of at least EUR 300,000 and have a secured annual income of EUR 50,000 annually. This income is increased by EUR 15,000 for the spouse and EUR 10,000 for each underage child of the family.

How we can help

Our office can help you throughout the process of retiring and getting a home in Cyprus. Contact us for more information.