Cyprus is a popular retirement destination for Britons in search of Mediterranean sun and possible tax advantages. A new book and website, ‘Retiring To Europe’, provides essential information for those thinking of retiring to the island.
The following are brief extracts.
There are various tax issues Britons face when moving to Cyprus. With specialist advice from an adviser with a good understanding of both jurisdictions, you can make your money work for you, protect it against foreign taxes and make the most of the opportunities available.
Some Cypriot taxes sound the same as taxes in the UK but are calculated differently. And in some cases, what is tax-free in the UK is not tax-free in Cyprus.
Cost of living
The cost of living in Cyprus is not as low as it used to be before Cyprus joined the EU in 2004 and replaced the Cypriot pound with the euro in 2008. However, there are still some goods, services and commodities that are noticeably less expensive than in the UK.
These include fruit and vegetables, beer, wine and local spirits, utilities, rent (excluding holiday lets), and public transport and taxis, which can be less than half the cost in the UK. Inevitably there will be surprising vagaries, including the high cost of dairy products, due to the lack of cattle on the island.
According to Numbeo, the cost of living in Cyprus is around 24% lower than in the UK (excluding rent). Rent in Cyprus is 61% lower than in the UK. Property prices are up to 65% cheaper.
Cyprus was hit hard in 2013 when its banking system collapsed. The country was forced to borrow €10bn from the EU, European Central Bank and IMF, there were queues for cashpoints from dawn and savers’ bank accounts were raided to help pay back the state’s debts.
But in March 2016, Cyprus exited its bailout programme and no longer needs financial support. Its banking system is now on firmer ground, unemployment has dropped and the economy is growing again.
The property market has taken a turn for the better too. House price falls are decelerating and sales were dramatically up in 2016 compared to previous years. Prices, however, are still around 30% lower than pre-crisis levels and there are currently about 5,000 sales a year compared with 18,000 a year in 2002-2007.
In common with much of the rest of western Europe, public and private sector healthcare services coexist relatively efficiently, allowing patients to cherry-pick consultations and surgical procedures as they prefer.
Most doctors, nurses and support staff in Cyprus speak English, but difficulties in communication can still arise, especially when a complicated procedure is being explained. If in doubt, patients should ask for help with translation.
If you are considering private healthcare, AXA International quote €6,100 per person per annum for a comprehensive cover policy with no excess and inclusive of taxes, based on a couple who are aged 65 and in good health.
State healthcare is inexpensive and sometimes even free for EU citizens. Emergency medical care is free to all citizens and expats alike, but routine doctor and hospital appointments are often chargeable and with inpatient and outpatient care, there is likely to be a fee.
Since 2013, nominal charges have been introduced for treatment for most Cypriot citizens and permanent expat residents. For those who do not hold a medical card, some charges will be higher.
State healthcare is available to anybody paying into the Cypriot social security system, but may also be available to those in receipt of a UK state pension, long-term contribution based incapacity benefit or bereavement allowance. In order to qualify it will be necessary to apply for a S1 form (certificate of entitlement) from the UK Pension Service.
• You can find much more information on retiring to Cyprus and other European destinations by going to www.retiringtoeurope.com. There you can download the complete 276-page guide.