buying a new develpment just outside Pyla

[Mbatty]

I am very interested in buying a property in cyprus, Pyla. I have my eye on a new development which will be finished this January. I am currently going through an agency called International Property Success, (IPS), the developer is called Oceanic developers Ltd. I really like the look of the development and the price is very competitive, although I am always very reluctent when investing my own money. I would like to know if you have heard of either the agency or the developer or can give me any advice that I may need.

Thanks

Martin.

[Pantheman]

I am very interested in buying a property in cyprus, Pyla. I have my eye on a new development which will be finished this January. I am currently going through an agency called International Property Success, (IPS), the developer is called Oceanic developers Ltd. I really like the look of the development and the price is very competitive, although I am always very reluctent when investing my own money. I would like to know if you have heard of either the agency or the developer or can give me any advice that I may need.

Thanks

Martin.

I don't know about this developer, but I just this morning saw a website advertising this project.
They claimed 'proposed theme park', this immediately set alarm bells going.
They claimed rental guarantee (ok 1 year is nice, but) and their figures for the rental returns, were, in my opinion, totally un acheivable.

They even mentioned cash back and 50% off MV. They even mentioned a vat rebate, which you cannot get unless you live there permanently. It's called false representation if you ask me.


Their prices started at 62,000 for a 1 bed apt.

Anyway, if it is just for your own holiday then good luck, but the way it was put across, showed me it was misleading to say the least, and I would not trust these people.

[Pantheman]

Here is what they said:

Oceanic Garden Residence is an exclusive development of luxury apartments located in Pyla, south-east Cyprus. A short 10 minute walk to the beach and 10 minute walk to the proposed Disney Theme Park, Oceanic Garden Residence poses a great investment opportunity for lifestyle purchasers and investor clients. Nestled between luxury villas and forestry land, the Location boasts spectacular mountain and sea views.


The apartments are constructed over 3 floors with Italian fixtures and fittings. Private balconies and roof terraces boasting spectacular views of the beach or mountains.

Deal Highlights

Discount: 50% from 2010 prices
DS Price: €62,000
Cashback: up to €14,956.50
Deposit: Gifted
Guaranteed Rental: Yes


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The Financials
100% Finance
Completion – January 2012
1 year rental guarantee to cover the first year’s mortgage repayments (capped for a 15 year term)
Excellent anticipated gross rental yields Example: Short‐term let: 12.84% / Long‐term let: 7.7%
A VAT rebate based on 10% of the market value Example: Market value: €89,000 / VAT rebate: €7,739
Bank charges and legal fees are to be paid by the purchaser at exchange of contract

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Best priced deal, 1 YEAR RENTAL GUARANTEE, Gifted Deposit , 10% Cashback on completion in 2012! New high spec luxury development, located in Pyla, Larnaca area, 1.65km from beach, 15mins airport, comm pool, white goods, gym, sauna, jacuzzi, etc, strong rental yields. Net prices 2 beds from €95,900, 1 beds from €62,300.

[Nigel Howarth]

Hi Martin and welcome to the forum.

I suggest that you approach this with extreme caution (these properties are also being marketed by a company called 'Rose Financial Planning').

According to the RICS (Cyprus) Property Price Index, you can expect somewhere between 3.0% and 3.3% (not 12.84%) - see http://www.news.cyprus-property-buyers. ... /id=007446 and you will probably do worse than this as they are holiday homes not permanent homes.

Unless you are permanently resident in Cyprus, and use this property as your sole residence you will not be able to reclaim the VAT.

I also notice there are no sizes of the properties mentioned in any of the promotional material I've seen.

Guaranteed rentals are usually added into the price of the property to make you think you are getting a bargain, when in fact you are not.

As Pan has already said, talks of theme parks start the alarm bells ringing!

Take care and make sure you do plenty of homework and download a copy of my free guide from http://www.news.cyprus-property-buyers. ... /id=007446

Regards,

[leelussier]

Martin,
As you are aware, due diligence is required for every investment without expectation.
The marketing company is the Cyprus Holiday Group and the developer is Oceanic Developers Ltd. Regardless of who is marketing the property to you, your lawyer will only be concerned with who the parties are on the contract. Get to know who these parties are. On that note, only what is in your contract is of importance so ensure that whatever is negotiated is included.
The VAT is recoverable if the property is for operating as a short term holiday rental and managed by an established Cypriot property management company;
Apartments vary from 1 bedroom with a total covered area of 48 m2 to 2 bdrm 95 m2.
In Jan 2009, a proposed Disney theme-like park was announced to be built in Pyla. The development is not saying that they are building it only that it is something that has been proposed and therefore a possible attraction.
Almost everywhere in the world, property is falling and is related to the 'discount' being offered. This is an opportune time to buy, in my opinion. If you like Cyprus, then you should compare advertised rents comparable to this area. Larnaca rents are around €6.12 - 6.89 /m2 according to the Global Property Guide (24Jan2011)
Contact me if you would like to further discuss this. I have no ties to this development other than as a potential investor.

[leelussier]

http://www.news.cyprus-property-buyers. ... a/id=00712

[Nigel Howarth]

Dear Martin,

I suggest you also read the list of upcoming projects in the Larnaca area (and that includes Pyla) that you can see at http://www.news.cyprus-property-buyers. ... /id=007742

If you want to know what rental returns are, RICS (Cyprus) has just published the sixth edition of their Property Price Index at http://www.news.cyprus-property-buyers. ... /id=008221

This gives rental yields in Larnaca at 3.4% (or €5.21/sqm/month)

Finally, on the subject of reclaiming the VAT, here is an article from the Financial Times (original can be found at http://www.ft.com/cms/s/2/c539ecf8-938c ... z1OzC8qU5M )

• Am I due VAT refunds from holiday homes?
  
  I own furnished holiday lets in Portugal and southern Cyprus and have a tax question. The sales contract for my Cypriot property showed the purchase price as being inclusive of value added tax (VAT). Given that my sole purpose in acquiring this property was to run a business providing furnished accommodation for tourists, I’m wondering now whether I can recover back the VAT element within the purchase price. I’ve heard anecdotal evidence that this is possible for non-residents of Cyprus, but I’m unsure of the process.
  
  If this is viable, does it follow that I could pursue the same line of VAT recovery with my Portuguese property, which is also let out to tourists?
  
  Stephen Coleclough, tax partner at PwC, says the purchase of property with the aim of running it as a holiday let business anywhere in the European Union will usually attract local VAT.
  
  However, the purchase of a residential property to be used by the owner of the property will be exempt from VAT. In Cyprus, there is also a VAT grant scheme for newly-constructed residential buildings, but it sounds as though this is unlikely to apply in your circumstances.
  
  If your taxable income is above €15,600 a year, you will need to register for VAT in Cyprus but it is also possible to register for it voluntarily if your taxable income from the property is expected to come in below this. When registered, you will need to charge Cypriot VAT on any rental income coming in from the supply of holiday accommodation to customers, at the rate of 15 per cent. There is no need to have a business in Cyprus to register.
  
  If you do register for VAT in Cyprus, you will be entitled to recover the full amount of this tax incurred in the purchase of the property. You should ensure that you obtain a VAT invoice for the purchase of the property, which the seller is obliged to provide you with if VAT was charged.
  
  In Cyprus, if the amount of VAT you have incurred on purchases exceeds the VAT that you charge on your sales, the excess is rolled forwards against your future VAT liability. However, where the excess VAT incurred is an amount that has been incurred on capital assets, the excess VAT can be recovered.
  
  The same treatment will also apply for properties in Portugal. If you are making supplies of holiday accommodation from a Portuguese property, you will be entitled to register for VAT here. This would again allow you to recover the VAT incurred that relates to your supply of holiday accommodation. The Portuguese VAT registration threshold is €10,000, but if your supplies are below €10,000 you will still need to register, although there is an exemption that can apply.
  
  The main issue to consider is private use by you – for example, if you or your family use the property at any time during the year without paying rent.
  If you do use the holiday accommodation for yourself or your family, you would need to restrict your recovery of VAT on the purchase price because part of the price paid would relate to your private use.
  
  Alternatively, you could always issue an invoice to yourself and pay VAT upon this supply of holiday accommodation to yourself!

Regards,

[leelussier]

I just returned from viewing this development. I had contacted a representative of the marketing company, The Cyprus Holiday Group, 36 hours in advance but didn't expect much as I would arrive on Sunday; I was not disappointed.
Landcase Development Ltd. S. Kassianos Estate, located at 41 Markario Avenue III was also closed.
From the Golden Bay Hotel, where I stayed, the site is directly north by a 15-20 walk.
I stopped to speak with the neighbour to the south east who informed me that there had been no activity for nearly two years. The site is totally over-run with vegetation with no signs of work being done, tools or advertisment signs. The gentleman inquired as to the prices and when I answered he scoffed and offered to sell me his house.
I took some pictures of the development but the representation on Google Earth is accurate: 34°59'31.33"N 33°41'28.43"E
I also took a picture of the sheep grazing in the neighbouring harvested hay field. The adjacent field had been corn. I didn't see the sea from where I stood and wouldn't describe the view of the hills breathtaking. It difficult to see this site as a short term holiday or business residential site. The reduced prices are definitely reflective of the area market.