Cyprus

Cyprus is the third largest island in the Mediterranean, sitting between the south coast of Turkey and the western shore of Syria. It has long been a popular tourist destination, with western Europeans among the most frequent visitors.

North/south divide

The island has been divided in two since a Turkish invasion in 1974. The Republic of Cyprus - forming roughly 60 per cent of the south of the island - joined the EU in 2004, and has proved to be the more accessible region.

In contrast Turkish-occupied northern Cyprus has proved to be less attractive to tourists. Yet, it does have a developing investment market, with prices often substantially lower than comparable property in the south.

This situation has left the capital, Nicosia, as the last remaining divided capital in Europe.

Fluctuations in tourist numbers can be expected to accompany political developments between the two regions.

European south Cyprus

The population of Cyprus as a whole remains under one million, leaving some areas of the island totally unspoilt. There is also little crowding, congestion or crime.

Investors have been drawn by the European property investment system which is in place, the polished and developed service sector and the island's low taxation.

These factors are accompanied by slow, but consistent, growth in property prices.

The climate in Cyprus has also proven attractive - with 340 days of sunshine annually – and given the island a strong, year-round tourist market.

The main language spoken is Greek, but German and English are also common in tourist areas.

Over 30 international airlines also fly to the island's two main airports, Larnaca and Paphos.

Property prices can vary across Cyprus, depending type and location, but key investment areas are located around the most popular tourist resorts, including, Paphos, Limassol and Larnaca.

However, according to Cyprus-Property-Guide.com, investors can expect to pay an average of £45,000 - £105,000 for an apartment, £120,000 -£200,000 for a bungalow and £95,000 - £110,000 for a maisonette on the island.

Furthermore, townhouses usually cost around £95,000 - £110,000, whereas villas can be had for £135,000 upwards.

Concerns have been raised about the possibility of purchasing renovation property on the island, as a shortage of skilled builders can make work expensive.

Finally, Cyprus is scheduled to take the euro on January 1st 2008, with prices expected to rise. As such, investors looking for property on the island should consider making a purchase sooner rather than later.

Turkish-occupied northern Cyprus

Northern Cyprus also has attractions for both investors and tourists.

Up to 90 per cent of the population speak English, motorists drive on the left, the climate mirrors that of southern Cyprus and the costs of living are substantially lower than the UK.

UK pensions received in northern Cyprus are also tax free.

However, systems for buying property are slightly different in Turkish-occupied northern Cyprus, and is less advanced than a number of other places in the region.

Firstly a purchase permit must be obtained from the Council of Ministers, stating the intention to make an acquisition.

Next, a deal has been agreed, before the transfer of ownership is enacted by registering the purchase with the District Lands' Office (DLO).

An application form must be presented in person to the DLO, along with the purchase permit, registration certificate of the property and evidence of payment of all property taxes to date.

This process may take 12 months and cost £2,000 in fees.

Buyers also pay five per cent VAT on all property purchases.

Yet, prices can be as much as 50 per cent cheaper than the in the Republic of Cyprus, according North-Cyprus-Properties.com.