Russian elites flight to Cyprus picked up pace by 4 times
Wealthy Russians get aggressive on buying real estate in Europe amid the stagnation of domestic economy and a new wave of relations with the West deteriorating.
Annual results reveal that the number of requests from Russians to buy European properties soared in 2017, according to the international real estate agencies.
The most popular investment destination is Cyprus with demand rising 4-fold. In 2017, the island’s authorities cancelled the property tax, and a year earlier, removed the lower threshold for investment in exchange of EU citizenship.
From now on, when buying real estate, foreigners have the right to obtain citizenship to their spouses, children under the age of 28 and parents. They are also free of taxes on dividends, interest on bank deposits and rental income. The Cypriot authorities also exempt buyers from taxes on the transfer of ownership when purchasing new, and reduced this type of taxation from 8% to 4% for the second-hand market.
«Russian customers mostly bought houses in Limassol with a budget of EUR 1 to 5 million in new developments near the sea. There was also a high demand for the office properties in Limassol,» the real estate agents comment.
The number of requests for the acquisition of properties in Switzerland tripled over the last year. Russians showed interest both in residential estate for relocation and in commercial properties. Most often these are offices with tenants, of which there are very few on the market, experts say.
In housing market, demand doubled in Germany, France, Italy and Malta. In Berlin, for instance, Russians preferred investing in new apartments buying 3 to 5 properties with a total budget of EUR 1–2 million. In France, popular properties are found in sea-side Cannes, while in Italy — near the lakes of Como and Garda.
The demand also grew for housing in London: on average, Russians are prepared to spend from 2 to 10 million pounds on properties either for primary personal residence or for temporary location to educate their children.
Wealthy Russians paid particular attention to the structure of transactions and the optimisation of taxation (covering issues of the automatic exchange of information, declaring foreign accounts and the controlled foreign companies). They took an early interest in how to conduct the acquisition so that it does not entail a tax trail in Russia.