Buying a vacation propertyhas becomemorethanjusttrendy- it has becomean important partof anyone'sfinancial portfolio. People fromWestern countriesare increasingly;snapping up vacation properties in the Caribbean, the Mediterranean, and otherchoice locations in warme;r;climates.

One islandthatis seeing renewed interest is Cyprus. Being a relativelynew member of the EuropeanCommunity, Cypruspropertyare alsoseen a surgein demand becauseEnglishis widelyspokenas a second language.

Being partof the EEC is expectedto be a precursor to increasedpropertyprices, making Cyprusan excellent long-terminvestmentfor real estate. The stableeconomy is expectedto continueto grow as a result. Investmentproperties in Cyprusare liketax havens Theexcitingnews for any propertyinvestor is thatCyprusis almost likea tax haven within;the EuropeanCommunity.There is no inheritance tax or gifttax, pensions fromabroadare taxedat a flatrateof just5%, interest earnedon foreigncapitalimportedinto Cyprusis tax exempt, and investmentincomeremitted to Cyprusby foreignnations is taxedat a flatrateof 5%. Eventhe corporatetax rateis a flat10%. Cyprusalsohas signeddouble taxation agreements withmany countries, includingthe UnitedKingdom. A Capital Gains Tax of 20% is payableon the saleof immovable propertyin Cyprus, but no capitalgainstax is payableon gainsfrominvestments;. Personalincometax ratesrange form 0 - 30%.

Interestingly, there is increasingdemand for Cyprusproperties fromnon-traditionalsources, includingthe Middle East,Russia and its former statesand UnitedStates, as well. Accordingto GlenYoungof SunSeakerProperties, the islandhas the dual benefits of being popularfor both retireesand vacationers. Retirees buy propertyin Cyprusfor their own use, largely to bask in the warmMediterranean sun and escape the snow and cold winds of winter. The attraction of Cyprusas a second home (or a new first home)is helpedby a skilled work force, relativelyaffordablepricesand a friendly, welcoming population.

But Cyprusis alsoa populartraveland leisuredestination, withregularaffordableflights frommajorEuropeancities.Visitors lookfor quality accommodation,such as villas and apartments;can offer. ThismakesCypruspropertya good investment, earningan incomeuntilthe ownerwantsto selland cashin...or untilthe ownerdecidesto retire and use the propertyfor his own purposes.

Of course,over 320 daysof sunshinecertainly don'thurt landvalueson this Mediterranean island.

Unlikein many othersunshinedestinations,the legal systemin Cyprusis mostly based on the British legal systemand is designedto safeguard the propertypurchaser.Thismakesit particularly;attractive to UK investors.Once the contractof saleis signedand a deposit is paid,the contractis registeredat the landregistryoffice.Thisprocedureprotectsthe purchaser's ownershiprights untilthe title deeds are issued and transferredto his or her name. The contractin the hands of the LandRegistry cannot be withd;rawn;by anyone,and therefore the propertycannot be leased, sold,transferredor mortgaged.Only the purchaser himselfcan alter this status.

Cyprusinvestmentproperties mightrequire some patience

With so much going for it, even Cyprusis not perfect. Sometimes it doestakepatience to buy propertyin Cyprus. As withmany sunnylocations, the bureaucrats don'talwayssee the need to rush and paperwork can takelonger thanan eager buyer wouldsometimes like.

In the case of buying property"off-plan",it can often takea coupleyearsfor the developmentto be completed...meaningthatthe buyer mightneed some bridge financinguntilthe propertycan be let and incomestartsrollingin. Mortgages,usually up to 75%, are readilyavailable, and the wise investor willlookfor one thatrequiresonly 30% to be paid down over the period of construction, making financingaffordableto average investors.

With a little planning and patience, Cyprusproperties are easyto obtain and promiseto carry a positive returnon investment.Sooner or later, everyoneretires; it's nevertoo early to stakeout an investmentpropertyon yourfavorite Cyprusbeach. Tim Martins