A new report from the Cyprus Audit Office has revealed serious deficiencies in the framework governing property sales to third-country (non-EU) nationals, citing legal loopholes, weak oversight, and outdated systems. The findings raise strategic concerns for the country and have prompted a call for urgent policy reform.
The Corporate Loophole and Underestimated Data
The report highlights a key legal loophole, created by a 2011 amendment, that allows EU-based companies controlled by third-country nationals to bypass property acquisition restrictions that apply to individuals. This means foreign interests can effectively circumvent rules intended to manage property ownership by non-EU citizens.
As a result, the Audit Office warns that the official statistic that 27.35% of property sales in 2024 involved third-country nationals is “misleading” and a significant underestimate. The current figure fails to account for the large number of purchases made through these corporate structures.
Systemic Weaknesses in Oversight
The investigation uncovered several other critical flaws in the supervisory mechanisms:
- A lack of effective checks on the origin of funds used for property purchases.
- No objective criteria for assessing the financial status of applicants.
- The IT system used to manage the process has been outdated since 1999.
- No substantial monitoring of how properties are used after they have been acquired.
Call for a Modernized Policy Framework
The Audit Office stressed that the current restrictions on foreign property ownership are largely “superficial” and easily bypassed. It has called for the creation of a new, modernized legal framework with clear objectives that align with EU law and protect the economic, geopolitical, and strategic interests of Cyprus.
The report notes that most other EU member states have already adopted restrictions on property acquisition by third-country nationals for reasons of public security or strategic interest—restrictions that Cyprus has not yet implemented.
Source: Cyprus Property News