Changes in Property Acquisition Rules for Non-EU Citizens in Cyprus

While EU citizens enjoy the freedom to purchase unlimited properties in Cyprus, non-EU nationals remain subject to legal restrictions on property ownership. These limitations stem from the Acquisition of Immovable Property (Aliens) Law, Chapter 109, which has governed foreign property purchases for decades.

Evolution of Property Ownership Rules

  • Before 2004 (Pre-EU Membership): Cyprus imposed strict controls on all foreign buyers, including EU citizens.
  • After EU Accession (2004): These restrictions were lifted for EU citizens, but non-EU nationals continued to face limitations, such as size restrictions on land purchases and the requirement for government approval.
  • To circumvent these restrictions, many non-EU nationals have opted to purchase property through Cypriot-registered companies, which are legally treated as local entities. This loophole allows them to acquire multiple properties without limitations.

    Concerns Over Rising Property Prices

    This practice has significantly impacted the real estate market, contributing to rising property prices and making homeownership increasingly difficult for local buyers, particularly young families.

    The House Interior Committee recently debated this issue, reviewing a proposed legislative amendment introduced by Famagusta DISY MP Nikos Georgiou. The proposed law aims to modernize regulations on foreign property acquisitions while addressing concerns over affordability and market stability.

    Key Insights from the Discussion

  • Foreign Buyers Dominate the Market: Between January and October 2024, 40% of property sales recorded at the Land Registry involved foreign buyers. However, the actual figure is believed to be higher, as companies owned by foreign nationals but registered in Cyprus are classified as Cypriot entities.
  • Housing Becoming Unaffordable for Locals: Many urban centers across Cyprus have become financially inaccessible to average Cypriots, as wealthier foreign investors continue to acquire prime properties and land.
  • Proposed Legislative Changes

    To tighten oversight on foreign property purchases, the proposed amendments include:

  • Enhanced due diligence requirements for lawyers, accountants, and real estate agents to verify foreign buyers’ backgrounds, aligning with anti-money laundering regulations.
  • Stronger enforcement measures to prevent the misuse of company structures for circumventing property ownership restrictions.
  • Recent Legal Cases Highlight System Gaps

    The discussion was further fueled by recent cases exposing loopholes in the current system. Notably, the sons of Simon Mistriel Aykut, who is wanted for property usurpation in occupied Cyprus, managed to acquire assets worth €1.2 million in Larnaca and Nicosia via a Cypriot-registered company before authorities intervened and froze the assets.

    Global Comparisons & Precedents

    Cyprus is not alone in seeking stricter controls on foreign property ownership. Several EU nations have implemented restrictions for economic and national security reasons:

  • Finland is currently considering tougher property laws due to national security concerns.
  • Greece requires special permits for property purchases in border regions.
  • The UK enforces strict taxation and anti-money laundering regulations on foreign investors.
  • As Cyprus evaluates these legislative amendments, the goal is to strike a balance between encouraging foreign investment and ensuring housing affordability for local residents.

    Source: www.news.cyprus-property-buyers.com

    Compare listings

    Compare
    error: Content is protected !!