Cyprus is facing growing scrutiny over its lack of oversight in the property sector, as a surge in real estate acquisitions by foreign buyers—often through Cypriot-registered companies—raises questions about transparency, legal loopholes, and long-term consequences for local communities.
In a recent Kathimerini article, former MEP Takis Hadjigeorgiou described his year-old conversation with a top government official about the state’s awareness of the issue. His key question: Does the government know who owns what?
The official’s response was both casual and alarming, suggesting that while the trend is known, most purchases are happening through companies—making it nearly impossible for the Land Registry to identify the ultimate owners.
Loopholes and Silent Transfers
Under Cypriot law, third-country nationals are permitted to purchase just one residential and one commercial property. However, these limits are being bypassed by two key tactics:
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Company Takeovers – Foreign investors acquire existing Cypriot companies that already own property. The legal title doesn’t change hands, but effective ownership does.
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Proxy Ownership – A Cypriot sets up a company, purchases property, and later transfers the company’s shares to a foreign buyer—again skirting restrictions while appearing legal on paper.
These schemes are fuelling a rapid expansion of foreign-controlled property development, especially by non-EU nationals. Many operate under the radar, purchasing land, renovating buildings, evicting tenants, and reselling or renting at inflated prices. The result: soaring prices, rising rents, and locals being priced out.
Impact on Society
The issue goes beyond economics. It’s a growing social concern, especially in areas where entire blocks are being bought out by foreign-backed developers. Residents face displacement, while the state remains largely in the dark about who owns these properties, their true nationalities, or the source of their funding.
Analysts like Pavlos Loizou of Ask Wire point to the gap between reported ownership and actual control. In Limassol, for instance, 2,561 properties are listed as sold to Russian nationals—but only 1,292 have title deeds, suggesting many are still under development or in corporate ownership limbo.
Additionally, some transactions—like high-value real estate sold by banks or assets moved through company share sales—aren’t captured at all by the Land Registry.
Urgent Need for Reform
The lack of a centralised, transparent system to track property ownership has prompted calls for immediate legislative reform. Hadjigeorgiou argues that corporate transparency in real estate is vital—not only for market stability, but also for national sovereignty and social equity.
The issue has gained political attention, with AKEL General Secretary Stefanos Stefanou voicing concern over the unchecked influx of foreign ownership and its long-term effects.
“Transparency isn’t optional—it’s essential,” Hadjigeorgiou insists, urging lawmakers to act retroactively to close loopholes and ensure fair regulation.
Source: Cyprus Property News