In Cyprus, EU citizens can acquire residential property without restrictions, while third-country nationals face a number of problems. These rules are regulated by the Aliens’ Acquisition of Real Estate Law (Chapter 109), which has been amended at various stages.
Before Cyprus joined the EU in 2004, all foreign buyers, including EU citizens, faced strict restrictions. After the country joined the EU, restrictions were lifted for citizens of member states, but for third-country nationals they remained, including the need to obtain permission from the authorities, as well as restrictions on the size and intended use of the land.
Third-country nationals wishing to purchase property above the established limits can do so by setting up a limited liability company. Such a company can purchase an unlimited number of properties of any size. However, such schemes lead to an increase in property prices, which makes the situation difficult for local buyers, especially young families.
Changes in legislation
The Cyprus Parliament recently debated the issue of modernising the rules on foreign property acquisition. MP Nikos Georgiou of the DISY party (Famagusta) proposed the amendments to the legislation, citing a sharp increase in foreign purchases. He noted that in the first ten months of 2024, 40% of all registered property transactions were concluded with foreign buyers. However, the actual figure may be higher, as companies with foreign shareholders registered in Cyprus are classified as Cypriot legal entities.
Georgiou stressed that the rise of foreign investment in property is making some areas of Cyprus financially unaffordable for most locals, as luxury properties are quickly snapped up by wealthy foreigners.
The proposed changes to the legislation include new requirements for checking potential buyers. Lawyers, accountants and real estate agents will be required to check the origin of foreign investors’ funds in accordance with anti-money laundering regulations.
International examples of regulation
While many EU countries allow foreigners to buy property, some have restrictions. For example, Finland is considering tightening rules for national security reasons, Greece requires special permits for purchases in border areas, and the UK maintains strict tax controls and source checks.
The introduction of stricter regulations in Cyprus could help create a more transparent property market and protect the interests of local residents by ensuring a balance between foreign investment and the availability of property for Cypriots.
