In Cyprus, three bills, submitted by members of parliament from various parties, aim to introduce restrictions and tighten controls on the acquisition of real estate by foreigners. Two bills were proposed by the AKEL party, and one by members of the DISY, DIKO, and DIPA parties. All initiatives concern amendments to the Law on the Acquisition of Real Estate (by Foreigners).
The main provisions of the draft laws of the AKEL
The first draft law, AKEL, aims to modernize the current law on real estate acquisition by foreigners. Key proposals include:
- Expanding the definition of “foreign-controlled company” to include organizations where the beneficial owner is a foreigner in accordance with the provisions of the Money Laundering Prevention and Combating Act;
- Clarification of existing restrictions on the acquisition of real estate by foreigners, including companies registered in Cyprus or the EU;
- Establishing clear criteria, restrictions and conditions for the acquisition of real estate by foreigners through regulations approved by Parliament;
- Elimination of outdated and unclear provisions regarding the purchase of large plots of land by foreigners;
- Introduction of a provision according to which the permission of the Council of Ministers will not be required if the acquisition of real estate by a foreign individual concerns the purchase of an apartment or residential building with an area of up to 200 sq.m., a store with an area of up to 200 sq.m., or an office with an area of up to 300 sq.m.
- Introduction of a provision according to which a legal entity controlled by foreigners may acquire a store of up to 200 square meters or an office of up to 300 square meters without the permission of the Council of Ministers.
- A ban on the acquisition of forest or agricultural land, as well as real estate near the ceasefire line and critical facilities.
It is expected that these measures will improve the effectiveness of the application of current legislation and prevent roundabout schemes for the acquisition of real estate by foreigners.
Restrictions on transactions and transfers of real estate
The second bill, AKEL, aims to amend the Real Estate Transfer and Mortgage Act. It stipulates that the Director of the Land Department will not be able to register real estate transactions that violate the restrictions set forth in the Real Estate Acquisition (by Foreigners) Act.
The goal is to strengthen oversight of the legality of transactions, prevent the acquisition of real estate through intermediaries and companies, and ensure transparency of the actual owners of legal entities involved in transactions.
Additional restrictions
The third bill, signed by the deputies DISY, DIKO and DIPA, again aims to amend the “Acquisition of Real Estate (by Foreigners) Act” and proposes:
- Restriction on the acquisition of one apartment or house by a foreigner on one plot of land;
- For legal entities, at least 51% of the capital or voting rights must be owned by citizens of Cyprus, the EU or the EEA;
- Prohibition on the acquisition of forest and agricultural land by foreigners.
These measures are aimed at preventing the establishment of Cypriot companies as intermediaries for foreign buyers and at protecting the rural sector.
New legislative initiatives underscore the Cypriot Parliament’s commitment to ensuring transparency in transactions, protecting rural land, and effectively overseeing foreign real estate acquisitions. The adoption of these bills will have a significant impact on the residential and commercial real estate markets, as well as the island’s investment attractiveness for foreign nationals.
