land purchase — Cyprus is set to revise its land purchase rules for non-EU buyers as the government seeks to address growing concerns over increased property acquisitions by third-country nationals. The Ministry of Interior is currently drafting a revised framework aimed at closing legal gaps while ensuring that investment activity remains unharmed.
Land purchase: Government Aims for Legislative Clarity
Interior Minister Constantinos Ioannou informed the House interior committee that the new framework will modernise existing legislation governing foreign property ownership. Among the key considerations is the need for a clearer definition of property acquisition and limitations on the size of land that can be purchased.
“We will aim to more clearly define the term for acquiring real estate and the maximum area of real estate that can be acquired,” said Ioannou. The minister also mentioned that the authorities are contemplating the introduction of a time limit on applications to prevent potential abuse of the system and ensure that residential properties are not converted into business activities.
Restrictions in Urban Zones and Security Areas
In addition to defining property acquisition more explicitly, the government is also reviewing restrictions in specific urban zones and areas linked to security or public interest concerns. This holistic approach aims to balance the attractiveness of the Cypriot property market with the need for social cohesion and national-interest protections.
Ioannou has proposed combining three parliamentary bills into a single legislative text to be examined alongside the ministry’s amendments. This initiative has garnered support from various MPs, including Akel secretary-general Stefanos Stefanos, who emphasised the necessity of stricter controls over property transfers, particularly in areas where existing restrictions apply.
Efforts to Prevent Indirect Acquisitions
The proposed measures also aim to abolish provisions that allow indirect property acquisition without the Council of Ministers’ permission. Moreover, effective control criteria will be introduced to prevent the use of Cypriot companies as intermediaries for foreign buyers, thus safeguarding agricultural and rural communities.
“Our objective is to produce a unified amendment that will provide the best possible shielding of the framework,” stated Ioannou. This approach is designed to prevent adverse impacts on local communities while still being open to foreign investment.
Support from the Finance Ministry
The finance ministry has expressed support for the reform, reiterating that the primary aim of the law is to protect strategic sectors and national infrastructure. “The intention is not to impose a general ban on property ownership but to safeguard our national security and public order,” a ministry spokesperson noted.
Impact of Geopolitical Developments
Rising property purchases have been attributed to recent geopolitical developments, particularly the ongoing Russia-Ukraine war. The minister acknowledged that while the law sets clear limits for natural persons, it struggles to regulate legal entities effectively. He pointed out existing transparency and interpretation gaps that need to be addressed.
Proposed Limitations on Property Acquisitions
The employers and industrialists federation (Oev) has proposed allowing foreigners to acquire up to two plots or residential units, with a maximum land area of 4,000 square metres. They have also requested that coastal areas remain exempt from potential prohibitions, citing the importance of maintaining the attractiveness of Cyprus as a destination for foreign investment.
MP Georgiou acknowledged the necessity of restrictions but cautioned that they must be implemented with care. “Our aim is not to harm foreign investments,” he stated, adding that land ownership in a politically sensitive region like Cyprus requires additional safeguards.
Current Land Acquisition Procedures
Under the current rules, foreign nationals from outside the European Union, including foreign-controlled companies, must obtain a permit from the relevant district administration before acquiring immovable property in Cyprus. The application process involves submitting form COMM 145 along with supporting documentation, which typically takes between two and three weeks for examination.
Foreign buyers can obtain permission for either a plot of land of up to 4,000 square metres for owner-occupation or up to two residential units in different developments. These units may consist of two residential properties, or a residence combined with a shop of up to 100 square metres, or a residence combined with an office of up to 250 square metres. For couples, the limit applies jointly.
Ensuring Transparency in Transactions
Supporting documentation for applications includes title deed copies, zoning and building permits, stamped contracts of sale, architectural plans, proof of financial standing, and passport copies. For company acquisitions, registration certificates, shareholder details, and corporate activity information must also be submitted.
As the Cypriot government moves forward with these proposed changes, it aims to strike a balance between attracting foreign investment and protecting the interests of its citizens and strategic sectors. The legislative framework is expected to be scrutinised closely as it progresses through the parliamentary process.
