Cyprus Moves to Tighten Property Rules for Foreign Buyers

Based on a report by Cyprus Property Buyers News

A New Chapter in Cyprus Real Estate Regulation

The Cypriot property market is preparing for significant legislative change. Three new draft laws have been submitted to the House of Representatives, aiming to tighten control over property acquisitions by foreign nationals and companies with foreign ownership.

We believe that this is one of the most comprehensive attempts in recent years to rebalance access to Cyprus real estate—seeking a middle ground between attracting investment and protecting local housing opportunities.

Why These Reforms Matter

Over the past decade, Cyprus has become a magnet for foreign investors — from Europeans seeking relocation to non-EU nationals eyeing long-term assets. However, as the market expanded, concerns grew about rising prices, local affordability, and the role of offshore ownership.

According to data presented in Parliament, the scale of foreign land acquisition has now reached levels that warrant stronger oversight. Lawmakers from multiple parties — AKEL, DIKO, DISY, and DIPA — are converging on the idea that a new framework is needed to safeguard housing rights, economic stability, and national security.

AKEL’s Dual Proposals: Stronger Definitions and Stricter Oversight

AKEL’s two proposed bills aim to modernize the Foreign Acquisition Law and close existing loopholes.

The first proposal expands the definition of a foreign-controlled company to include any entity whose ultimate beneficial owner is a non-Cypriot national, even if the company is registered within the EU. In our view, this move targets the so-called “proxy” ownership structures that have allowed indirect foreign control over Cypriot land.

It also sets new, clearer permit criteria for foreign buyers, which Parliament would later define in detail. Importantly, it removes ambiguities around large-scale land purchases — an area long criticized for its lack of transparency.

There are also reasonable exemptions: foreign individuals and companies could still acquire one apartment or house up to 200 m², a shop up to 200 m², or an office space up to 300 m², without requiring Cabinet approval.

However, purchases of agricultural or forest land, or property near the buffer zone or critical infrastructure, would be prohibited, citing national security concerns.

The second AKEL bill amends the Immovable Property (Transfer and Mortgage) Law, empowering the Lands and Surveys Department to block transactions that breach these new ownership restrictions. This, we think, reflects a preventive approach — ensuring compliance from the very first stage of property transfer.

Joint Proposal: Cross-Party Agreement on Tighter Control

In a rare show of cross-party alignment, DIKO, DISY, and DIPA jointly introduced a bill to limit acquisitions by third-country nationals even further.

Their proposal revises the Immovable Property Acquisition (Aliens) Law, stating that non-EU buyers may only purchase one residence or apartment on a single plot. For corporate entities, at least 51% ownership or voting rights must belong to Cypriots, EU, or EEA citizens.

The bill, co-signed by nine MPs from across the three parties, also bans foreign acquisition of forest and agricultural land — a measure that underscores the importance of protecting rural areas from speculative investment.

We believe that this proposal signals a shift toward value-based growth, where sustainable development and community protection outweigh unrestricted inflows of foreign capital.

The Broader Picture: Balancing Openness and Protection

Cyprus’ real estate sector has long relied on international demand. Yet, as the housing market tightens, there is growing recognition that regulation must evolve alongside economic realities.

In our opinion, these draft laws do not represent a move against foreign investors, but rather an attempt to ensure fair play and prevent misuse of local company structures to bypass restrictions.

If implemented effectively, these measures could enhance transparency, strengthen the reputation of Cyprus as a secure and well-regulated market, and contribute to sustainable growth rather than speculative spikes.

What It Means for Buyers and Agents

For real estate professionals, the message is clear: due diligence will become more important than ever. Agents, developers, and legal advisors should prepare for more detailed ownership verification, updated compliance checks, and potentially longer transaction timelines.

We think that MLS-based platforms, such as RealtyHub, could play an instrumental role in this new environment — by improving data accuracy, ownership verification, and compliance visibility across the property chain.

In Summary

Cyprus is stepping into a new era of property governance. These legislative initiatives aim to protect national interests while maintaining a healthy, transparent real estate ecosystem.

As the discussion continues in Parliament, we believe the key to success will be balance: encouraging legitimate investment while preserving opportunities for residents and ensuring long-term market stability.