Philenews

Affordable Housing or Uncontrolled Investment? Addressing Regulatory Gaps in Cyprus

Published January 4, 2026, 05:00
Affordable Housing or Uncontrolled Investment? Addressing Regulatory Gaps in Cyprus

Affordable housing in Cyprus is not primarily threatened by development, but by the lack of effective control over property transactions by non-Cypriot citizens. Most purchases are for investment purposes rather than owner-occupation, putting pressure on prices and rents, with potential negative consequences for social cohesion. The law regarding the acquisition of property by foreigners (Chapter 109) requires a permit from the District Officer, which is often circumvented in practice. Sales agreements are signed and possession is handed over before the permit is approved, rendering the control ineffective. Furthermore, the legislation is bypassed through the use of Cypriot companies, allowing foreigners to acquire property without being subject to the restrictions applicable to individuals. This raises concerns, especially in areas near the green line, where issues of national security arise. The effective operation of the Companies Supervisor is crucial to prevent tax evasion. The transfer of shares in companies that own property should be conditional on proof of payment of due taxes. Also, the application of the reduced VAT for primary residence should be linked to proven residence and not just a statement of intent.