Cyprus authorities prepare strict measures against circumventing restrictions on property purchases by foreigners

The Minister of Interior of Cyprus, Constantinos Ioannou, informed the parliamentary committee that the government intends to combine three bills aimed at closing legislative loopholes that allow foreigners to indirectly acquire property through Cypriot companies and other intermediary structures.

According to the minister, in recent years such schemes have been used increasingly amid geopolitical instability in the region. The new measures, Ioannou emphasized, should ensure a balance between protecting public interests and maintaining social stability.

It is noted that current legislation clearly regulates the purchase of property by foreign individuals, but practically does not cover legal entities, creating legal loopholes and ambiguous interpretations.

The bills, introduced by AKEL Secretary General Stefanos Stefanou and a group of deputies, provide for:

• refusal to register property transactions if they violate the law on property acquisition by foreigners;
• repeal of provisions allowing indirect property purchase without Cabinet approval;
• implementation of additional control mechanisms;
• updating rules so that Cypriot companies cannot act as intermediaries in property purchases by foreigners.

The chairman of the parliamentary committee, Aristos Damianou, stated that a fundamental agreement has been reached on the initiative, and the goal is to bring the bill package to a plenary session before the current parliament’s term ends.

The Ministry of Interior is also working on a new framework document, which envisages:

• clearer definitions of concepts related to property acquisition;
• establishing maximum allowable areas;
• temporary restrictions between repeated applications;
• prevention of abuses, including conversion of residential properties to commercial use;
• possible restrictions on property purchases in zones sensitive in terms of security and public interest.

The Ministry of Finance stated that it supports the Interior Ministry’s proposals. At the same time, a representative of the Employers’ Federation (OEB) suggested allowing foreigners to acquire no more than two plots or residential properties with a total area of up to 4,000 sq. meters, while excluding beaches from possible restrictions.