A new report by the Cyprus Audit Office highlights serious gaps in the property acquisition framework for third-country nationals, exposing outdated systems, legal loopholes, and weak oversight. The findings raise strategic concerns for the Republic of Cyprus and call for urgent policy reform.
Legal gaps and loopholes
According to the law, third-country nationals are permitted to acquire immovable property only for purposes of residence, professional premises, or industrial development, subject to restrictions on the number and use of such properties.
However, a 2011 amendment – introduced to align with EU law – removed these restrictions for EU-based companies, including Cypriot companies, even when controlled by third-country interests. This development created a “loophole” that remains open.
Furthermore, a 2013 circular that gave an “investment” character to property purchases encouraged commercial exploitation. The Audit Office stressed that issuing such flexible circulars without changes in the law raises questions of legality.
Third-country figures underestimated
Based on 2024 data, 27.35% of all property sales involved third-country nationals. However, the Audit Office considers this percentage “misleading” and significantly underestimated, as it does not include companies owned by third-country nationals operating through EU or Cypriot structures.
Oversight weaknesses
The Audit Office also identified serious flaws in supervisory mechanisms:
- No objective criteria exist for assessing the financial status of applicants.
- There is no effective check on the origin of funds used.
- The IT system “Third-country Nationals” has remained outdated since 1999, with upgrade efforts still pending.
- No substantial monitoring of property use takes place after acquisition.
Strategic concerns
The report stresses that current restrictions are largely superficial, as they can easily be bypassed through EU-based companies. At the same time, there are no reliable figures on the real percentage of property owned by third-country nationals.
The Audit Office recommends the creation of a new policy framework with clear objectives, taking into account the economic, geopolitical, and strategic interests of the Republic of Cyprus. This requires a modernised legal framework fully aligned with EU law.
Most EU member states have already adopted restrictions on property acquisition by third-country nationals, citing reasons of public security, health, or strategic interests – restrictions that Cyprus has not yet implemented.
(Translated & summarised from an article in Simerini)
Nigel, the articles are repetitive, 10 articles on the same subject. We understood.
This comes from a different angle – a report on the subject by the Audit Office.
If you wish to read the 35 page report (it’s in Greek) – click here.