A single bill that would limit property purchases by non-EU nationals is expected to be brought to the full House of Representatives for a vote before Parliament ends in mid-April.
The bill combines four different proposals into one. Today, the House Internal Affairs Committee looked at it again. Members agreed to join the four proposals together because they were very similar. They also added suggestions from the Ministry of the Interior to create one clear and complete draft.
The Chair of the Committee, Aristos Damianou, said the new draft should be ready within two weeks. After that, it will be discussed and voted on quickly, so it can be approved before the current Parliament finishes its term.
Dutch disease warning for the Cyprus economy
During the meeting, Michalis Persianis, President of the Fiscal Council, warned that Cyprus does not have a clear plan for managing foreign investment, especially in property.
He said this could lead to what is called “Dutch disease.” This happens when too much foreign money flows into one sector, like real estate, and harms the rest of the economy.
He warned that large amounts of foreign money coming in, without strong controls, could create social problems and economic risks. He said Cyprus is already starting to show signs of this problem and that the government should act quickly. He added that limiting property purchases by non-EU buyers would be a good first step.
Ministry reservations and technical hurdles
A representative from the Ministry of the Interior shared some concerns about how the new law would work.
The Ministry is worried about:
- How to clearly define who can and cannot buy property
- Possible delays at the Land Registry, which would check these purchases
- The fact that some important rules are currently set through regulations instead of law, which takes longer to change
The Ministry suggested that these rules should be written directly into the law to make the process faster and clearer.
There were also concerns about how to control property owned by companies, which can be more complicated.
Fragmented public records system
Officials from the Registrar of Companies said there is currently no official certificate that clearly shows who the real owner (beneficial owner) of a company is, as some proposals suggest.
They also explained that different government departments do not have fully connected digital systems. This makes it harder to quickly check information about company owners and shareholders. This could make it more difficult to enforce the new rules.
Concerns from lawyers
The Cyprus Bar Association also expressed concerns about how wide the restrictions would be.
Issues being discussed include:
- What types of property would be restricted
- The maximum size of land allowed
- Whether there would be limits in certain areas
- Properties sold by investment funds with non-EU shareholders
- Sale contracts already filed at the Land Registry involving companies owned by non-EU nationals
Rising prices and land in non-EU hands
After the meeting, Mr Damianou said that a large amount of land in Cyprus is now owned by non-EU nationals. He said this is sensitive because of Cyprus’ political and geographic situation.
He also connected foreign property purchases with rising prices, especially in cities. Housing has become much more expensive, making it harder for Cypriots to afford homes.
However, he said it is positive that many groups, including the Ministry of the Interior, generally agree with the proposals. He has taken responsibility for combining the four proposals into one final draft and has been holding meetings to make sure the government supports it.
The updated proposal is expected within about 15 days, so Parliament can vote before it dissolves.
Reinstating stricter controls
Mr Damianou also said that in the past, Cyprus had clearer and stricter rules about property purchases by non-EU nationals. Over time, government decisions made those rules more relaxed. This allowed non-EU buyers to purchase many types of property, including beachfront land and hotels.
He said this must stop. The new law would set firm limits on the type, size, and location of property that non-EU nationals can buy. This would be a major change in the Cyprus property market.
