Cyprus has collected €2.21 million from developers using planning incentives to support affordable housing, the Interior Ministry says.
The €20 million previously reported as collected is potential income linked to applications at different stages of assessment. It has not yet been received by the Cyprus Land Development Corporation (KOAG).
The expected payments depend on the progress of the developments. So far, 23 planning permits have been issued under the scheme, allowing a combined 21,024.95 square metres of additional building area.
How the Cyprus affordable housing scheme works
The scheme gives developments extra building density in return for providing affordable homes or making a financial contribution. Developers can choose between these options, subject to the scheme’s conditions.
Of the 23 permitted developments, eight will provide homes for sale at a set price of €1,650 per square metre. Eleven will make a financial contribution only, while three will provide homes and pay money. One further development will offer rental homes at 70% of the local market rent. The Department of Lands and Surveys reviews market rents at regular intervals.
The different arrangements mean that not every development will directly add homes for sale or rent.
Payments follow building permit approval
A financial contribution must be paid before a building permit is issued, after the relevant District Local Government Organisation has assessed the application. A planning permit alone does not mean that the contribution has been collected.
(As reported by the Cyprus Property Developers Association, administrative delays in issuing building permits (a) delays construction work (b) increases the cost of housing (c) reduces the supply of new housing.)
Three developments using the financial contribution option have so far obtained both planning and building permits. They have paid €2,209,134.15 in total. Further income depends on the progress of permits and construction. KOAG is considering how it might use funds raised through the scheme.
Affordable homes are planned across three districts
The minister has identified five permitted developments with some of the largest planned areas of affordable housing. They are in Kato Polemidia, Ypsonas and Livadia, as well as the Panagia area of Nicosia and Apostolos Loukas in Aradippou.
The planned affordable housing areas include:
- 682 square metres in Kato Polemidia
- 491 square metres in Ypsonas
- 527 square metres in Livadia
- 404 square metres in Nicosia
- 400 square metres in Aradippou.
KOAG is expected to offer the homes at €1,650 per square metre once the developments are complete.
These figures refer to homes planned for future delivery, not properties that have already been completed or handed over. KOAG’s own developments in Kaimakli, Aglantzia and Strovolos have separate permits and are not included in the 23 developments using the incentives.
