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Cyprus justice delays weigh on economy and property investment

Nigel Howarth
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Cyprus justice delays weigh on economy and property investment

The EU Justice Scoreboard 2026 has once again exposed one of Cyprus’ most persistent structural weaknesses. Despite years of reform efforts aimed at modernising the judiciary, the Cyprus courts remain among the slowest in Europe, with lengthy delays continuing to undermine economic activity, investor confidence and the wider Cyprus property market.

The latest figures paint a stark picture. While incremental improvements have been introduced in recent years, the data demonstrates that far more ambitious reforms are required if Cyprus is to provide businesses and investors with the legal certainty expected of a modern European economy.

Court delays in Cyprus continue to worsen

The 2026 findings offer little reassurance. In several key indicators, performance has deteriorated rather than improved.

In civil, commercial, administrative and other cases, the estimated time required to resolve disputes increased from around 600 days in 2023 to almost 710 days in 2024, leaving Cyprus with the longest waiting time in the European Union.

The estimated time resolve disputes in Cyprus civil and commercial cases in 2026,
Estimated time needed to resolve civil, commercial, administrative and other cases in 2014, 2022 – 2024

Although Cyprus continues to record respectable clearance rates, these figures tell only part of the story. The substantial backlog of unresolved cases means that progress remains insufficient to reduce waiting times in any meaningful way. For businesses and citizens, the reality is simple: justice continues to be delayed.

Why slow justice matters for the property market

A sluggish judicial system is not merely a constitutional concern; it has direct economic consequences.

When civil and commercial disputes remain tied up in the courts for years, significant capital becomes trapped in litigation. Cash flow is restricted, commercial transactions are delayed and businesses face prolonged uncertainty when attempting to recover debts or enforce contractual obligations.

For the real estate sector, these delays can prove especially damaging. Property developments, contractual disputes, planning challenges and commercial agreements all rely on a court system capable of delivering timely and predictable outcomes. Extended litigation increases financial risk, discourages investment and raises the cost of doing business.

Efficient dispute resolution is a cornerstone of every competitive property market. Without it, confidence inevitably suffers.

Foreign investors need legal certainty

International investors carefully assess the legal environment before committing capital to any jurisdiction.

A country that cannot resolve commercial disputes within a reasonable timeframe inevitably becomes less attractive for foreign direct investment. Investors require confidence that contracts will be enforced efficiently and that legal protection will be available when disputes arise.

This remains one of Cyprus’ greatest competitive challenges. Those promoting the island as an investment destination must increasingly answer a difficult question: why should international investors commit substantial capital when legal disputes may take years to conclude?

In an increasingly competitive global investment landscape, judicial efficiency has become as important as taxation, infrastructure and political stability.

Reform requires stronger political commitment

The challenges facing Cyprus’ justice system are well understood. Numerous domestic and international institutions have analysed the problem in detail over many years. The issue is no longer diagnosis but implementation.

The EU Justice Scoreboard 2026 once again highlights Cyprus’ chronic underinvestment in its judicial system. Public expenditure on the courts remains the lowest in the European Union as a proportion of GDP, while the number of judges per 100,000 inhabitants continues to lag behind many comparable European jurisdictions.

Responsibility, however, extends beyond government alone. The judiciary itself must continue to improve the management of case backlogs, strengthen internal administrative processes, enforce stricter case management and fully embrace digital justice tools to improve efficiency.

Faster justice is essential for economic growth

Addressing judicial delays should now become a national priority.

Both the executive and legislative branches must accelerate reforms that increase the speed of justice without compromising judicial quality or independence. A more efficient court system would strengthen the rule of law, improve business confidence, unlock investment capital and enhance the competitiveness of Cyprus’ property market.

For an economy that depends heavily on international investment, restoring confidence in the justice system is no longer simply a legal imperative. It is an economic necessity.

Limassol Mall approved despite traffic concerns

Nigel Howarth
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Limassol Mall approved despite traffic concerns

The Cyprus Government has approved plans for the long-awaited Limassol Mall, paving the way for a €100 million retail development in the municipality of Amathounta.

However, the decision has sparked widespread criticism from local authorities, business owners and opposition politicians, who argue that the project is moving ahead before essential transport infrastructure is in place.

The Cabinet approved the development by way of a planning derogation, while rejecting a competing proposal for a separate “MyMall Limassol” submitted by Atterbury Europe, the company behind Mall of Cyprus and Mall of Engomi.

Limassol Mall: A major retail investment for eastern Limassol

The new shopping centre will be developed in the commercial and industrial zone of Agios Athanasios by the ownership group behind Nicosia Mall, which includes leading Cypriot business groups such as Zorbas Group, PHC Group, Athienitis Group and VLM Group, in partnership with Papantoniou.

According to the planning documents submitted by the developers, the scheme represents an investment of approximately €100 million, around half of which will be allocated to fitting out retail units. Once completed, the project is expected to create around 1,000 new jobs.

The development will comprise:

  • Approximately 28,434 sq m of leasable retail space
  • Around 76,392 sq m of total covered development
  • Two basement levels, a ground floor, mezzanine and two upper floors
  • Around 90 retail units
  • Six large kiosks
  • Nine food and beverage outlets, including restaurants and cafés
  • A food court with seating for approximately 500 people
  • A five-screen cinema
  • Family entertainment and gaming facilities
  • 1,270 parking spaces

Developers estimate daily footfall of between 6,700 and 11,700 visitors, with an average of approximately 8,800 people per day.

Road improvements formed part of the approval

The approval follows discussions surrounding the long-awaited transport masterplan for Agios Athanasios, which local authorities had consistently argued should be delivered before any major commercial development proceeds.

As part of the project, three new roundabouts will be constructed on the surrounding road network to improve traffic circulation.

However, municipal leaders insist these works alone will not be sufficient.

Infrastructure must come first

Amathounta Municipality has reiterated that it does not oppose investment or economic development in principle.

Instead, its position has consistently been that no planning approval should be granted until major transport projects are either completed or under construction.

The municipality argues that it repeatedly warned the Government that the existing road network is already operating under significant pressure and that approving a development of this scale without wider infrastructure improvements risks making congestion considerably worse.

Among the key projects the municipality says should precede the mall are:

  • The widening and extension of Agios Athanasios Avenue
  • Sustainable transport improvements, including bus priority measures
  • New pedestrian routes and cycle lanes
  • Completion of the Northern Bypass road
  • Additional connecting roads linking Germasogeia and Agios Athanasios

Municipal officials also expressed frustration that they learned of the Cabinet’s decision through media reports rather than formal government communication and say they have yet to receive confirmation that the conditions they proposed have been incorporated into the approval.

In a subsequent statement, Amathounta Municipality stressed that responsibility for delivering public infrastructure lies with the state rather than private developers.

Traffic remains the biggest concern

Transport capacity has emerged as the central issue in the debate.

Local officials note that the Agios Athanasios roundabout already accommodates approximately 110,000 vehicle movements every day, while Limassol continues to struggle with severe congestion across its main road network.

Municipal representatives argue that adding a major regional shopping destination before completing key road upgrades could significantly increase journey times, vehicle emissions and pressure on surrounding neighbourhoods.

They maintain that the development could still proceed successfully, provided the necessary infrastructure is delivered alongside it rather than afterwards.

Historic city centre businesses fear economic impact

The approval has also prompted a strong reaction from traders operating within Limassol’s historic commercial centre.

Representatives of local businesses have written to President Nikos Christodoulides requesting a meeting to discuss the decision, arguing that another large shopping centre risks drawing trade away from established retail streets.

Business owners warn that independent retailers, many of which have only recently recovered from years of economic challenges, could struggle to compete with a modern regional shopping destination.

Several have also questioned the value of public consultation processes if local concerns are ultimately disregarded.

Existing mall owner seeks legal advice

The decision has also attracted criticism from Andreas Hadjimitsis, founder and co-owner of MyMall Limassol.

He said he intends to seek legal advice regarding the conditions attached to the approval, questioning both the speed of the decision and whether sufficient consideration has been given to the area’s existing transport constraints.

While acknowledging that Limassol could support another shopping centre, he argued that its location should minimise impacts on the city’s already congested road network and established retail districts.

Political opposition questions planning strategy

AKEL Limassol has condemned the Government’s decision, arguing that it conflicts with principles of sustainable urban planning.

The party claims the approval prioritises major commercial interests over residents’ quality of life and warns that increasing dependence on private car travel runs counter to modern European planning policies.

It also argues that the development could place additional pressure on small and medium-sized businesses while increasing congestion and environmental impacts.

Instead, AKEL is calling for greater investment in Limassol’s historic centre, traditional shopping streets and public spaces designed to strengthen local communities and support smaller businesses.

Developer highlights regeneration benefits

The developers maintain that the new Limassol Mall will bring significant economic benefits to eastern Limassol.

George Georgiou, General Manager of Nicosia Mall, said the project would help upgrade the wider area and create a modern retail destination capable of serving the city’s growing population.

Limassol Mall outlook

Cabinet approval represents a major milestone for one of Cyprus’ largest commercial real estate projects.

Yet the debate surrounding Limassol Mall is far from over.

While supporters point to investment, employment and regional regeneration, opponents argue that the success of the development will ultimately depend on whether the Government delivers the long-promised transport infrastructure needed to support it.

As planning moves into the next phase, the focus is likely to shift from the principle of development to whether the road improvements, sustainable mobility measures and wider infrastructure commitments are implemented in time to prevent the project from exacerbating Limassol’s already pressing congestion challenges.

Cyprus short-term rentals see occupancy & prices fall

Nigel Howarth
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Cyprus short-term rentals see occupancy & prices fall

The Cyprus short-term rentals market is experiencing a softer tourist season, with accommodation providers reporting declines in both occupancy levels and nightly rates as the sector also pushes for stronger action against illegal holiday lets.

According to the president of the Self-Service Tourist Accommodation Association (STEK), Constantinos Karakontis, demand has eased compared with last year’s exceptionally strong performance, although trading conditions remain better than those experienced in 2024.

Speaking to Alpha TV, Karakontis said the market had slowed noticeably.

“This year is certainly moving at a slower pace compared with last year,” he said, adding that occupancy levels are down by between 10 and 15 per cent, while average prices have fallen by a similar margin.

Occupancy and prices under pressure

The latest figures suggest Cyprus’ short-term rental sector is facing increasing competition amid a more cautious tourism market.

While the number of properties advertised on major booking platforms has remained broadly stable at between 12,000 and 15,000 in recent years, only around 8,500 currently hold an official licence issued by the Deputy Ministry of Tourism.

The gap between licensed and unlicensed accommodation remains one of the industry’s biggest concerns.

Calls for stronger enforcement of illegal holiday rentals

STEK is backing legislative changes that would link the government’s licensing register directly with online booking platforms such as Airbnb and Booking.com.

Under the proposed system, registration numbers could be verified in real time, allowing platforms to remove listings that do not hold a valid licence.

Karakontis said this would help eliminate illegal operators and improve confidence across the sector.

“When the registration number is not the real one, the platforms can at the same time delete the property from the platform,” he explained.

Industry representatives argue that stronger enforcement would create a fairer marketplace for compliant operators while improving consumer protection.

Building safety concerns highlighted

Karakontis also questioned communication between public authorities following the collapse of an apartment building in Germasogeia, where one apartment had reportedly been operating as short-term tourist accommodation.

Although the property had received the necessary tourism permit, he suggested information held by the local district authority regarding the building’s condition had not been shared with the Deputy Ministry of Tourism.

Rather than introducing additional administrative procedures, he said authorities should publish lists of buildings deemed unsuitable for tourist accommodation, enabling operators and visitors to identify potentially unsafe properties more easily.

Short-term rentals and the housing market

The rapid growth of short-term rentals has frequently been blamed for reducing housing availability and driving up residential rents across Cyprus.

However, Karakontis rejected those claims, arguing that much of the sector’s expansion has taken place in established tourist destinations, including Famagusta and Paphos, rather than in areas experiencing the greatest housing pressures.

He acknowledged that managing thousands of independently operated properties remains challenging but maintained that enforcement should focus on illegal accommodation rather than imposing further regulation on licensed operators.

Outlook for Cyprus’ holiday rental market

Despite weaker occupancy rates and lower average prices this season, industry representatives remain optimistic that demand will remain above 2024 levels.

For many operators, however, improving regulatory oversight and removing unlicensed listings from online booking platforms are now seen as essential steps towards creating a more sustainable and transparent short-term rental market in Cyprus.

Cyprus home energy efficiency tops EU average despite income gap

Nigel Howarth
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Cyprus home energy efficiency tops EU average despite income gap

Almost three in 10 people in Cyprus were living in homes with improved energy performance in 2025, according to the latest figures from Eurostat. While the country has outperformed the European Union average, the data also reveal a significant gap between wealthier households and those facing financial hardship.

Eurostat found that 28% of Cyprus’ population lived in a property where energy efficiency improvements had been completed within the previous five years. This compares with the EU average of 23.9%, highlighting the growing uptake of energy-saving home upgrades across the island.

Cyprus home energy efficiency ranks above the EU average

Among EU member states, the Netherlands recorded the highest proportion of residents living in energy-efficient homes, at 60.5%. Denmark followed with 34%, while France and Slovenia each reported 33.3%.

By contrast, Italy recorded the lowest share at 2.6%, followed by Malta at 7.8% and Greece at 9.5%.

People living in dwellings with energy efficiency improvements in the last 5 years, 2025 (%, by risk of poverty or social exclusion)
People living in dwellings with energy efficiency improvements in the last 5 years, 2025 (%, by risk of poverty or social exclusion)

The figures suggest that Cyprus has made steady progress in improving the energy performance of its residential housing stock, reflecting increased investment in home renovation and energy efficiency measures.

Financial divide remains a concern

Despite this progress, the data highlight a pronounced disparity between different income groups.

Among people considered at risk of poverty or social exclusion, just 16.7% lived in homes that had benefited from energy efficiency improvements during the previous five years. In comparison, 30.3% of those not considered at risk lived in upgraded properties.

As a result, Cyprus ranks among the EU countries with the widest gap between financially vulnerable households and those in a stronger economic position when it comes to accessing energy-efficient housing.

Across the European Union as a whole, 17.4% of people at risk of poverty or social exclusion reported living in homes with improved energy performance. That figure rises to 25.6% among households not considered at risk.

The findings underline both the progress Cyprus has made in improving residential energy efficiency and the continuing challenge of ensuring that lower-income households are not left behind as the country works towards its climate and housing objectives.

Cyprus rent cap proposal: New rules could limit rent increases

Nigel Howarth
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Cyprus rent cap proposal: New rules could limit rent increases

A new legislative proposal tabled in the House of Representatives seeks to introduce a legal framework aimed at protecting tenants of primary residences from excessive rent increases, while preserving landlords’ property rights and the principles of the free rental market.

The bill was submitted on behalf of ALMA – Citizens for Cyprus by MPs Odysseas Michaelides and Michalis Paraskevas.

Filling a gap in tenant protection

According to the explanatory memorandum accompanying the proposal, the legislation is designed to address a gap in protection for tenants living in properties that fall outside the scope of Cyprus’ Rent Control Law.

The proposed framework would apply exclusively to primary residence tenancy agreements. It would not introduce a new rent-controlled tenancy regime, grant tenants the right to remain in a property after the expiry of a lease, or interfere with the free negotiation of the initial rent between landlord and tenant.

Instead, the objective is to strike a balance between protecting tenants from excessive rent increases and safeguarding property rights while ensuring the smooth operation of the housing market.

Rent increases limited to once every two years

Under the proposal, landlords and tenants would remain free to agree on the initial rent at the start of a tenancy.

However, restrictions would apply to subsequent rent increases during the same tenancy or when renewing or extending an existing lease.

The bill proposes that rent may only be increased once every 24 months. Any increase would be limited to the lower of:

  • the percentage specified in the tenancy agreement; or
  • the percentage set by a decree of the Council of Ministers.

The legislation also establishes a statutory maximum increase of 6% every two years, unless the tenancy agreement provides for a lower increase.

New transparency requirements for landlords

Landlords would be required to provide tenants with at least 60 days’ written notice before any rent increase takes effect.

The notice would have to clearly state:

  • the current and revised rent;
  • the percentage increase;
  • the legal basis for the increase; and
  • the method used to calculate the permitted limit.

If these requirements are not met, the proposed increase would have no legal effect until the statutory obligations have been fulfilled.

Measures to prevent circumvention

The proposed legislation also contains safeguards designed to prevent landlords from bypassing the cap through additional charges or other financial obligations that effectively increase the overall rent.

Any contractual clause requiring a tenant to waive rights granted under the legislation would automatically be deemed void.

The proposal further introduces a rebuttable presumption of abusive conduct where a landlord refuses to renew or extend a tenancy and subsequently lets the same property to another tenant within six months at a rent exceeding the permitted increase.

In such cases, the landlord would be required to demonstrate that the decision was based on legitimate grounds, including:

  • occupying the property as their own residence;
  • selling the property;
  • carrying out substantial renovations; or
  • serious breaches of the tenancy agreement by the existing tenant.

Exception for major property improvements

The proposed cap could only be exceeded where landlords have undertaken substantial, documented improvements to the property.

Examples include:

  • energy efficiency upgrades;
  • significant electrical or plumbing works; and
  • extensive refurbishment projects.

Routine maintenance and repairs resulting from normal wear and tear would not qualify.

Any additional increase linked to improvement works could only be implemented after the works have been completed, the costs fully documented, and either:

  • the tenant provides written consent; or
  • the competent court grants approval.

District courts to handle rental disputes

The bill assigns exclusive jurisdiction for disputes arising under the proposed legislation to the relevant District Court.

The courts would have the authority to:

  • invalidate unlawful rent increases;
  • order landlords to refund overpaid rent; and
  • award compensation where attempts to circumvent the legislation are established.

The proposal also makes clear that the legislation would not apply retrospectively. It would affect only new tenancy agreements and lease renewals or extensions agreed after the law enters into force.

Balancing tenant protection and property rights

The proposed legislation aims to introduce targeted protections for tenants of primary residences that are currently outside Cyprus’ rent control framework.

According to the explanatory memorandum, the intention is not to replace the existing rent control system or create a new statutory tenancy regime. Instead, the proposal seeks to establish reasonable safeguards against excessive rent increases while maintaining an appropriate balance between tenant protection, landlords’ rights and the effective functioning of Cyprus’ housing market.

Download the draft bill and explanatory memorandum (Greek)

Where property taxes are highest and lowest in Europe

Nigel Howarth
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0
Where property taxes are highest and lowest in Europe

Buying a home in Europe? Taxes do not end when you collect the keys. From purchase to sale, property owners face a series of charges that can significantly affect the overall return on their investment.

Buying property in Europe means paying tax at almost every stage of ownership. Whether you purchase a holiday home, a buy-to-let investment or a permanent residence, taxes can apply when you buy, while you own, when you rent the property out and when you eventually sell.

The amount you pay varies enormously depending on the country. According to data from the Global Property Guide, which monitors real estate taxation in more than 80 countries, European property taxes remain among the most diverse in the world.

The four property taxes in Europe every buyer should know

Anyone purchasing property in Europe should understand four key taxes:

  • Transfer tax (or stamp duty), payable when purchasing a property.
  • Annual property tax, charged each year on a property’s assessed, cadastral or market value.
  • Rental income tax, payable on income generated from letting the property.
  • Capital gains tax, charged on any profit made when selling.

Comparing countries is far from straightforward. Tax rates are often published as ranges, valuation methods differ widely and many countries apply regional or municipal variations.

However, one country consistently appears among Europe’s most heavily taxed property markets.

Rental income tax: where landlords pay the most

For buy-to-let investors, rental income tax often has the greatest impact on profitability.

Global Property Guide estimates the tax payable by non-resident landlords earning monthly rental income of €1,500, €6,000 and €12,000.

At €1,500 per month, Denmark has Europe’s highest tax burden, with landlords paying 42.11% from the first euro earned. The Netherlands follows at 36%, while Finland levies 30%.

At the opposite end of the scale, Cyprus applies no rental income tax at this income level, while Luxembourg charges just 2.94%.

As rental income increases, the rankings change considerably.

At €12,000 per month, Belgium tops the list with a tax rate of 47.27%, narrowly ahead of Denmark at 43.22%. Germany and Greece both levy 41%.

Some countries maintain consistent tax rates regardless of rental income. Italy remains at 21%, Portugal at 28%, and the Netherlands at 36%, whether rental earnings are modest or substantial.

Countries with the steepest increases typically tax rental income alongside employment income.

Austria is a clear example. Rental income is taxed using the same progressive bands as salaries, beginning at 0% below €13,308 and rising to 55% on income exceeding €1 million. In practice, landlords are simply paying income tax on rental earnings.

Transfer tax: the cost of buying property

Purchase taxes can add tens of thousands of euros to the cost of acquiring a home.

Belgium once again sits near the top of the European rankings, with transfer tax reaching 12.5% of the purchase price in some regions. That is slightly above the UK’s highest Stamp Duty Land Tax rate of 12%, the Netherlands’ 10.4% and Luxembourg’s 10%.

Regional differences are significant.

A buyer purchasing a €500,000 property in Brussels or Wallonia without qualifying for relief could face a tax bill of €62,500.

However, owner-occupiers may benefit from generous reductions. Brussels exempts the first €200,000 of the purchase price for qualifying buyers, reducing tax on a €500,000 home to €37,500.

In Wallonia, eligible purchasers may qualify for a reduced 3% rate, cutting the tax bill to around €15,000. Buyers of qualifying social housing from public authorities pay no registration duty, while Flanders operates under a separate system of rates and reliefs.

At the other end of the market, Estonia and the Czech Republic charge no transfer tax.

Lithuania’s acquisition costs are among Europe’s lowest, amounting to around 0.4%, or approximately €2,000 on a €500,000 purchase.

Annual property tax: why headline rates can be misleading

Annual property taxes are often the most misunderstood part of European property ownership.

Countries use different methods to calculate taxable values. Some tax current market values, while others rely on cadastral or assessed values that may be decades old. The UK follows a completely different system based on council tax bands.

Spain illustrates why headline tax rates can be deceptive. Although property tax can reach 4.8% in certain municipalities, the rate applies to cadastral values rather than current market prices, meaning the actual amount paid is typically much lower.

For a property worth around €300,000, annual bills are generally far closer than headline percentages suggest.

In the UK, council tax typically ranges between €2,000 and €3,200 annually, depending on the local authority and valuation band.

France’s taxe foncière and Spain’s IBI usually fall between €700 and €1,800 because both are based on taxable values below market prices. Belgium’s précompte immobilier, calculated using a notional 1975 rental value, often produces similar annual bills.

Germany’s reformed Grundsteuer, introduced in 2025, is frequently lower than in many neighbouring countries, although bills now vary considerably between municipalities.

Cyprus and Malta stand apart by charging no annual property tax.

Capital gains tax: what happens when you sell

Selling a property can produce very different tax outcomes depending on where it is located.

Denmark imposes one of Europe’s highest capital gains tax burdens. Property gains are added to overall income and taxed at rates of up to 52.07%.

On a €250,000 profit, this could result in a tax bill of around €130,000, leaving the seller with approximately €120,000.

Malta adopts a very different approach. Rather than taxing the gain itself, it levies a 12% tax on the sale price as a transaction charge. This can fall to 5% for non-property traders selling within five years.

Germany rewards long-term ownership. Anyone who owns a property for more than ten years can generally sell free of capital gains tax. Selling before that period means any gain is taxed at the seller’s income tax rate, together with any applicable solidarity surcharge.

Which European country has the highest property taxes?

Looking across all four taxes, Belgium consistently ranks among Europe’s most heavily taxed property markets.

Transfer taxes remain among the highest in Europe, annual property taxes are well established and rental income tax can be particularly punitive. Only its relatively moderate capital gains tax, generally ranging between 16.5% and 33%, offers some relief.

At the opposite end of the spectrum sit Cyprus and Malta.

Cyprus applies no rental income tax at lower income levels and charges no annual property tax. Malta also has no annual property tax and uses a transaction-based system instead of conventional capital gains tax, making both countries among Europe’s most tax-efficient locations for property ownership.

The bottom line

For anyone buying property abroad, the purchase price tells only part of the story.

Transfer taxes, annual ownership costs, rental income tax and capital gains tax all influence the long-term profitability of an investment. The difference between owning an apartment in Brussels and a villa in Cyprus can amount to tens of thousands of euros over the lifetime of ownership.

For investors and second-home buyers alike, understanding property taxes in Europe is just as important as choosing the right location.

(Based on an article published in Euronews)

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