Cyprus Proposes Strict Limits on Foreign Buyers After Audit Finds 27% of Sales to Third-Country Nationals

Cyprus property shake-up: what investors and buyers must know

The property in Cyprus market is poised for major change as Parliament prepares to examine three bills in January 2026 aimed at curbing purchases by third-country nationals. The move follows an Audit Office finding that more than 27% of all property and land sales in 2024 were to buyers from non-EU countries, with Paphos recording the highest volume of those transactions and Larnaca second. Our analysis shows these proposals could reshape demand, transactional structures and compliance for developers, agents and buyers.

Why this matters now

Housing affordability and access to homes for local residents have risen as central political concerns in Cyprus. The Audit Office figures, presented to Parliament and referenced by the Minister of Interior, are stark: 27% of immovable property sales in 2024 went to third-country nationals. Data for the first 11 months of 2025 gives a similar picture, with more than 26% of total immovable property sales recorded as purchases by third-country nationals. Lawmakers are treating the issue as both socio-economic and national interest related, and housing policy has been placed on the agenda for the start of Cyprus’ EU Presidency on 1 January 2026.

These numbers are likely understated because they exclude transactions carried out via Cypriot companies with foreign shareholders. That gap is precisely what the proposed bills aim to address.

The three bills on the table: a breakdown

Parliament’s Committee on Interior will consider the proposals on 15 January during its first session after the Christmas recess. Two bills were tabled by AKEL General Secretary Stefanos Stefanou and the third by MPs from DIKO, DISY and DIPA who sit on the Parliamentary Audit Committee. Each proposal amends the Immovable Property regulatory regime in a distinct way.

AKEL’s first proposal: tighten Directorate oversight

• Amends the Immovable Property (Transfer and Mortgage) Law.
• Seeks to prevent the Director of the Department of Lands and Surveys from approving transfers, registrations, sales, exchanges or assignments when restrictions under the Immovable Property Acquisition (Aliens) Law apply.

The intent is to close off administrative routes that allow transfers to proceed without an explicit check on whether the transaction contravenes the Aliens Law. In practice, that raises the administrative bar for registering titles where foreign ownership questions arise.

AKEL’s second proposal: close corporate loopholes and expand definitions

This bill modernises the Immovable Property Acquisition (Aliens) Law with several specific interventions:

• Abolishes provisions allowing indirect acquisitions without Cabinet approval.
• Expands the definition of a “foreign-controlled company” to include entities whose beneficial owner, under anti-money laundering rules, is a third-country national.
• Clarifies that Cypriot- or EU-registered companies controlled by foreign interests are not exempt from restrictions.
• Requires individual assessment of each application, with formal communication of decisions to applicants.
• Sets limited exemptions for third-country nationals:
  • One apartment or house up to 200 sq m
  • One shop up to 200 sq m
  • One office up to 300 sq m
• Introduces a blanket ban on direct or indirect acquisitions near the ceasefire line and in areas of critical infrastructure, including ports, airports, beaches and military facilities.

This proposal tries to neutralise the corporate structuring that allowed buyers from outside the EU to acquire property without a transparent approval process.

The Audit Committee’s bill: one home only and ownership thresholds

The third proposal approaches the issue from a different angle. It would:

• Permit third-country nationals to acquire only one house or apartment on a single plot, whether under construction or completed.
• Require legal entities to have at least 51% of share capital, voting rights or control held by Cypriot, EU or EEA nationals, or by companies established and headquartered within the EEA, including Cyprus.
• Ban foreign nationals from acquiring forest or agricultural land entirely.

Taken together, the bills aim to limit quantity, restrict strategic land purchases and tighten control over the ultimate ownership of companies that hold real estate.

What these changes mean for different market players

These proposals are significant for multiple stakeholders. We set out the likely impacts and practical implications.

For third-country buyers and overseas investors

• Reduced ability to buy multiple properties: One bill limits purchases to one residential property per third-country national and, in AKEL’s draft, a floor area ceiling of 200 sq m for a dwelling.
• More transparency and checks: Applications will face individual assessment and decisions will be formally communicated. That adds time and administrative steps to closing.
• Corporate structures will be scrutinised: Beneficial ownership rules under anti-money laundering law are central to the new definition of foreign control. Investors who have used local companies to hold property should expect deeper due diligence and possible restructuring requirements.
• No purchase of forest or agricultural land under one proposal, and restricted purchase near strategic infrastructure.

Practical advice: overseas buyers should review beneficial ownership records, plan longer transaction timelines and engage local legal counsel to assess whether current holding structures meet the proposed thresholds.

For domestic buyers and tenants

• Short-term effect on affordability: If foreign demand declines, pressure on prices, particularly in hotspots like Paphos and Larnaca, could ease, improving access for local buyers.
• Supply-side effects: Restricting foreign investment could slow new development in segments that rely on external capital, affecting rental supply over time.

For developers and the construction sector

Developers who target foreign buyers will need to adjust sales strategies. Projects that were marketed internationally may see a drop in demand for higher-end units that were previously bought by third-country nationals. That could shift product focus toward the local market or EU buyers.

For estate agents and conveyancing professionals

Agents must prepare for stricter onboarding and verification processes for purchasers. Conveyancers and notaries will face additional compliance duties related to beneficial ownership, Cabinet approvals and the Director of Lands’ scrutiny.

Market implications: prices, demand and volatility

The proposals do not guarantee a single outcome. Markets respond to policy with a mix of immediate sentiment-driven moves and longer-term fundamentals.

Key points we expect to influence the property market:

• Short-term transaction slowdown: Anticipation of tighter rules and added bureaucracy is likely to slow deal flow until the legal framework is clear.
• Price adjustments in hotspot areas: Cities and districts that recorded high shares of third-country purchases, notably Paphos and Larnaca, could see price corrections if foreign demand drops.
• Reallocation of investor appetite: Some buyers may shift to EU or EEA structures that comply with the 51% ownership tests in the Audit Committee proposal. That could redirect capital rather than eliminate it.
• Development pipeline risk: Projects financed with the expectation of foreign end-buyer demand may face occupancy or sales shortfalls, which affects construction activity and financing.

We must stress these outcomes depend on final legislative text, implementation regulations to be issued by the Council of Ministers and subsequent administrative practice.

Legal and compliance considerations

Real estate professionals and investors will need to engage with several legal questions:

• How will the new definition of foreign-controlled company be interpreted? The bills tie control to beneficial ownership under anti-money laundering rules. That makes AML disclosures and corporate records central to every transaction.
• Will measures apply retroactively?