Cyprus Tightens AML Rules for Real Estate — What Buyers and Investors Need to Know

Cyprus real estate faces tougher AML supervision — the change that matters for buyers and investors

Cyprus real estate is about to face stricter anti-money-laundering oversight after the Ministry of Finance launched a public consultation on a draft amendment to the country’s AML/CFT law. The bill, titled "The Prevention and Suppression of Money Laundering and Terrorist Financing (Amendment) Law of 2026", is open for comment until 14 February 2026 and proposes a significant shift in who monitors compliance in property transactions.

This change responds to national and European findings that the property market is a high-risk channel for financial crime. For anyone buying, selling, or investing in Cyprus property, the reforms will affect due diligence, transaction speed, and the documentation required to prove the legitimacy of funds.

Why the government is acting: risk reports and EU alignment

The draft law is not a standalone move. It follows a string of assessments and recommendations:

• The draft cites the National Risk Assessment on Money Laundering and Terrorist Financing (NRA AML/CFT2).
• It references the Republic of Cyprus’ Mutual Evaluation Report published by the Council of Europe’s MONEYVAL Committee.
• It also aligns with the EU-wide Risk Assessment on AML/CFT (2022) and the FATF guidance issued in 2022.

In plain terms, Cyprus regulators have identified the property sector as showing elevated vulnerability to money laundering and tax-related crimes. The government frames the bill as a response that will bring national law into line with international standards and upcoming EU rules.

Our analysis: the reform is a predictable, compliance-driven reaction. It is meant to close gaps flagged by international evaluators and to reduce the reputational and supervisory risks facing Cyprus as an international financial centre.

What the draft amendment changes: supervision and scope

The most concrete change in the bill is the transfer of supervisory responsibility.

Key legal steps proposed

• Supervisory authority: AML/CFT supervision of estate agents and other real estate professionals is to move from the Estate Agents Registration Council to the Tax Department.
• Public consultation: The bill is open on the e-Consultation platform until 14 February 2026.
• EU alignment: The draft anticipates EU Regulation (EU) 2024/1624, which will extend AML rules to estate agents and real estate professionals when it comes into force in July 2027.

Who falls under the new supervision?

• All professionals who buy or sell property, or who professionally represent buyers or sellers in property transactions, provided they are not already supervised by another competent authority.
• Credit institutions and credit-acquiring companies remain under the Central Bank of Cyprus for AML/CFT matters linked to their professional activity.

The Ministry argues the Tax Department is the right choice because it:

• already handles property transactions through a dedicated Property Unit;
• has an existing AML/CFT supervisory role for other sectors, like works of art;
• offers lower implementation costs by using existing structures;
• matches practice in other EU countries where tax or fiscal authorities supervise AML for property markets, including the United Kingdom (HMRC), Greece, Luxembourg, Netherlands and Latvia.

Timing and EU law context: what to expect before 2027

The draft is explicit that the amendment is needed before the EU-wide rules take effect in July 2027. The relevant legal references include:

• EU Regulation (EU) 2024/1624, adopted 31 May 2024, which extends coverage to estate agents and other real estate professionals.
• Article 52 of EU Directive (EU) 2024/1640, which requires that supervision of obliged entities be carried out by a public authority.
• The 5th EU AML Directive (EU) 2015/849, which requires member states to extend AML measures to sectors at higher risk, including property.

The draft is designed to fill the regulatory gap now while providing a smoother transition to the EU framework. For market participants the immediate consequence is that obligations and supervisory checks will begin sooner than the 2027 regulation date.

Practical impacts for buyers, investors and real estate professionals

This is where the paper meets reality. The bill changes behaviour at transaction level. Our read of the draft and the supervisory shift highlights several concrete consequences:

• Increased KYC and source-of-funds scrutiny. Expect more requests for documentation proving the origin of purchase funds and for identification of beneficial owners.
• More registered, supervised agents. If an agent is not already under another regulator, they will have to register under the Tax Department’s AML regime.
• Slower transaction times. Additional checks and reporting obligations can add steps to conveyancing and closing processes.
• Potential higher compliance costs. Agents and law firms will face new administrative and training requirements; some of those costs may be passed to clients.

Specific obligations that buyers and investors should prepare for:

• Clear documentation of source of funds and, where applicable, source of wealth statements.
• Cooperation with enhanced customer due diligence (EDD) if an investor is a politically exposed person or comes from a higher-risk jurisdiction.
• Provision of corporate records for companies used to buy property, including ownership structures and beneficial ownership details.

What we advise:

• Work with agents and lawyers who are already familiar with AML/CFT checks or are regulated by the Central Bank or another competent authority.
• Keep full records of wire transfers, loan agreements and any third-party payments related to a purchase.
• Expect questions about taxes and prior transactions — the Tax Department’s involvement means fiscal scrutiny will be more immediate.

How enforcement will work and who keeps oversight of banks

A central point in the bill is that banks and credit institutions will keep their AML supervision under the Central Bank of Cyprus for property-related transactions that form part of their professional activities. That preserves a separation of duties:

• Tax Department: will supervise estate agents and real estate professionals not supervised elsewhere.
• Central Bank of Cyprus: will continue to supervise credit institutions and credit-acquiring companies.

Supervision by a public authority satisfies the EU requirement under Article 52 of Directive (EU) 2024/1640.