The Cypriot Ministry of the Interior officially announced its intention to repeal the current legislation that regulates the acquisition of real estate by foreign citizens. This refers to the Law on the Acquisition of Real Estate by Foreigners (KEF. 109), whose provisions were introduced decades ago and no longer align with modern economic, social, and legal conditions.
According to Interior Minister Constantinos Ioannou, the existing legal mechanism is outdated and ineffective. It fails to consider the digital transformation of the sector, the growing globalization of the market, and the integration processes within the European Union. In this regard, the ministry has begun preparing a new legislative framework to replace the current law.
What will change for foreign buyers of real estate in Cyprus
One of the main reasons for the upcoming reforms is the need to align the legislation with current EU legal standards and the dynamics of the Cypriot real estate market. The new law, currently being drafted and analyzed for legal loopholes, will apply to EU citizens and third-country nationals alike.
Since 1999, the power to regulate transactions with foreigners has been transferred from the Council of Ministers to the heads of local district administrations. These administrators are authorized to apply the outdated law's provisions. However, the current legal structure often causes difficulties in law enforcement and delays the approval process for transactions.
The aim of the reform is transparency and sustainable market development
The Cypriot authorities emphasize that the reform's goal is not to restrict foreign investment, but rather to establish a transparent, modern regulatory system that protects the interests of investors and the state. The new legislation is expected to improve administrative processes, provide legal certainty for foreign buyers, and increase Cyprus's appeal as a real estate investment destination.
Context: growing interest in Cyprus from foreign investors
In recent years, Cyprus has remained one of the most popular destinations for foreign citizens to purchase real estate, thanks to its stable climate, safe environment, favorable tax regime, and high standard of living. Interest in the island has grown particularly strong since the pandemic, when demand for country houses, seaside villas, and properties suitable for remote work increased.
At the same time, however, regulatory authorities have noted the need to control and structure the inflow of foreign capital in order to avoid overheating the market and creating a shortage of affordable housing for the local population. Against this backdrop, the revision of the law is part of a broader government strategy in the areas of housing policy and foreign investment.
What next: deadlines and outlook
The Cyprus Ministry of the Interior is currently assessing all the risks and gaps in the current system in close collaboration with the Legal Service. Once this stage is complete, a bill that meets modern requirements and economic realities will be presented.
These changes are expected to be well-received by the professional community and international investors alike, as the new legal framework will provide greater legal certainty and transparency in procedures, as well as faster transaction approval processes.