A serious public and political scandal is flaring up in Cyprus over the new rules for allocating and leasing so-called Turkish Cypriot property—assets that were transferred to the state after the events of 1974 and are now granted for use to Greek Cypriot refugees. During a recent meeting of the Parliamentary Committee on Refugees, facts were revealed that caused genuine shock: in one case, the rent for an industrial premises rose from €20 to €1,700 per month. For the business owner, this became a de facto sentence—the company found itself on the verge of closure.
The case concerns an aluminium factory that operated for many years in the premises provided to it. According to the head of the Turkish Cypriot Property Management Service, Anti Lakkotripa, the revision of rates is linked to an attempt to bring rent closer to market realities. Moreover, she stated that in this area a “fair” amount would be around €10,000 per month. This statement triggered a sharp reaction from MPs, who stressed that such an approach completely ignores the real situation and the investments that tenants themselves have been making in these properties for decades.
Why entrepreneurs consider the new rules unfair
The main complaint from businesses and refugee representatives is that many properties originally were empty plots of land or semi-ruined buildings. People used their own funds to build workshops, factories, cafés, investing tens and hundreds of thousands of euros in repairs and modernization—essentially creating the market value of these properties from scratch. Now, however, the state proposes calculating rent as if these premises had always had their current high commercial value.
MPs cite telling examples from Limassol, where entrepreneurs invested up to €400,000 in the reconstruction of old buildings, and today they are being asked to pay €800–1,000 per month, without taking incurred costs into account. Business representatives emphasize that this approach makes further operation economically pointless.
A wave of complaints and the business response
The problem has taken on a mass character. The Pancyprian Federation of Small Businesses (POVEK) reported a large number of appeals from entrepreneurs faced with a sharp rise in rent. The organization’s Secretary General, Stefanos Koursaris, said that meetings with those affected have already begun and will continue in different cities across the country, after which an official memorandum is being prepared for the government and parliament. The goal of these meetings is to document real cases, show the scale of the problem, and secure a revision of pricing approaches.
The new procedure for property allocation and its consequences
The situation is further complicated by the fact that since 2025 Cyprus has had updated legislation on the allocation of Turkish Cypriot property. According to official data, demand for such assets is enormous. In the first publication wave under the new rules, only 21 residential units were offered, and more than 500 applications were submitted. A similar situation exists with commercial property: 226 applications were filed for 33 units. This creates a serious shortage and pushes the state toward higher rates.
In January 2026, the second publication wave began, offering dozens of residential, commercial, and agricultural properties. However, experts are already warning that without adjusting the principles for calculating rent, the new system may lead not to business development but to mass closures.
Inheritance and transparency as new pressure points
Separate dissatisfaction concerns inheritance. Unlike agricultural plots and the first homes, commercial premises and holiday houses are not subject to inheritance transfer. This means that the son or daughter of an entrepreneur who has developed a business and invested large sums for decades formally has no right to continue the business in the same premises. This norm has already been called by the business community “a blow to family entrepreneurship.”
The parliamentary committee is also insisting on greater transparency and demands that the applicant scoring system be made public, so that everyone can understand by what criteria decisions on granting property are made.
What this means for Cyprus’s economy
Against the backdrop of an economic slowdown and rising costs for small businesses, the situation with leasing Turkish Cypriot property is becoming a potential factor of social tension. If the current rules are not revised, Cyprus risks losing hundreds of small enterprises that provide jobs and pay taxes. Experts note that refugee-owned businesses have for decades been an important part of economic recovery after the island’s division, and today they need not additional pressure but sensible support.
The scandal over rental rates has already moved beyond parliamentary discussions and is increasingly becoming a topic of public debate. The decisions taken in the coming months will largely determine the future of small and medium-sized businesses in Cyprus and public trust in the new system of managing Turkish Cypriot property.