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Foreigners Driving Cyprus Property Prices Through The Roof: Bypassing Laws And Raising Concerns

Foreign buyers are sweeping up land across Cyprus, sidestepping local regulations, and pushing property prices to unprecedented levels. Meanwhile, this trend is creating a housing crisis for residents, particularly young couples who are struggling to find affordable homes.

While legislation does exist, including restrictions on foreign ownership, it appears to be easily bypassed. Sources close to the matter suggest that foreigners are increasingly purchasing property via legal entities, such as companies, which allows them to sidestep the scrutiny intended by the law.

The issue has been a topic of public debate for some time, but now it’s taking center stage in a more focused manner, thanks to a new parliamentary push. Today, the parliamentary Interior Committee will discuss a bill introduced by Nikos Georgiou, the DISY MP for Famagusta.

Representatives from the Ministry of Interior, the Department of Land and Surveys, the Ministry of Finance, the Legal Service of the Republic, and the Registrar of Companies and Intellectual Property have all been invited to share their views. They will be tasked with shedding light on the growing issue of foreign buyers bypassing the law by acquiring property through companies and trusts.

Tightening The Legal Framework

Georgiou’s proposed bill aims to modernize Cyprus’ property acquisition laws for foreigners, ensuring more transparency and tightening controls. According to the explanatory memorandum, the aim is to protect public interests by improving the monitoring process, enforcing stricter due diligence, and ensuring professionals like lawyers and accountants adhere to stringent ‘Know Your Client’ (KYC) guidelines.

The proposed law would essentially embed these professionals into the process, ensuring they verify the identity of foreign buyers before any property transactions can go through. This move mimics anti-money laundering practices and aims to close the loopholes that allow foreigners to bypass local controls by using legal entities.

Loopholes For Companies

As citizens and officials raise concerns, the current law (Article 3) already imposes restrictions on foreign individuals purchasing real estate, which requires prior approval from the Council of Ministers. The legislation also sets clear boundaries for the area of land a foreigner can acquire, ensuring it remains within manageable limits for residential or business purposes.

However, as pointed out by Nikos Georgiou in a parliamentary question last summer, there is growing evidence that foreigners are exploiting these laws by buying property through companies. This raises the question: why should restrictions exist for individuals if they can easily circumvent the law through corporate structures?

As legal expert George Koukounis pointed out years ago, any foreigner can establish a Cypriot company to purchase property without facing the same constraints. The problem lies in why natural persons face limitations when they can bypass these through a company.

European Perspective On Foreign Property Ownership

While Cyprus isn’t the only country facing these issues, it does stand out. Across Europe, many countries have taken steps to address similar concerns.

In Finland, a recent report called for stricter legislation to prevent foreigners from acquiring property, especially from countries whose actions threaten national security. In the UK, transparency rules and anti-money laundering measures are in place, ensuring more thorough checks on foreign buyers. Meanwhile, in Greece, foreign purchases are restricted in border regions and require special permits from the Ministry of National Defense.

These measures reflect the growing sense of caution in Europe over foreign ownership of land and property. The increasing concerns in Cyprus may well push for similar reforms, with calls for greater scrutiny of foreign buyers becoming louder by the day.

Cyprus Emerges As A Leading Household Consumer In The European Union

Overview Of Eurostat Findings

A recent Eurostat survey, which adjusts real consumption per capita using purchasing power standards (PPS), has positioned Cyprus among the highest household consumers in the European Union. In 2024, Cyprus recorded a per capita expenditure of 21,879 PPS, a figure that underscores the country’s robust material well-being relative to other member states.

Comparative Consumption Analysis

Luxembourg claimed the top spot with an impressive 28,731 PPS per inhabitant. Trailing closely were Ireland (23,534 PPS), Belgium (23,437 PPS), Germany (23,333 PPS), Austria (23,094 PPS), the Netherlands (22,805 PPS), Denmark (22,078 PPS), and Italy (21,986 PPS), with Cyprus rounding out this elite group at 21,879 PPS. These figures not only highlight the high expenditure across these nations but also reflect differences in purchasing power and living standards across the region.

Contrasting Trends In Household Spending

The survey also shed light on countries with lower household spending levels. Hungary and Bulgaria reported the smallest average expenditures, at 14,621 PPS and 15,025 PPS respectively. Meanwhile, Greece and Portugal recorded 18,752 PPS and 19,328 PPS, respectively. Noteworthy figures from France (20,462 PPS), Finland (20,158 PPS), Lithuania (19,261 PPS), Malta (19,622 PPS), Slovenia (18,269 PPS), Slovakia (17,233 PPS), Latvia (16,461 PPS), Estonia (16,209 PPS), and the Czech Republic (16,757 PPS) further illustrate the disparate economic landscapes within the EU. Spain’s figure, however, was an outlier at 10,899 PPS, suggesting the need for further data clarification.

Growth Trends And Economic Implications

Eurostat’s longitudinal analysis from 2019 to 2024 revealed that Croatia, Bulgaria, and Romania experienced the fastest annual increases in real consumer spending, each growing by at least 3.8%. In contrast, five member states, with the Czech Republic experiencing the largest drop at an average annual decline of 1.3%, indicate a varied economic recovery narrative across the continent.

This comprehensive survey not only provides valuable insights into current household consumption patterns but also offers a robust framework for policymakers and business leaders to understand economic shifts across the EU. Such data is integral for strategic decision-making in markets that are increasingly defined by evolving consumer behavior and regional economic resilience.

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