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The Audit Office has called for a major revision of the Land Allocation Plan (LAP) for low-income families, citing inconsistencies, procedural gaps, and financial risks in its latest report. The audit, covering 12 communities across Cyprus and analyzing applications from 2020–2022, found significant issues in how District Administrations (DAs) implemented the plan.
Key concerns include missing justification reports for land divisions, a lack of priority-based beneficiary lists in 62% of cases, and violations of maximum land size limits. The report also found that over 60% of plan notifications lacked proper documentation of the mandatory lottery process for plot allocation. Inconsistent application reviews, late submissions, and gaps in monitoring compliance with Lease-to-Own Agreements (LOAs) further weakened the program’s integrity.
Financially, the report warned of risks tied to government-backed housing loans, as rising costs and inflation could lead to defaults. As of December 31, 2022, outstanding lease agreement payments to DAs totaled €10.46 million, with 64% immediately collectible, indicating potential revenue loss. Additionally, legal actions against the government as a loan guarantor raised further concerns.
To address these issues, the Audit Office recommends a revised legal and procedural framework, standardized application and monitoring processes, and an automated system for tracking compliance. It also calls for training programs for officials and clearer evaluation criteria aligned with broader government housing policies.
With the LOAs still in early implementation, the Audit Office plans a follow-up review to assess the plan’s effectiveness in the coming years.
