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A new audit has sounded the alarm over serious loopholes in Cyprus’ property laws, warning that foreigners are buying a much larger share of real estate than official figures show, with little oversight of where the money comes from.
Kathimerini's Apostolos Tomaras reports that according to the Auditor General, sales to foreigners officially accounted for 27% of the market in 2024, but the real number is far higher. That’s because foreign buyers often set up Cypriot companies, which are legally treated as “local” buyers. Those sales are then recorded as Cypriot purchases, creating a distorted picture of the market.
these figures do not include transfers to Cypriot companies with foreign shareholders, which are recorded as sales to local buyers. Consequently, foreign ownership may be significantly higher
The report says the problem stems from a 2011 legal change that exempted companies from restrictions dating back to 1959. Originally, foreigners were required to get approval from the Council of Ministers to buy property, including when they used companies. But under today’s rules, any non-EU national can set up or buy into a Cypriot company and acquire real estate without the same restrictions, effectively making the old limits meaningless.
“This loophole undermines the entire system,” the Auditor General noted, adding that the framework is so outdated it no longer serves its intended purpose of regulating foreign ownership.
The audit also criticizes the Interior Ministry’s procedures for approving purchases by individuals. While the ministry requires foreigners to declare whether their property is for “owner-occupation” or professional use, the audit found that nearly 99% of applications since 2020 were labeled as owner-occupied, even in cases where buyers owned multiple homes. Four of the 32 applications reviewed involved purchases of a second home, also declared as “owner-occupied.”
More worrying, the audit says authorities are not properly checking the financial backgrounds of buyers. While files included copies of bank accounts, these often did not reflect the value of the properties purchased, and there were no checks on the source of the funds. “There is no legal requirement for such scrutiny,” the report said, highlighting a major gap in oversight.
In total, the 32 cases examined between 2020 and 2024 involved property worth €9.4 million, with an additional €2.2 million spent on second homes. But those figures represent only a fraction of the market. By 2024, official data suggested that Cypriots accounted for 61% of purchases, but the report warns this figure is inflated because foreign-controlled companies are counted as “local.”
The auditor general concluded that the system is not only outdated but also vulnerable to abuse, urging lawmakers to modernize the rules. Without reforms, Cyprus risks losing control over a real estate market already under pressure from rising demand, foreign speculation, and the memory of the 2013 financial crisis.
Who Is Buying and Where
The Auditor General’s data shed light on the profile of foreigners purchasing property in Cyprus. Between 2020 and 2024, those applying to acquire real estate in Nicosia through the District Administration were mainly from China, Lebanon, Russia, and Israel.
Most property transfers, however, appear to take place in Paphos and Limassol. It’s important to note that these figures do not include transfers to Cypriot companies with foreign shareholders, which are recorded as sales to local buyers. Consequently, the actual level of foreign ownership may be significantly higher.
