Cyprus unveils bold housing policy boost

In a strategic move to spur affordable housing development, the Cyprus government introduces a groundbreaking housing policy. For landowners with a building block exceeding 1,000 sq.m. and a building factor above 100%, a lucrative 45% additional building factor awaits. On the flip side, plots below 1,000 sq.m. witness a 25% increase in property value.

The incentives cater specifically to those eyeing land exploitation for building construction. The Ministry of Interior emphasizes that the extra building factors aim to promote affordable housing. Of the 45% boost, 25% is reserved for affordable home construction and the remaining 20% is in the hands of the developer.

Notably, if the constructed units can't find buyers, the Cyprus Land Development Organization steps in as a safety net. Houses unsold within two years become the responsibility of the C.O.P.C, which purchases and integrates them into the affordable rent concession program.

The Ministry highlights the extension of existing urban planning incentives, introducing two alternative options for additional building factor exploitation. The first option allows a maximum increase of 45% for residential zones with a building factor over 1.00:1 and 25% for those equal to or less than 1.00:1, but it's applicable to plots over 1,000 sq.m.

The second option involves a minimum net area of 1,000 sq.m. or a property with a minimum required net area of 4,000 sq.m. Developers can choose to use the increased building factor for affordable housing or pay a redemption to the Affordable Housing Fund, fostering flexibility.

Crucially, these incentives come with conditions: they apply for two years from the date of submission of urban planning applications and exclude areas of traditional core, special character (PEX), or those with special ecological value.

The anticipated entry into force is set for December 2023, promising a dynamic shift in Cyprus's housing landscape.

[With information sourced from Philenews]