With two AKEL bills as well as one submitted by a group of MPs from other parties, restrictions are imposed on the acquisition of real estate by third-country nationals.
Based on the provisions of the law proposals, foreigners are largely limited to the acquisition of an apartment or a house or even an office.
Restrictions are also imposed on the acquisition of real estate by companies, some of which bought properties hiding behind Cypriots.
In one of AKEL's law proposals, provision is made so that "the director of the Land Registry cannot accept the transfer of immovable property or the registration of a contract for the sale or exchange or assignment of immovable property, in the event that the restrictions provided for in the law concerning the acquisition of property by foreigners apply".
As stated in the explanatory memorandum accompanying the draft law, "the proposed legislative regulations are deemed necessary to strengthen the control of legality in the acquisition of real estate by foreigners, but also to prevent the indirect acquisition of real estate by foreigners through companies or the conclusion of assignment contracts, as well as to ensure transparency as to the identity of the beneficial owners of legal entities that acquire immovable property in the Republic".
A second proposal of AKEL provides, among other things, for the following:
1. Broaden the definition of the term "foreign-controlled company" to also include any organization in which the beneficial owner under its provisions on the Prevention and Combating of Money Laundering Law is a foreigner.
2. Revision of the current restrictions on the acquisition of immovable property by foreigners, in order to clarify, among other things, that a Cypriot and/or European company controlled by foreigners is not exempt from the definition of the term "foreigner".
3. Determination of the terms, restrictions, conditions and criteria that will apply in case of acquisition of immovable property by foreigners by Regulations issued under the said law and submitted to the House of Representatives for approval.
4. Abolition of certain provisions of the current legislation which present gaps and interpretative ambiguities, namely, among others, those concerning the acquisition of a large area of land by foreigners.
5. Introduction of a provision according to which the permission of the Council of Ministers will not be required in case the acquisition of immovable property by a foreign natural person concerns the acquisition of an apartment or a residence with an area of up to two hundred (200) square meters, a shop with an area of up to two hundred (200) square meters or an office with an area of up to three hundred (300) square meters.
6. Introduction of a provision so that a legal entity controlled by foreigners can acquire, without the permission of the Council of Ministers, a store with an area of up to two hundred (200) square meters or an office with an area of up to three hundred (300) square meters.
6. Prohibition of the acquisition by foreigners of forest or agricultural land and immovable property adjacent to the ceasefire line or area and/or critical infrastructure.
The proposed amendments are considered necessary in order to make the implementation of the current legislation in the field of the purchase of real estate by foreigners more effective, on the one hand by abolishing provisions that allow the indirect acquisition of real estate by foreigners without the permission of the Council of Ministers and on the other hand by introducing mechanisms and criteria for effective control.
The proposal for a law by a group of MPs
In the bill of MPs of other parties, restrictions are imposed on the acquisition of immovable property by natural persons who are citizens of third countries, so that they can acquire only one house or one apartment, to be built or renovated, on a single plot of land.
Especially for this aspect, it is provided that "a license granted is valid for a single act of acquisition of immovable property and is not transferred or extended to more than one property, person or legal entity".
Also, in the "Acquisition of Immovable Property (Foreigners) Law" (as it is called) "restrictions are introduced on the acquisition of immovable property by legal persons, in such a way that: "At least 51% of the issued share capital or voting or control rights must be required to belong to citizens of the Republic or of another Member State or a State of a contracting party to the European Economic Area or to a legal person established in accordance with its legislation of the Republic or of another Member State and which has its registered office, central administration or principal place of business in a State party to the European Economic Area, including the Republic of Cyprus".
In addition, the acquisition of forest or agricultural land by foreigners is prohibited.
The proposed legislative regulations are considered necessary, with the ultimate goal of preventing the phenomenon of the establishment of Cypriot companies and other organizations that basically act as intermediaries for the real estate market.
The proposal is signed by MPs Zacharias Koulias, Panikos Leonidou, Pavlos Mylonas, Chrysanthos Savvidis, Christos Orphanidis, Kyriakos Hatzigiannis, Nikos Sykas and Michalis Giakoumis.
