The Cyprus real estate market is showing noticeable activity from foreign citizens and overseas companies. The reason is a draft law being prepared for implementation, which introduces new restrictions on the purchase of properties in so-called sensitive zones — near military bases, ports, airports, and other critical infrastructure facilities. Amid expectations of stricter rules, investors are seeking to complete transactions before the law enters into force.
According to local experts, interest in urgent registration of property rights has particularly increased in Limassol and Larnaca, where a significant portion of coastal development and investment projects is concentrated.
Political initiative and reasons for tightening
The starting point for the legislative changes was proposals submitted to parliament in November 2025 by the AKEL party. The initiative provided for stricter rules for third-country nationals, as well as for companies with foreign participation. Later, representatives of other parliamentary factions and the Ministry of Interior joined the discussion, which led to the formation of a comprehensive draft law.
At the center of the debate were issues of national security and strategic control over the country’s territory. According to a number of MPs, significant areas of coastal zones have already come under the control of foreign structures, including affiliated or nominal development companies. Some transactions, it is claimed, were executed outside Cyprus, complicating state oversight.
Law without retroactive effect
During the Parliamentary Committee meeting, it was officially confirmed that the future law will not have retroactive effect. This means that transactions already completed and registered with the Land Department will remain valid. This clarification became a signal for investors to accelerate the processing of current purchases in order to avoid possible restrictions in the future.
It is expected that the new rules will primarily affect transactions involving land plots, especially in agricultural and rural zones, as well as in areas located near strategically important facilities. At the same time, the purchase of residential houses and commercial real estate in general will remain permitted, but with additional conditions.
Restrictions and new requirements for foreign buyers
The draft law provides for establishing a maximum property area that third-country nationals will be allowed to acquire. It is also planned to ban the purchase of land in rural and agricultural areas and to introduce a mandatory minimum ownership period, which may amount to at least five years.
The main goal of the changes is to curb the mass purchase of land through proxy persons, a practice that became widespread during the “golden passport” program. After its closure, the Cypriot authorities strengthened control over investment flows, seeking to balance capital attraction with the protection of national interests.
Balance between investment and national interests
The Chairman of the Parliamentary Committee on Internal Affairs, Aristos Damianou, noted that the regulation is aimed at protecting the country’s long-term interests. At the same time, the Chairman of the Fiscal Council, Michalis Persianis, emphasized that foreign investment plays an important role in Cyprus’s economy but should not become the sole benchmark of state policy. In his view, the absence of a strategic approach may lead to rising housing prices, social inequality, and market overheating.
In 2026, the Cyprus real estate market remains one of the key drivers of the economy, especially in coastal cities. However, tighter regulation indicates a shift toward a more balanced development model, where issues of security and sustainability are placed on a par with capital attraction.
It is expected that final approval of the law’s text will be completed in the coming weeks so that Parliament can adopt it before its dissolution in early April. Until that time, the activity of foreign buyers is likely to remain elevated, continuing to influence transaction dynamics in the Cyprus real estate segment.