Limitations to Foreigners

1. Are there in your national system any limitations to foreigner citizens or foreign companies/companies controlled by foreign citizens regarding the acquisition of immovable properties? If yes:

As regards the acquisition of immovable property by foreigners, special procedural requirements and certain limitations are set out in the Immovable Property Acquisition (Aliens) Law, Cap. 109. The law regulates the acquisition and ownership of immovable property by foreigners and imposes certain restrictions on the size of immovable property to be purchased and its use.

District Officers have been granted the authority to implement the Immovable Property Acquisition (Aliens) Law, Cap. 109.

1.1. Which legal regulations regulate in your country the prohibitions or limitations for foreigners’ acquisitions in case of transfer of property? Please specify the legal regulation and/or the range of the regulation that contains the prohibition.

The acquisition of immovable property in Cyprus by non-Cypriots is regulated by the Immovable Property Acquisition (Aliens) Law, Cap. 109. The law regulates the acquisition and ownership of immovable property by foreigners and imposes certain restrictions on the size of immovable property to be purchased and its use.

On 12/12/2012, the Ministry of Interior announced that non-EU/third-country nationals may acquire more than one unit of immovable property in Cyprus, with the aim to invite investment into Cyprus (from third countries) and to strengthen the licensing policies regarding migration to Cyprus. According to the Law, third country nationals are imposed with certain restrictions while purchasing immovable property in Cyprus.

These are as follows:

a) A building plot or a piece of land not exceeding 4014 sq.m for the construction of a house thereon to be used as private residence OR
b) Two residential units in the same building development on condition that such units are in proximity (horizontally or vertically) where such units relate to a house or flat where unification into one unit is possible or,
c) One residence unit and one shop, the latter not exceeding 100 sq.m. or,
d) One residence unit and one office, the latter not exceeding 250 sq.m..

In the event of a married couple, the above restrictions will apply to the couple as if the couple is a single applicant (one entity). It should be noted here that in case of a married couple, only one permit will be granted.

1.2. What do these limitations consist of?

On 12/12/2012, the Ministry of Interior announced that third country nationals are imposed with certain restrictions while purchasing immovable property in Cyprus. These are as follows:

a) A building plot or a piece of land not exceeding 4014 sq.m for the construction of a house thereon to be used as private residence or,
b) Two residential units in the same building development on condition that such units are in proximity (horizontally or vertically) where such units relate to a house or flat where unification into one unit is possible or,
c) One residence unit and one shop, the latter not exceeding 100 sq.m. or,
d) One residence unit and one office, the latter not exceeding 250 sq.m..

In the event of a married couple, the above restrictions will apply to the couple as if the couple is a single applicant (one entity). It should be noted here that in case of a married couple, only one permit will be granted.

1.3. Do these limitations apply to any foreign citizen, regardless their nationality, or only to non-EU Members national citizens?

According to the provisions of the Immovable Property Acquisition (Aliens) Law, Cap.109, an “alien” is defined as any person who is not a Citizen of the Republic of Cyprus, including:

1. A company controlled by aliens
2. Foreign company and
3. A trust the beneficiary of which is an alien

The term “alien” does not include:

1. Alien Cypriot
2. Alien wife of a citizen who is not separated from her husband by virtue of an order of a competent court
3. A citizen of an EU member state whether s/he has permanent residence in Cyprus
4. Companies incorporated according to the laws of an EU member state

1.4. Do these limitations have?

• A defensive/protective purpose
• An economic purpose
• «Both economic and defensive/protective purposes«
• «Other purposes (please specify)»

«Although government policy aims to invite/attract investment from third countries into Cyprus, limitations apply in order to prevent extensive and disproportionate alien ownership on an uncontrolled and unrestricted scale, which might lead to an artificial rise in prices and in all other relevant costs (including construction and consumption) to the detriment of the economy and the local population. Additionally, limitations are imposed to strengthen the licensing policies regarding migration to Cyprus.»

2. To which kind of land registry unit do these limitations apply? (Example: only land plots, only rural areas, only foreign borders, dwellings and homes, other buildings?

The said law applies to any type of immovable property to be purchased and its use, according to decisions of the Council of Ministers.

3. To which kind of transfers or burdens do these limitations apply? (Example: to every transfer, non-free transfers, differently in case of inheritance than in case of purchase, mortgages in favor of foreigners….)

No foreigner may acquire immovable property in Cyprus, other than by reason of death, without the prior permission of the Council of Ministers. Thus, limitations do apply for all types of transactions.

4. Apart from the previous limitation to acquisition of property by foreigners, are there any other measures at your country relevant for this topic? (Example: pre-emption rights in case of purchase un favor of a foreigner, social or residential measures bases on nationality and non in residential permits….)

N/A to DLS.

5. To what extent the land registrars’ controls in a deed of transfer the prohibitions imposed to foreigners to acquire land and buildings in your country?

EU citizens are entitled to acquire immovable property in Cyprus without any restrictions.

According to the law and current policy measures, non-EU citizens (i.e. foreigners) can purchase immovable property, nevertheless, permission must be sought from the Council of Ministers (via the District Officers) by written application, which must be submitted by the non-EU citizen purchaser after the contract of sale is signed.

As regards the acquisition of immovable property by foreigners, special procedural requirements and certain limitations are set out in the Immovable Property Acquisition (Aliens) Law Cap 109. The law regulates the acquisition and ownership of immovable property by foreigners and imposes certain restrictions on the size of immovable property to be purchased and its use.

The Department of Lands and Surveys plays a significant role in enforcing prohibitions on foreigners acquiring land and buildings. District Lands Officers ensure that deeds of transfer comply with relevant regulations and restrictions, according to the permission granted under the Immovable Property Acquisition (Aliens) Law, Cap. 109. No transfer of property is completed, unless the permission is granted and all conditions therein are fulfilled.

5.1. Do you only check if the transfer administrative authorization requirement is met, or do you also confirm that the authorization is valid? For example, do you consider property type, like rural or forestry classification, which might limit foreign transfers? Or do you verify the percentage of foreign land ownership in a specific area, especially if there are restrictions on the number of buyers or land size?

The above controls are the responsibility of the District Officers, who have been granted the authority to implement the Immovable Property Acquisition (Aliens) Law, Cap. 109.

5.2. What would happen if an authorization were needed, and it does not come with the title submitted for registration?

The Department of Lands and Surveys will not proceed with the registration of title in the foreigner’s name without the written authorization of the competent District Officer

5.3. What would happen in case a deed of inheritance in favor of a foreigner transfers property over land or buildings subject to limitations for foreigners’ acquisitions in your country?

Although legal issues related to property acquired by reason of death are governed by inheritance law, the authority of the Council of Ministers to grant permits under this law was vested to the District Officers to whom the relevant applications are submitted.

5.4. If the states have preemption right in case of transfer, would you reject the registration if no notification to the state to enhanced it right is done?

N/A

6. Do you expect any legal modifications on this issue?

This is not known since the Department of Lands and Surveys is not responsible for the implementation of the relevant legislation, which can be modified accordingly, based on governmental policy and ministerial decisions.