Cyprus is edging closer to stricter regulation of property purchases by third-country nationals, as lawmakers examine a package of legislative proposals targeting national security risks, housing affordability and legal loopholes.

The proposals were discussed at the House Interior Committee, where political parties, the Legal Service and the Cyprus Bar Association outlined sharply differing views on the scope and impact of the reforms.

AKEL General Secretary Stefanos Stefanou defended two draft laws submitted by the party, stressing that uncontrolled land acquisitions in sensitive areas pose risks to the Republic.

He pointed to sales and growing interest near airports, military camps, the ceasefire line and coastal zones, including large plots east of Larnaca and west of Limassol.

“Our goal is not to ban foreign buyers,” Stefanou said, “but to regulate acquisitions based on criteria that protect the country, fertile land and housing access.”

AKEL’s proposals include:

• A ban on foreign acquisition of forest or agricultural land, and property near the ceasefire line or critical infrastructure

• Limiting third-country nationals to one apartment or one house

• Preventing indirect acquisitions through foreign-controlled companies

• Closing legislative gaps that allow large-scale land ownership

Cabinet approval would not be required for one apartment or house up to 200 sq.m., a shop up to 200 sq.m. or an office up to 300 sq.m., including for companies controlled by foreigners.

The Legal Service told MPs that no constitutional issues have been identified in AKEL’s proposals.

DISY MP Nikos Georgiou said the party supports reform of what it considers an outdated legal framework, but warned against measures that could harm investment.

“We need quality foreign investment,” he said, “but also safeguards to protect the public interest and land ownership.”

DISY has tabled its own proposal focusing on modernising procedures while maintaining Cyprus’s attractiveness to investors.

In a detailed memorandum, the CBA warned that the proposed measures raise serious issues of constitutionality, proportionality and legal certainty, despite their stated aim of strengthening oversight.

The association said the proposals could undermine: Freedom of contract (Article 26 of the Constitution), and Property rights (Article 23 and the ECHR).

It expressed particular concern over proposals preventing the Land Registry from accepting deposited sale contracts before compliance checks, noting that contract deposit does not transfer ownership but serves a protective legal function.

The CBA also highlighted ambiguities over square-metre thresholds, lack of clear documentation requirements and the absence of decision deadlines, warning these could effectively freeze transactions.

Four proposals are under discussion:

• Two from AKEL, focusing on limiting uncontrolled foreign ownership

• One from DISY, aimed at legislative modernisation

• One from members of the Audit Committee, targeting indirect purchases via Cypriot companies

The CBA has urged lawmakers to redraft the proposals, calling for clear, proportionate and constitutionally sound measures. It also reiterated its position that property sale contracts over €100,000 should be mandatorily prepared by lawyers, to enhance transparency and legal certainty.