The Audit Office has sounded the alarm over serious gaps in Cyprus’s legal and administrative framework governing property acquisitions by foreigners, warning that existing loopholes allow extensive ownership through companies without effective oversight.

In its latest special report released today, focused on the Nicosia District Administration but with implications for the entire island, the Audit Office concludes that the current system creates only a “formal” set of restrictions, which in practice can be bypassed.

The report highlights that while the law theoretically restricts non-EU nationals to two properties for residential or business use, these limits are meaningless once foreigners establish or acquire shares in EU-registered companies — including Cypriot ones. Since the 2011 legal amendment aligning Cyprus with EU law, such companies are not considered “foreign” and face no restrictions.

This, the Audit Office warns, has left an “open window” for unlimited acquisitions by foreign interests, without the state defining strategic safeguards, despite other EU member states imposing targeted limits for reasons of security, public health, or economic interest.

The report presents a series of striking statistics:

• In 2024, 15,797 property sales were recorded across Cyprus. Of these, 4,321 (27.35%)* went to non-EU foreigners, while 1,907 (12%) went to EU citizens. Only 61% of sales were to Cypriot buyers — a figure that includes Cypriot companies controlled by foreigners, meaning the real foreign share is significantly higher.

• By district, Paphos stood out with 44.2% of property sales going to non-EU foreigners, followed by Larnaca (33.9%), Limassol (26.5%), Famagusta (26.7%), and Nicosia (7.7%).

• In Nicosia, almost all (98.8%) of foreign applicants between 2020–2024 declared “residential use” as the purpose, reflecting how business-related acquisitions are routed through companies.

• The Audit Office reviewed 32 foreign purchase cases in Nicosia from 2020–2024, with a total value of €9.4 million. In 4 cases, buyers also acquired a second property worth an additional €2.22 million, again declaring residential use.

• The nationality breakdown of 2024 applicants in Nicosia shows concentrations from China (16%), Lebanon (16%), Russia (14%), and Israel (10%), with smaller but notable shares from Syria (6%), Egypt (5%), Ukraine (4%), UK (4%), and Canada (2%). The remaining 23% were spread across other countries.

• Beyond direct sales, ownership also shifts through 9,746 active assignment contracts, where nationality is not recorded, further obscuring the true scale of foreign acquisitions.

* The Audit Office stresses this number is “artificially low,” since it excludes transactions made through Cyprus-registered companies controlled by foreigners. In reality, foreign ownership is significantly higher, though no reliable data exists to measure it.

The investigation found that District Administrations lack objective criteria to assess the financial standing of applicants, nor do they examine the origin of funds used to purchase property. Bank account statements were often inadequate to match the value of acquisitions, while no checks were conducted on whether funds came from legitimate sources.

The computerized system “Allodapoi” (Foreigners), used since 1999 to track applications, is described as outdated and riddled with gaps. Efforts to upgrade it have failed for 25 years, leaving authorities unable to reliably detect multiple property holdings or monitor compliance.

Perhaps most strikingly, the report notes that there is no mechanism to monitor how properties are used once approval is granted. Despite rules allowing purchases strictly for residence or professional premises, there are no inspections to ensure compliance, raising the risk of large-scale tourist rentals or speculative use.

General Auditor Andreas Papaconstantinou warns that Cyprus must urgently define a new national policy on foreign property ownership, balancing economic benefits with geopolitical and social risks. Such a policy, he notes, should modernize legislation, introduce clear safeguards, and align with EU law — which allows restrictions in the name of strategic national interests.

Without action, the Audit Office concludes, Cyprus risks losing effective control over a large share of its property market to foreign-owned entities, with little transparency and no reliable statistics to inform policy-making.