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August 20, 2020

Decline in Cyprus property sales to foreigners

The first seven months of 2020, from January to July, has seen a 43% decline (compared to 2019) in property sales in Cyprus to foreigners, according to official statistics.

Unsurprising, perhaps, considering the Covid-19 pandemic and subsequent travel ban. However, according to Cyprus Property News, this decline is not a recent one with sales of property to non-Cypriots falling since June 2019.

It is the dramatic decline of property sales to non-EU purchasers, in particular, down by 46%, that is startling as non-EU citizens have always accounted for the lion’s share of total foreign sales.

Whiles sales in Limassol, Nicosia and Larnaca fell by 48%, 38% and 22% respectively, sales in Famagusta fell 90%.

The decision by Cyprus parliament to vote into law two bills aimed at tightening the existing Cyprus citizenship by investment programme has no doubt had a negative effect on property sales to non-EU citizens.

Following criticism by the EU of Cyprus’ CBI last year, when the EU flagged it as a potential money-laundering risk, the Cypriot government has been keen to clean up, putting a temporary freeze on the programme in January 2020, while it discussed various reforms aimed at tightening regulations.

On July 31, Cyprus Parliament approved two proposed regulations set to strengthen the  country’s citizenship by investment programme’s due diligence processes.

One of the latest amendments to be passed specifies that a condition of the CBI programme is that at least €100,000 goes towards the national solidarity fund for depositors who lost funds during the 2013 haircut, as well as bondholders.

Other new regulations proposed include sanctions for a Cyprus passport holder who has broken the law, as well as holding the service provider, who assists investors in filling their application, more accountable by carrying out strict due diligence procedures.

Find more information about Cyprus’ citizenship by investment programme in our country profile by clicking here