The north’s ‘parliament’ on Thursday passed a law clamping down on foreigners buying property.
Foreigners are now only allowed to buy one house or apartment each, provided that it is located on less than 2,500 square metres of land. Turkish citizens are exempt from the new law.
This is a reduction from the previously allowed three houses or apartments, which were allowed to be located on a maximum of 5,000 square metres of land each.
In addition, those wishing to buy land for investment purposes are able to buy a maximum of 60,000 square metres of land if they invest €20 million in the fields of industry, education, or health in the north. Previously, the required investment was only €3m.
The new law also states that the north’s authorities are able to confiscate land bought by foreign buyers if it is found that the required €20m investment has not been made.
The previous “50 per cent plus one” law for land purchases has also been scrapped.
Previously, if a consortium buying land for investment was more than 50 per cent owned by Turkish Cypriots, it was considered a local investment. Now, if even one per cent of a consortium is foreign owned, it will be subject to the restrictions placed on foreigners.
The loophole of foreigners buying property and not registering themselves as the owners has also been closed, with harsher penalties now possible for those who fail to declare themselves as property owners.
Those who own property in excess of the new limits have been given six months to declare their property to the north’s land registry and two years to sell off what they must to comply with the new law.
The north’s cabinet can use its own discretion to allow property owners as much as three years to sell their property in exceptional circumstances, while those found to be in violation of the above laws will be fined 500 times the north’s minimum wage.
With the north’s minimum wage currently standing at €975 per month, the fine is now €487,500.
However, not all foreigners will be subject to this change. The new law allows for “citizens of countries which recognise the TRNC” to be subject to the previous limits. At present, only one country recognises the ‘TRNC’ – Turkey.
It has been speculated that the tightening of rules on property in the north has been linked to Turkey’s efforts to combat money laundering in the hope of escaping the Financial Action Task Force (FATF)’s grey list.
Turkey was placed on the grey list in 2021, meaning it is under “increased monitoring”, but has “committed to resolve swiftly the identified strategic deficiencies” in its fight against money laundering.
In February, Turkish Finance Minister Mehmet Simsek said his country’s government is “committed to do whatever it takes to take Turkey out of the grey list”, while the FATF made a visit to Turkey in May.
The restrictions also come amid heightened concern among Turkish Cypriots regarding the north’s changing demographics amid a construction boom and arrivals of large numbers of foreigners buying property.
Earlier this month, opposition party CTP leader Tufan Erhurman had warned that there may be “no Turkish Cypriots left” in some areas of the north, and that the north is “heading towards the point of no return”.
He mentioned the village of Ayios Amvrosios, where many properties have been bought by foreigners, and Kazivera, where multiple high-rise apartment blocks are now being built.
On Kazivera, Lefka Tourism Association chairman Hasan Karlitas spoke on Monday of a “pillage of construction” and added that the Lefka region does not have the infrastructure required to support such developments.
“There is no infrastructure, and water resources, roads, the environment, and the region’s unique values and comparative advantages are not being taken into consideration at all,” he said.
This rang particularly true earlier this week, when the owner of the only road connecting Kazivera with the local coastal road was blocked by the private owner of the land on which it is located.
He said he had asked for an alternative road to be built, and that the north’s authorities had not met his request.
Trikomo has been transformed more than anywhere else in the north by high-rise apartment blocks, with the flat plains surrounding the village now filled with buildings as tall as 25 storeys high.
Like Kazivera, Trikomo’s infrastructure is not equipped to deal with such a property boom, and as such, vacuum tankers had to be bought to ferry sewage out of the village and to Famagusta so as not to overwhelm the sewage system.
However, this week, local authorities discovered that the vacuum tankers were dumping the raw sewage onto waste ground on the side of the road.
