Cyprus reforms - a new construction system

Cyprus modernizes the construction industry — a new era of affordable housing and business development

The Government of Cyprus is actively implementing large-scale reforms in the field of construction and land use, aimed at simplifying permitting procedures, developing the construction industry and providing the population with affordable and high-quality housing. These changes are designed not only to solve pressing social issues, but also to create favorable conditions for attracting investment, economic growth and improving the quality of life on the island. The development of the construction industry has been declared one of the main priorities of the state policy of Cyprus. The President of the country Nikos Christodoulides has repeatedly emphasized the importance of this area for economic and social stability, noting the urgent need to create modern affordable housing, especially for young people and new families.

For the effective implementation of the planned reforms, a specialized structure has been created — the Department for the Coordination and Support of State Projects. Its task is to monitor the timely and high-quality implementation of nationally significant initiatives in the construction and related areas, as well as the application of the best European project management practices. This structure will work closely with ministries, municipalities, professional associations and public organizations to ensure effective communication, prompt resolution of emerging issues and adaptation of reforms to changing conditions.

Key areas of reform

The reforms cover a wide range of tasks, including:

1. Modernization and support of the construction industry, introduction of innovative approaches and technologies.
2. Development of a comprehensive housing policy with a social focus, ensuring the availability of housing for various categories of the population.
3. Implementation of the Build-to-Rent concept in combination with a review of urban planning incentives.
4. Increasing the efficiency and transparency of government agencies by reducing bureaucracy and introducing modern digital systems for filing and reviewing documents.

These measures are aimed at creating a favorable environment for the development of the construction business, attracting investment and improving the living conditions of Cypriot citizens.

Simplification of procedures and abolition of permits

One of the key elements of the reforms was the radical simplification and, in some cases, the abolition of mandatory permits for the construction of certain categories of facilities. From October 2024, construction of low-risk properties, such as one or two residential units, will be carried out without the need for a special permit. The new procedure provides for the automatic issuance of a permit, provided that all items on the checklist are filled in and meet the requirements. If all criteria are met, construction can begin immediately, without the need for additional approvals. For more complex properties (“medium risk”), such as a number of buildings with several apartments or houses, the procedure is also being optimized: accelerated application review periods are introduced (up to 80 working days), an electronic application system (Ippodamos) is used, and if there is no response from the authorities within the specified time frame, the permit is considered to be issued automatically. These measures are intended not only to reduce the administrative burden on municipalities, but also to stimulate the development of the construction market, ensuring transparency, speed and predictability of processes for all participants.

Support for Sustainable Development and a Green Economy

Construction and land use reforms are closely linked to the objectives of the transition of the Cyprus economy to sustainable development and the fulfillment of commitments to the green transformation. Particular attention is paid to the implementation of programs to simplify the receipt of loans for the installation of solar panels (the Solar Panels for All project). This allows residents of houses and apartments to receive financing for green energy systems, helping to reduce costs and develop renewable energy.
In addition, new construction standards involve the use of energy-efficient materials and technologies, which not only reduces the burden on the environment, but also allows residents to save on utility bills. The state is also developing a system of benefits and subsidies for developers who implement green solutions in their projects.

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Housing Policy and Financing

The Government of Cyprus has allocated significant funds — over €77 million — for new programs to provide the population with affordable housing, including both rental and purchase. These initiatives are aimed at increasing the volume of construction for the middle class and solving the housing shortage. Among the key measures in this area are:

1. Subsidizing mortgage rates for certain categories of citizens (young families, civil servants, healthcare and education workers).
2. Development of the rental housing sector, including the possibility of subsequent purchase of apartments by tenants.
3. Construction of new residential complexes with apartments at affordable prices in partnership with private developers.
4. Reconstruction and modernization of the existing housing stock, especially in rural areas and small towns.

In addition, a set of medium-term and long-term measures is being implemented, covering the revision of tax and pension mechanisms, improvement of the social support system and strengthening the fight against illegal migration in the interests of sustainable market development and the creation of a comfortable environment for living and working.

The importance of reforms for society and business

The comprehensive reform program is aimed at creating a new standard of quality of life in Cyprus, the formation of a sustainable, modern and transparent sphere of construction and land management.

For citizens, these reforms mean:

1. Increasing the affordability of housing by increasing supply, subsidizing mortgages and developing the rental sector.
2. Improving the quality of housing stock through the use of modern materials and technologies, as well as the reconstruction of existing buildings.
3. A more comfortable and environmentally friendly living environment, provided with «green» solutions and developed infrastructure.
4. Simplifying and accelerating the procedures for obtaining permits for the construction and reconstruction of housing.

For businesses, the reforms open up new opportunities:

1. Stimulating demand for the services of construction companies, architectural firms, manufacturers of materials and equipment.
2. Attracting local and foreign investment in the real estate sector and related industries.
3. Simplifying administrative procedures and reducing the bureaucratic burden on developers.
4. Developing public-private partnerships in the implementation of housing and infrastructure projects.

In the long term, these reforms contribute not only to solving the housing problem, but also to supporting business, attracting investment, developing infrastructure and increasing the country's competitiveness in the European market.

Thus, Cyprus is consistently moving towards its strategic goal of becoming an ideal place to live, work and do business, adapting to the challenges of the time and changing demands of society. Reforms in the construction and land use sectors play a key role in this process, creating the foundation for sustainable development and prosperity of the country. The Government of Cyprus demonstrates a comprehensive approach to the modernization of this important area, combining measures to simplify regulations, support “green” technologies, develop affordable housing and stimulate business. This gives hope for the successful implementation of ambitious plans and the achievement of the intended goals in the interests of the whole society. It remains to wish Cyprus success in the implementation of these ambitious plans and to express the hope that the positive results of the reforms will become tangible for every resident of the country in the very near future. Let these transformations open a new page in the history of Cyprus and serve as an example for other states striving to build a modern, efficient and socially responsible economy.