According to Tranio, Cyprus is launching grants for first-time buyers, a 40-day permit regime and tax incentives for landlords to expand housing supply in 2025.
According to Tranio, the number of households in Cyprus reached a record 347,000 in 2025 (+0.93% year on year), with 1.47 dwellings per household – one of the highest ratios in Europe, partly because about 28% of the housing stock is not occupied year-round. Yet affordability is strained: based on a median equivalised disposable income of EUR 17,482 (2024), a two-adult household earns roughly EUR 34,964 a year, so an average home price of EUR 270,000 equals more than 7.7 years of household income. Mortgage demand has been stagnant for three years amid high rates, pushing more locals into the rental market, where they compete with relocating expats – especially in Limassol. Tranio describes three measures introduced by the authorities. First, a non-repayable grant for citizens under 41 covering up to 50% of the cost of a first home, with an extra compensation of up to EUR 10,000 for people with disabilities; the property must be up to 100 sq m, the only home of the buyer and used as a permanent residence. Second, a permit reform: since January 2025, low-risk projects (single-family and two-unit houses) get a 40-day deadline for all permits, and if no decision is made the permit is considered granted. From March 2025 the reform extends to medium-sized projects – up to 12 townhouses or 20 apartments – with a deadline of up to 80 working days. Third, owners of properties vacant for more than a year can receive a renovation compensation (from EUR 5,000) if they rent the home at a rate 30% below market. Tranio notes that tenant requirements (EU citizenship, no other housing, a minimum two-year lease) narrow the pool, but rental income is reported to be fully exempt from income tax and the defence contribution, and enhanced depreciation allowances apply. Tranio expects new and previously blocked projects to reach the market in 2025–2026 and stresses that location choice becomes key: areas with a visible oversupply may see price pressure and tougher rental competition. In Limassol, the largest concentration of listings is in Germasogeia, Agios Athanasios, Zakaki, Kato Polemidia, Mesa Geitonia and Neapolis, though high activity does not necessarily mean an overheated market. This article is informational and not legal or tax advice.