Significant investments and new initiatives aimed at tackling Cyprus’ ongoing housing crisis are being promoted by the Ministry of the Interior, with the goal of offering practical solutions to thousands of households struggling to find affordable homes.
With a budget allocation exceeding €35 million for 2026, the government is continuing the housing programmes launched in 2023, focusing on accessible and dignified housing for all. A key feature of this housing policy is the free allocation of additional building coefficients, which increases housing supply without adding financial burdens on citizens.
The government’s main objectives are to expand the national housing stock and boost citizens’ purchasing power, particularly among vulnerable groups.
According to a briefing note submitted to parliament ahead of Monday’s budget discussion, the Ministry’s housing policy for 2026 will centre on the following key actions:
1. Build to Rent Scheme
The continuation of urban incentives and Build to Rent Schemes will allow developers an additional 25–45% in building coefficients, aimed at increasing overall housing supply, with an emphasis on affordable housing, especially in urban and suburban areas.
According to the ministry, the results so far are encouraging. Applications submitted up to October 2025 are expected to yield 1,476 new housing units within the next two years, 251 of which will be affordable. Additionally, the incentive scheme has already generated €8 million in revenue for the Cyprus Land Development Corporation, which will use the funds to build affordable homes for purchase or rent.
2. Relaunch of Housing Support Schemes
The government plans to relaunch the Housing Schemes for the Revitalisation of Mountain, Rural, Disadvantaged and Border Areas, with updated provisions to cover a broader range of beneficiaries. These schemes, beyond supporting young people and families, aim to strengthen local communities and encourage regional development.
3. Student Halls
The Student Housing Grant Scheme will continue next year, with a budget of €8.3 million, targeting the revitalisation of Nicosia’s walled city through the creation of student residences and rooms.
4. Licensing Reform
A central pillar of the housing policy is the reform of the development licensing process, designed to simplify and modernise planning and building permit procedures.
For low- and medium-risk developments, the time required to issue permits has been reduced to 40 working days for single or semi-detached homes and 80 working days for apartment buildings with up to 20 units.
Since the reform’s implementation, authorities have processed 1,328 applications for single or semi-detached homes and 253 applications for small apartment blocks, enabling over 3,500 families to secure housing much faster.
The Ministry notes that beyond reducing delays and bureaucracy, the accelerated licensing process facilitates faster and more sustainable access to housing while returning more units to the market.
5. Control Unit for Major Developments
To ensure legality and transparency, the Ministry will establish in 2026 a special enforcement and inspection unitwithin the Department of Town Planning and Housing.
The unit will oversee on-site inspections of major and strategic developments, reinforcing both regulatory control and public confidence in the permitting process.
6. 20% Increase in Refugee Housing Grants
The refugee housing policy remains a cornerstone of the Ministry’s social strategy. The Service for the Care and Rehabilitation of Displaced Persons will continue implementing revised housing schemes aimed at modernising assistance for displaced families.
In addition, measures are being applied to repair and maintain housing units in self-housing settlements, government refugee estates, and Turkish Cypriot properties. The “Ktizo” Scheme is progressing steadily despite initial delays.
Following a Cabinet decision, displaced beneficiaries under the Revitalisation Housing Scheme for rural and mountain areas will receive a 20% increase in financial assistance under the 2026 programme.
A total of €83.8 million has been earmarked in the 2026 Ministry budget for refugee housing policy.
7. Management of Turkish Cypriot properties
A comprehensive management plan has been implemented to address past mismanagement and misuse of Turkish Cypriot properties, as well as revenue losses from the Custodian of Turkish Cypriot Properties Fund.
Key measures include:
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Intensified inspection of lease contracts.
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Special Action Plans for specific areas, notably Mackenzie.
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Revision of pricing policies and collection of overdue rents.
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Inspection and repair of properties before reallocation to new beneficiaries.
The revised legislation governing Turkish Cypriot properties now introduces a transparent and merit-based system for eligibility and scoring, ensuring fairness and equality among displaced persons.
8. Revision of Local Plans
The Ministry is advancing the revision of Local Development Plans for Cyprus’ four major urban areas, with completion expected within two years.
The goal is to modernise urban planning frameworks and align them with new technologies, turning local plans into dynamic, effective tools for sustainable development.
In 2026, the first phase of rural policy zoning will be completed, and the first revised chapter of the national Spatial Policy Statement is expected to be published.
Following the adoption of the Urban Development Zones and Related Matters Law, ten pilot urban regeneration projects will also be launched across Cyprus in 2026.