Interior Minister Constantinos Ioannou has announced a series of revisions to state housing schemes, including updated regeneration programmes for mountain, border and disadvantaged areas, as well as improvements to the Renovate to Rent and Build to Rent schemes.
Speaking at a press conference, the minister also presented a brief review of the performance of existing housing measures and outlined planning for 2026, linking housing policy to priorities under Cyprus’ forthcoming Presidency of the Council of the European Union.
Planning incentives and Build to Rent
During 2025, implementation continued of schemes aimed at increasing housing supply. The planning incentives and Build to Rent schemes attracted strong interest from the construction sector.
To date, 39 applications have been submitted for planning permits using incentives and additional building coefficients, translating into more than 2,500 housing units over the next two years, including 275 affordable units.
In a further 22 applications, developers opted to purchase additional building density, contributing €11.5 million to the Cyprus Land Development Corporation’s Special Affordable Housing Fund. These funds will support additional units for lower-income groups.
Based on ongoing interest, the ministry expects these figures to rise during 2026.
Following an evaluation of Build to Rent, specific provisions were revised to make the scheme more attractive. Developers will now be allowed to freely market the total permitted buildable area, while maintaining the obligation that all units produced through the additional building coefficient be offered at affordable rent for four years.
Renovate to Rent scheme revised
The Renovate to Rent scheme performed below initial expectations. A total of 76 applications were submitted, of which 40 were approved, 16 rejected and 20 remain under review. Approved grants amounted to €1.2 million.
After consultations with citizens and professional bodies, and in cooperation with the Cyprus Scientific and Technical Chamber, the ministry introduced several changes:
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Grant amounts increased by €5,000 per housing type.
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Eligibility extended to existing non-residential units, such as offices and commercial spaces, subject to change-of-use licensing.
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Expansion of the scheme to border and rural areas.
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Increase in the maximum permitted annual electricity consumption threshold from 200 to 500 kWh.
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Income ceiling for tenants raised by €5,000.
The aim is to make the scheme more attractive and contribute to short-term increases in available housing stock.
Cyprus Land Development Corporation
The government also highlighted the reactivation of the Cyprus Land Development Corporation as the executive arm of state housing policy.
With total state funding of €28 million and additional revenue sources secured, the organisation plans to deliver in 2026:
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244 affordable units for sale
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192 units for affordable rent
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135 subdivided plots across Nicosia, Larnaca, Limassol and Paphos
A foundation stone was recently laid in Limassol for a project implemented in cooperation with the municipality, where housing needs are considered particularly acute.
Affordable housing on state land
In December, the government announced a plan to construct around 500 affordable units on state land, with an investment exceeding €75 million and completion targeted for 2029. The scheme is intended to expand options for young people, young families and low- to middle-income earners.
Preparatory studies and documentation are currently under way.
Collective housing for workers
A separate scheme is being implemented for the construction of collective accommodation units for workers in industry, commerce and tourism. The initiative aims to address short-term housing needs while freeing additional units for the open market.
Although still at an early stage, the ministry reports emerging interest following its publication.
New student accommodation model
The housing policy framework is also being expanded to address student housing needs.
A new scheme will allow the construction of a modern type of student accommodation, distinct from traditional student halls. Units may consist of up to ten rooms, with reduced requirements for shared spaces.
For example, a five-room student unit could be built within 77 square metres of usable area. Shared reception areas and storage requirements are removed, while parking provisions are reduced to one space per five rooms.
Student accommodation units may be developed independently or combined with residential, commercial or office uses, and can be implemented in new or existing buildings, subject to licensing. Developments must be located within one kilometre of a registered higher education institution.
Measures to strengthen purchasing capacity
Alongside supply-side measures, the ministry continues programmes aimed at strengthening purchasing capacity, particularly for young people and families.
A financial assistance scheme for 400 young beneficiaries under 41 concluded in November, receiving 1,027 applications and allocating €14.5 million in grants.
Housing schemes for displaced persons also continued in 2025 under revised criteria, with 2,197 applications approved and total support amounting to €56.4 million.
Regeneration schemes revised
The regeneration schemes for mountain, border and disadvantaged areas, in place since 2019, received 2,892 applications between 2019 and 2025, with 2,027 approvals amounting to €77 million.
Revisions now include:
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A 20 percent additional grant increase for displaced beneficiaries.
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€5,000 increases to maximum grant ceilings and income criteria.
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Additional categorisation based on number of children, increasing support for large families.
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Higher ceilings for special constructions in mountainous and remote areas.
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Removal of minimum continuous residence requirements for Cypriot citizens.
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Ability to combine housing grants with energy upgrade schemes from the Ministry of Energy, potentially raising total support from €70,000 to €100,000.
Revised guides will be published on the ministry’s website in the coming days. Applications for the new call open on 2 March 2026 and close on 31 December 2027.
Licensing reform
The minister stressed that simplifying licensing procedures is central to tackling the housing issue.
Under the new digitalised framework, permits for low- and medium-risk developments are processed through accelerated procedures. More than 2,000 applications for developments of up to two homes were completed within 40 working days, while 627 applications for apartment buildings of up to 20 units were processed within 80 days.
More than 5,500 units have entered the construction pipeline approximately one year earlier than previously, which the ministry says will help ease market pressures.
European dimension
At European level, housing has emerged as a strategic priority. The European Commission is examining tools to support national housing strategies.
Under Cyprus’ EU Council Presidency, priorities will include boosting supply, strengthening investment, ensuring access to housing for all and promoting exchange of best practices among member states, with the stated aim of improving access to quality, sustainable and affordable housing across Europe.