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Cyprus in the dock over second home restrictions

The Republic of Cyprus may be about to face the wrath of the European Court of Justice over its delay in amending legislation restricting European Union and EEC nationals from acquiring second homes on the Island.

THE EU Court of Justice has announced that it has been introduced to hear the appeal of the Commission against the Republic of Cyprus concerning the acquisition of second homes by EU and EEA nationals.

The Commission considers that the Cypriot authorities should have amended the laws to remove the restrictions imposed on EU/EEC nationals buying second homes on the Island by 1st May 2009. In its appeal application the Commission said that these restrictions are a direct violation of freedom of the movement of capital set out in Article 63 of the Treaty on the Functioning of the EU.

According to the Commission, the Cypriot Government forwarded a draft law amending the restrictions and claimed that the draft had been put before the Council of Ministers for approval with the intention of examining the Bill and putting it to a vote by Parliament without delay.

The Commission highlighted the facts that a violation of the Treaty with provisions of national law of a Member State may only be lifted by the establishment as mandatory provisions. As a consequence, Cyprus cannot simply attach a draft law in their letter of reply. Such a letter has no regulatory force and cannot be treated as a removal of the existing restrictions on the acquisition of secondary homes by nationals of EU/EEA States.

By failing to adopt these new laws, the Commission considers that Cyprus has failed to fulfil its obligations under article 24 of the Act concerning its accession to the European Union.

(The Commission referred Cyprus to the EU Court of Justice on this matter last November)

Update

Earlier today the Cyprus Government has responded to the above report (which appeared in the Greek language media yesterday). It confirmed that the relevant changes to the law have been approved by parliament and that they were published in the Official Gazette of the Republic on December 16th, 2011.

The government is consulting with its Legal Services Department and anticipates that the EU Commission will arrange for the suspension of any legal action concerning this matter.

Readers' comments

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  • Mike says:

    Cyprus failing to implement EU legislation, surely not. There must be a raft of cases dated 1 May 2009 as that is when the five year grace period to adopt EU law into national laws expired.

    It must be lovely to act in all ignorance and in fairy land expecting the EU to accept a draft proposal as implementation of legislation. Such naivety and child like (the Greek being moronic) behaviour.

    We can always use the arrogant excuse and say ‘but this is Cyprus’ – it generally works.

  • out of the frying pan into the fire says:

    When the EU introduces a law that is enforced in Cyprus, to stop lawyers who lie, steal, insult, threaten, abuse the power of attorney and then apply that law to developers, there will be a blue moon and pigs will be on the runway at Gatwick.

  • Costas Apacket says:

    I’m glad the previous law prevented me from buying another damp concrete box that I still wouldn’t legally own.

    Every silver lining has a cloud!

  • @Dunn good – Clearly you were not well advised by your lawyer or your agent.

    Back in 2004, the law allowed foreigners to purchase as many properties as they wished but they could only have one of them registered in their name (i.e. they could only have the Title Deeds to one of them).

    The idea was to protect the Island’s property market from being raped by overseas buyers.

    Unfortunately you do not have a legitimate claim.

  • Dunn good says:

    According to this bulletin my wife and I may have a case against our Sales agent and their recommended Lawyer then.

    In 2004 we were shown two properties one we were to use as a holiday home the other as an investment. It was not explained to us that we were only allowed by Cypriot law to purchase just one property. There was no excuse as we used the same Agent. Also the same Lawyer registered them with the land registry and signed for the water and electric for both properties, so where do we stand now Nigel?

    The investment property has stood empty now for nearly six years with only two prospective purchasers in that period. Anyone want a two bed town house in Peyia ?

  • @Fighting For Justice – the restriction was lifted on 16th December 2011 – two and a half years after it should have been.

  • Fighting For Justice says:

    OMG!

    I never knew that this restriction hadn’t been lifted.

    Thank you Nigel. that’s a bit more evidence for my court hearing next week. IN THE UK UNDER CONSUMER LAW.

    More news will follow.

  • Costas Afortune says:

    Yet another EU law totally disregarded by these people! What on earth do they have to do, or how many rules and regulations can these people ignore before Euro MP s step in and say ” enough is enough” ! They happily come cap in hand to exercise their right to claim EU money to help build roads etc but certainly Do Not play by its rules.

    What with pensioners being beat up by builders, corruption seems to be at an all time high, complaints and legal action at an all time high thank you for warning other victims (investors) of the massive problems that lie within this once friendly and hospitable island.

  • andyp says:

    Great news!

    Lets all go and get fleeced again with EU approval.

  • Costas Apacket says:

    Was approval of the new law published in the Gazette between second hand car sales and one owner goats for sale?

    What a joke this Government is!

    If the law was passed did they actually tell anyone? The EU? The Consumer?

    Or do we all have to go down to our local newsagent and order a copy of the Gazette to comb through every month?

    The key question, as always in this land of nepotism, is who were the Government protecting through this act of cronyism and delaying tactics?

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