- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Cyprus in the dock over second home restrictions

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.