Why Build-to-Rent is gaining ground in Cyprus and Greece
For decades, housing policy in Cyprus and Greece centred on homeownership — subsidies for first-time buyers, favourable loans and tax relief. That is now changing. Both governments are actively promoting long-term rental housing as a pillar of housing strategy, not just a temporary fix.
This shift matters for property buyers, investors and expats. It signals a more stable, regulated rental market and opens new opportunities for those willing to develop or invest in professionally managed rental properties.
Cyprus: Planning incentives and state-led rental projects
In September 2024, President Nikos Christodoulides announced two new housing schemes for young people and families, including the release of 570 state-owned plots across all districts. The government has rolled out over ten housing programmes with a total investment exceeding €300 million, adding more than 5,500 new homes to the market. The strategy rests on three pillars: more housing, faster licensing and better use of state land.
To support these goals, the Ministry of the Interior introduced two incentive schemes for private developers:
- Planning Incentives scheme – allows an increase of up to 45% in the permitted floor area ratio (FAR) for eligible developments.
- Build-to-Rent scheme – provides similar FAR bonuses for projects designed specifically for long-term rental, provided a portion of units is offered at affordable rents.
In March 2025, Interior Minister Konstantinos Ioannou confirmed that applications under these schemes correspond to the gradual construction of more than 2,500 homes over the next two years, of which around 400 will be affordable housing. The Build-to-Rent scheme was revised after an evaluation to make it more attractive to developers.
The state is also pushing ahead with its own rental projects: around 500 affordable rental homes on state land, built by private developers and managed by the Cyprus Land Development Corporation, with completion expected by 2029.
Greece: Tax breaks for long-term rentals
Greece is moving in a similar direction with different tools. In October 2024, a package of 11 housing measures was presented. Two directly target renting:
- Build and Rent programme (Kataskevazo-Noikiazo) – provides an income tax exemption on rental income for companies that build new homes or convert existing buildings into housing, provided the homes are let on long-term leases of at least ten years at a pre-set rent.
- Tax exemption for empty homes – homeowners whose properties have been vacant for at least three years qualify for an income tax exemption on rental income for the first 36 months, provided they rent under a lease of at least three years.
These measures illustrate how the emphasis is shifting towards making more properties available for long-term rental. Organised rental housing is no longer an add-on but a pillar of housing policy.
What this means for property investors and developers
The importance of these incentives becomes clearer when you consider how rental developments are financed. An apartment block built for sale pays for itself when flats are handed over. One built for rent pays for itself gradually, through many years of rental income. That requires long-term capital and a stable, predictable framework.
Government incentives can make a meaningful difference:
- Planning incentives in Cyprus improve the financial viability of Build-to-Rent projects by allowing more floor space.
- Tax exemptions in Greece reduce the tax burden on rental income, improving returns.
These measures can also encourage greater participation from professional developers, institutional investors and property management companies focused on the long-term operation of residential properties.
Cyprus and Greece are not alone. In several European markets, Build-to-Rent has already gained significant momentum. Research by Cushman & Wakefield highlights growing interest in professionally managed rental housing, reflecting the potential of the model to support long-term residential development and expand housing supply.
Practical considerations for buyers and investors
If you are considering investing in Build-to-Rent in Cyprus or Greece, keep the following in mind:
- Check the current eligibility criteria for planning incentives or tax exemptions with a Cyprus lawyer or tax adviser — rules may change.
- Understand the affordable housing requirements: in Cyprus, a portion of units must be offered at affordable sale prices or rents to qualify for FAR increases.
- Consider the long-term nature of rental investments: returns come gradually, so secure patient capital and professional management.
- For properties in the north of Cyprus, title deed risks remain significant — seek independent legal advice before committing.
Key takeaways
- Cyprus and Greece are shifting housing policy from homeownership to long-term rental, with new incentives for Build-to-Rent projects.
- Cyprus offers up to 45% FAR increase for eligible developments, plus state-led rental projects with 500 affordable homes due by 2029.
- Greece provides income tax exemptions on rental income for Build-to-Rent projects and for renting out previously vacant homes.
- These measures improve the financial viability of rental developments and encourage institutional investment.
- Always verify current rules with a qualified professional before making investment decisions.