Cyprus, Italy and Greece — facts, implications and early signals
The first half of January 2026 delivered several concrete and verifiable developments across the Mediterranean property market. These were not speculative forecasts or political statements, but implemented tax reforms, confirmed capital investments and officially announced residency changes.
Together, these developments offer an early look at how Cyprus, Italy and Greece are positioning their property markets for the coming years.
Below is a detailed, fact-based breakdown — followed by a practical interpretation of what this means for buyers, owners and investors.
Cyprus: Property Tax Reform Enters into Force (1 January 2026)
What has changed — confirmed facts
As of 1 January 2026, Cyprus implemented a set of tax reforms affecting real estate transactions. According to official summaries and market analysis, the reform focuses on simplifying property-related taxation rather than introducing new levies.
Key confirmed elements include:
- Removal of certain outdated transaction charges, including stamp-duty-related burdens on specific property considerations
- Expanded exemptions and flexibility in capital gains tax (CGT) when property is exchanged rather than sold in a traditional cash transaction
- Clearer treatment of restructuring scenarios, such as asset swaps, ownership reorganisation and property consideration in non-cash forms
The reform does not abolish property taxation altogether, but reduces friction in legitimate transactions, especially for long-term owners and repeat buyers.
Why Cyprus introduced these changes
The stated objective is to modernise the tax framework so that it better reflects how property is actually used today — including upgrades, exchanges and portfolio restructuring — rather than penalising mobility within the market.
This aligns Cyprus with broader European efforts to:
- discourage artificial transaction barriers
- improve compliance through clarity
- maintain attractiveness to foreign buyers without reintroducing incentive schemes
What this means in practice
For buyers and owners, this translates into:
- Lower indirect costs during certain transactions
- Greater predictability when planning an exit or upgrade
- Improved legal clarity, particularly for complex ownership scenarios
Importantly, this is not a demand-boosting stimulus. It is a structural clean-up, aimed at making the market easier to navigate rather than artificially inflating prices.
Cyprus: €17 Million Institutional Investment in Paphos
Confirmed investment
In early January 2026, a Southern European institutional hotel investor committed €17 million to a premium resort project in Paphos. This marks the investor’s first strategic entry into the Cypriot market, rather than a portfolio reshuffle.
The investment targets an upscale, established location rather than a speculative development zone.
Why this matters beyond tourism
Institutional investors of this scale typically operate with:
- 10–20 year investment horizons
- extensive due diligence on infrastructure, zoning and long-term demand
- a preference for politically and legally stable jurisdictions
Their decisions are rarely driven by short-term tourism cycles alone.
Broader implications for the property market
Historically, similar investments tend to coincide with:
- sustained infrastructure upgrades
- increased residential demand in surrounding areas
- gradual upward pressure on property values near premium developments
For homeowners and prospective buyers, this suggests that Paphos is being viewed as a long-term, year-round destination, rather than a purely seasonal resort market.
Italy: Forecasted Market Outperformance in 2026
What the data indicates
According to market analysts cited in January 2026 reports, Italy is expected to outperform most EU countries in real estate market growth this year. The projection is driven by transaction volume recovery rather than aggressive price inflation.
Key drivers identified include:
- structurally limited new supply
- renewed domestic demand
- returning international buyers, particularly in lifestyle regions
Why Italy is regaining momentum
After several years of relatively subdued activity, Italy benefits from:
- a large stock of under-renovated property now being absorbed
- strong appeal for second homes and relocation
- improved market liquidity compared to the post-pandemic period
Unlike some Northern European markets, Italy’s growth is not based on rapid leverage expansion, but on gradual demand normalisation.
What this means for buyers
In practical terms:
- quality properties are selling faster
- price growth is more pronounced in prime and semi-prime areas
- competition is increasing for move-in-ready assets
Italy is once again viewed not only as a lifestyle destination, but as a relatively stable long-term property market within Southern Europe.
Greece: A Strategic Shift in the Golden Visa Programme
Confirmed policy change
In January 2026, Greece announced an expansion of its residency pathways under the Golden Visa framework. While property investment remains valid, a new route focused on business and start-up investment has been formally introduced.
This marks a diversification of entry options rather than a cancellation of property-based residency.
Why Greece is doing this
The shift reflects a policy decision to:
- attract economically active residents
- reduce reliance on purely passive capital inflows
- support domestic business and innovation
This approach mirrors similar adjustments seen in other European residency programmes.
Potential impact on the housing market
While too early for measurable data, the expected effects include:
- reduced visa-driven speculative buying
- moderation of demand in high-pressure residential zones
- a more balanced mix of owner-occupiers and investors
For buyers focused on long-term ownership, this may gradually improve affordability dynamics in popular regions.
What These Four Signals Tell Us Together
These developments point to a shared direction across Mediterranean markets:
- Cyprus is prioritising legal clarity and transactional efficiency
- Italy is entering a phase of organic market recovery
- Greece is recalibrating demand sources rather than expanding them
None of these countries are aggressively stimulating their markets. Instead, they are refining frameworks, favouring stability over short-term acceleration.
Final Takeaway
The first weeks of 2026 show that Mediterranean property markets are becoming:
- more regulated, not restricted
- more selective, not closed
- more long-term oriented, not speculative
For buyers and investors, the key advantage lies in understanding structure, not chasing headlines. Early awareness of these changes allows for better timing, clearer expectations and more resilient decision-making.
