The interior minister on Monday revealed a set of ambitious goals for next year, including making housing affordable and slashing red tape.
Constantinos Ioannou was speaking in parliament during a presentation of his ministry’s budget for 2026.
The ministry’s 2026 balance sheet comes to €780 million – €28 million more than the 2025 approved budget and around €130 million more than what was actually spent this fiscal year.
The 2026 budget, said Ioannou, has “a strong social and growth orientation”.
It is geared toward housing policy, tying up loose ends relating to the reform of local government, simplifying the building permits process, reorganising the civil defence system and making preparations for Cyprus’ presidency of the EU Council during the first half of 2026.
Ioannou said the government places a great deal of emphasis on affordable housing. This runs along two main tracks – providing building incentives and increasing the housing stock, which it is hoped will help drive down prices.
The minister spoke of a “housing crisis” that a segment of the population continues to face.
The government schemes include incentives to developers and the ‘Build to Rent’ scheme – through which additional building ratios ranging from 25 to 45 per cent are granted in a bid to increase the housing stock in urban and interurban areas.
A building ratio is the ratio of a building’s total floor area to the area of the plot it sits on.
So far, said Ioannou, the results of these two schemes are “especially encouraging”. Over the next two-year period, the schemes are expected to generate 1,476 new residential units, of which 251 classed as affordable.
Meantime the simplification of the building permits process is ongoing for developments classed as low-risk and medium-risk.
Low-risk developments refer to the construction of one or two residential units. Medium-risk developments are complexes with a maximum of 12 residential units or four-story apartment buildings with up to 20 units and a basement.
In October 2024, the interior minister issued a decree lifting the obligation to obtain a building permit for low-risk projects.
Under this system, building permits are automatically granted based on a pre-developed checklist. Applicants must complete all necessary points on this list, and if all conditions are met, construction can begin without further approvals.
A number of conditions must be met for a project to be exempt from requiring a building permit. For example, the building project must not interfere with road infrastructure development plans, no more than two residential units can be built on a single plot, all zoning and regulatory provisions must be adhered to, and the land must not be located in a conservation zone.
According to Ioannou, the expedited permit process has cut approval time down to 40 days for single dwellings and duplexes, and to 80 days for buildings with up to 20 apartments.
To date, under this fast-track process, 1,328 applications have been filed for single dwellings and duplexes, and 253 applications for buildings with up to 20 apartments.
“This means that more than 3,500 families will permanently solve their housing needs within a short period of time,” the minister claimed.
The government will meanwhile keep the ‘Ktizo’ scheme geared at displaced persons. It comes under a government plan to rebuild unsafe refugee housing estates. The scheme involves demolishing condemned buildings and constructing new, affordable housing units for eligible residents. Some residents can receive a one-time grant to find their own housing, while others will move into the new government-subsidised apartments, with some contributing a portion of the cost.
The interior ministry’s budget includes €83.8 million in allocations for refugee housing.
Ioannou also promised to continue rationalising the management of Turkish Cypriot properties located in the south. Measures include a drive to collect on overdue rents, on-site inspections, and introducing objective criteria relating to the eligibility of Greek Cypriot displaced persons to lease such properties.
During the next year, the minister said, approximately 1,000 buildings will be classed as listed. Generous incentives would be given for upkeep and re-use of these buildings.
A major policy for 2026 involves restructuring civil defence. The government plans to establish a ‘national civil defence mechanism’ – bringing these functions under a single operations centre.
The interior ministry will evolve into the ‘Ministry of the Interior and Civil Defence’ – absorbing the fire department as well as forestry department personnel who deal with forest fires.
In addition, during 2026 the government intends to complete the deployment of the Public Early Warning System.
