A draft law aimed at addressing the increased money-laundering risks in the real estate sector has been prepared and placed in public consultation by the Financial Services Division of the Ministry of Finance.
As noted in the explanatory memorandum accompanying the draft law, the need to strengthen preventive measures in the real estate sector arises from the National Money Laundering/Terrorist Financing Risk Assessment, the findings of the Mutual Evaluation Report of the Republic by the MONEYVAL Committee of the Council of Europe, and recent experience of the competent authorities
These actions also fully align with government policy to enhance measures against financial crime and to reinforce the Republic’s position as a credible international financial centre.
The draft law, titled the “Prevention and Suppression of the Proceeds of Crime (Amendment) Law of 2026,” will remain open for public consultation until 14 February on the “e-consultation” platform.
Specifically, the Ministry’s explanatory memorandum states that the preventive supervision in the real estate sector will be entrusted to the Tax Department. It clarifies that “regulated entities” will include all professionals who, in the ordinary course of business, buy or sell real estate or represent buyers or sellers in property transactions and are not already designated as an obligated entity under AML law subject to another supervisor.
The explanatory memorandum highlights that the need for enhanced measures is identified in the European Union’s 2022 Real Estate Money-Laundering Risk Assessment, which notes that “the real estate sector is significantly exposed to money-laundering risks and particularly vulnerable to tax-related crimes.”
Under the new EU regulatory framework (e.g., Regulation (EU) 2024/1624), the scope of AML obligations explicitly extends to real estate agents and other professionals involved in property transactions, and supervision must be conducted by a public authority, consistent with FATF and EU standards.
Consequently:
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Supervision of real estate agents for anti-money-laundering and counter-terrorist financing (AML/CFT) purposes will be transferred from the Register of Estate Agents to the Tax Commissioner’s jurisdiction.
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All other professionals in the real estate sector not already supervised by another authority will also fall under this AML supervisory framework.
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Entities such as credit institutions or credit acquisition firms that already conduct property transactions and are supervised by the Central Bank of Cyprus will continue under that authority for AML/CFT matters relating to those transactions.
The explanatory memorandum explains the rationale for assigning supervision to the Tax Department, noting its role in real estate transactions and existing AML responsibilities (e.g., for dealers in high-value goods), as well as cost-efficiency compared with creating a new supervisory authority.
The draft law aligns Cyprus’s domestic legislation with the new EU directives and international AML standards, aiming to strengthen legal and practical measures in the real estate sector, reduce vulnerabilities, and support the country’s financial integrity.
(Source: InBusinessNews)
