For years, housing policy in Cyprus and Greece revolved primarily around homeownership: subsidies for the purchase of a first home, favorable loans, and tax breaks for homebuyers. In recent years, however, housing policy has begun to take on a new dimension. Cyprus and Greece are seeking ways to increase the housing supply, not only by utilizing existing properties, but also by offering incentives for new developments intended from the outset for long-term rental.
This is not merely a technical change. Renting is beginning to be viewed as an integral part of housing policy rather than a temporary solution.
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On September 13, President Nikos Christodoulides announced two new housing plans for young people and families, including the allocation of 570 state-owned plots of land across all districts. As he noted, since taking office, more than ten housing programs have been implemented with a total investment of over 300 million euros, while more than 5,500 new homes have been added to the market. He summarized the strategy along three main lines: more housing, faster permitting, and the utilization of state-owned land.
At the core of this strategy are two incentive programs from the Ministry of the Interior: the Urban Planning Incentives and the Build to Rent program. Through these, development companies receive an additional floor area ratio of up to 45%, with the obligation to make some or all of the additional units available at an affordable price for sale or rent.
In March, Interior Minister Konstantinos Ioannou stated that applications for the incentives correspond to the phased construction of more than 2,500 housing units over the next two years, of which approximately 400 will be made available on the affordable housing market. The Minister described Build to Rent as one of the two key schemes that have attracted strong interest from the construction sector. Following its evaluation, the plan was revised to make it more attractive.
At the same time, the government is also promoting its own rental projects: approximately 500 affordable rental housing units on state-owned land, to be built by private developers and managed by the Cyprus Land Development Organization, with completion scheduled for 2029.
Greece: Tax Incentives for Rental-Only Housing
Greece is moving in the same direction, but with different tools. On October 24, a package of 11 housing measures was presented, two of which directly concern renting.
The first is the “Build-to-Rent” program, Greece’s version of “Build to Rent.” The framework for this program was established this summer and provides for an income tax exemption on rental income for companies that build new residential units or convert buildings intended for other uses into residential units, provided that they are leased on a long-term basis—for at least ten years—at a predetermined rent.
The second measure concerns vacant homes. Owners of homes that have been vacant for three years and are returned to long-term rental, with a lease of at least three years, are exempt from income tax on rent for the first 36 months. The measure is already in effect, and its extension through the end of 2027 is included in a bill expected to be passed in November.
The Greek example shows that organized rental housing is no longer viewed as a supplement, but as a standalone pillar of housing policy.
Why do these incentives matter?
An apartment building constructed for sale is paid off upon delivery of the units. An apartment building constructed for rent is paid off gradually, through many years of rent. This means that long-term capital and a stable, predictable framework are needed.
This is precisely where incentives come into play. An additional floor area ratio in Cyprus or a tax exemption in Greece changes the calculations enough to make an investment viable that would otherwise result in apartments for sale. This attracts institutional investors, professional developers, and property management companies, who have an interest in maintaining the building for years to come.
In several European markets, Build-to-Rent has already established a significant presence, attracting investors seeking long-term positions in organized rental housing portfolios. According to Cushman & Wakefield, the private rental and Build-to-Rent sector is expected to be the most profitable segment of the residential market by 2026.
Incentives alone, of course, are not enough. Land and construction costs, financing, and the speed of the permitting process will determine how many of these units will ultimately reach the market.
What’s Changing for Renters
For renters, the difference is clear. Homes designed from the outset for rental typically feature modern energy efficiency, common areas, and professional management, with clear terms and immediate response to repairs. And because the owner is an organization that plans for the long term, the tenant can count on greater stability.
This also changes the way we view renting. It shifts from a choice born of necessity to a conscious decision for those who want flexibility, quality, and a home without the obligations of ownership.
Cyprus and Greece are taking different paths, but they arrive at the same conclusion: the housing crisis cannot be solved by purchase subsidies alone. New housing supply is needed, and a significant portion of it must consist of homes designed for long-term rental.
How quickly results will be seen will depend on implementation. The direction, however, is now clear. Renting is moving from the margins to the center of housing policy.
