The purpose of the fifth version of the UN Plan for Cyprus, which was put to twin referenda on 24 April 2004, was to provide for a comprehensive settlement of the Cyprus problem. However, it was rejected by 76% of Greek Cypriots whilst being accepted by 65% of Turkish Cypriots. The Plan, which came to be called 'the Annan Plan' after UN Secretary-General Kofi Annan, attempted to tackle the major aspects of the Cyprus problem, such as the constitutional, territorial and property questions, plus a plethora of other issues such as the budgetary/financial provisions, federal laws, international treaties, etc. It aimed to provide for a solution based on the principles of bizonality and bicommunality and the formation of a federal state, consisting of two constituent states, one predominantly Greek Cypriot (called 'the Greek Cypriot State') and the other predominantly Turkish Cypriot (called 'the Turkish Cypriot State').
The Greek Cypriot community exercised its right to vote and reject the Annan Plan, and the Plan is not likely to emerge again. However, the problems vis-à-vis the property question and its effect on economic performance remain. In order to understand the dynamics of convergence and property markets under any solution that may be proposed in the future, it is important first to understand how property markets would operate under the scenario that was set out in great detail in the Annan Plan.
Indeed, one of the most important questions – if not the most important one – which the proposed plan was supposed to tackle was the property issue. As a result of the events of 1963–64 and 1974, a significant number of property owners from both communities became dispossessed. Thus, in both communities the referendum campaigners who were arguing either in favour of or against the Plan in 2004 often based their arguments on the effects of the Plan's provisions on this crucial aspect of the Cyprus problem – the property question.
This report aims to carry out a thorough examination of the technical apparatus of the regime proposed in the fifth and final version of the Annan Plan (Annan V) for resolving the property aspect of the Cyprus problem. In doing so, we do not consider the property regime of Annan V from its human, legal, social or political angles. We attempt, instead, a 'technical economic analysis' of the Annan V provisions on property, which includes an analysis of the macroeconomic environment and the functioning of the property markets and the economics of the 'Property Board' as described in Annan V.