The H2020 European research project GHOST - Safe-Guarding Home IoT Environments with Personalised Real-time Risk Control - aims to deploy a highly effective security framework for IoT smart home residents through a novel reference architecture for user-centric cyber security in smart homes providing an unobtrusive and user-comprehensible solution. The aforementioned security framework leads to a transparent cyber security environment by increasing the effectiveness of the existing cyber security services and enhancing system's self-defence through disruptive software-enabled network security solutions. In this paper, GHOST security framework for IoT-based smart homes is presented. It is aiming to address the security challenges posed by several types of attacks, such as network, device and software. The effective design of the overall multi-layered architecture is analysed, with particular emphasis given to the integration aspects through dynamic and re-configurable solutions and the features provided by each one of the architectural layers. Additionally, real-life trials and the associated use cases are described showcasing the competences and potential of the proposed framework.