Airbnb and other platforms providing short-term rentals for accommodation in Cyprus have become very popular recently, allowing more people to commercially exploit their properties and driving upwards renovations and related services. Short-term rentals provide a unique and cost-effective experience for guests as houses and flats in Cyprus have their own style and design.
In light of this, the House of Representatives of the Republic of Cyprus recently passed a new amending Law regulating short-term touristic and self-catering accommodation. The governing law is the Regulation of the Establishment and Operation of Hotels and Touristic Accommodation (Amending) Law 2020 (9(I)/2020).
The aim was to upgrade the quality these services offer, increase public revenue and incentivise the number of short-term rentals and tourism in remote locations such as agro touristic locations. So what are the requirements of the people who rent their properties on Airbnb and other platforms related to short term rental licenses?
Introduction to Short-Term Rentals in Cyprus
Cyprus has become a popular destination for tourists, and the demand for short-term rentals has increased significantly. This surge in popularity has led to a thriving market for vacation rental properties, offering unique and personalized experiences for visitors. Recognizing the need to regulate this growing sector, the Cypriot government has introduced specific laws to govern short-term rentals. These regulations aim to ensure that rental properties meet certain standards, providing a safe and enjoyable stay for guests while also protecting the interests of property owners. In this section, we will provide an overview of the short-term rental market in Cyprus and the requirements for operating a short-term rental property.
Requirements of the New Amending Law for Airbnb in Cyprus
The new amending law for Airbnb in Cyprus requires property owners to obtain a license to operate a short-term rental property. This license is issued by the Cyprus Tourism Organization (CTO) and is valid for a period of two years. To obtain a license, property owners must meet several requirements, including:
The property must be registered with the CTO.
The property must meet specific health and safety standards to ensure the well-being of guests.
The property must have a valid certificate of occupancy, confirming that it is suitable for habitation.
The property owner must possess a valid tax identification number, ensuring compliance with tax regulations.
These requirements are designed to maintain high standards in the short-term rental market, ensuring that all rental properties are safe, legal, and properly managed.
Regulations and Compliance
Property owners who operate short-term rental properties in Cyprus must comply with several regulations to maintain their licenses. These include:
Registering the property with the CTO.
Ensuring the property meets health and safety standards.
Obtaining and maintaining a valid certificate of occupancy.
Possessing a valid tax identification number.
Paying an annual fee to the CTO.
Providing the CTO with specific information about the property, such as its address, the number of bedrooms and bathrooms, and the maximum number of guests allowed.
Compliance with these regulations is crucial for property owners to legally operate their short-term rental properties and avoid potential penalties.
Requirements of the New Amending Short Term Rental Law for Airbnb in Cyprus
Application for the registration of short-term self-catering accommodation:
The application must be accompanied with an affidavit by the applicant, reassuring that the required conditions are met, it should state all information and details about the accommodation, the minimum technical and operational standards, and insurance coverage for any risk, fire and civil liability. Properties used as short-term rentals must be the owner’s primary residence to comply with local regulations and licensing requirements.
The application must be registered at the Tax Department, and a registration number will be given to each landlord. Furthermore, the registration serves another purpose apart from monitoring this type of accommodation, which is that the registration number will be provided at the relevant online platforms, suggesting that the property is approved by the Government.
The registration license must be renewed every three years.
The Cypriot law sets out the criteria for categorisation of short-term accommodation, which are touristic and fully furnished villas, touristic and fully furnished houses, and apartments (Annex V of the Law).
Specific conditions and standards must be met, following the categories mentioned above (Annex V of the Law).
The timeframe for an existing accommodation to comply with the registration, health and safety is two years.
If a short-term accommodation constitutes a short term rental unit in a co-owned property, there is not a requirement of an existing management committee or consensus to be reached by the owners for the use of such unit as short-term self-catering accommodation.
Costs for Registration of an Airbnb in Cyprus
The cost for registration of a short-term rental property in Cyprus will vary. Obtaining a vacation rental license involves additional costs, including fees for the license itself and the examination of the application. It will be calculated accordingly, taking into consideration the expenses of the examination of an application etc.
Taxation and VAT
Property owners who operate short-term rental properties in Cyprus are required to pay taxes on their rental income. The tax rate is set at 10% of the rental income and is paid annually. In addition to this, property owners must also pay Value Added Tax (VAT) on their rental income, which is currently set at 19%. These tax obligations are essential for property owners to fulfill, ensuring they remain compliant with Cypriot tax laws and avoid any legal issues.
Guest Management
Property owners who operate short-term rental properties in Cyprus must also comply with certain guest management regulations. These include:
Providing a written contract to the guest, which outlines the terms and conditions of the rental.
Submitting a copy of the contract to the CTO.
Keeping a record of all guests, including their name, address, and contact information.
Providing guests with essential information about the property, such as its address, the number of bedrooms and bathrooms, and the maximum number of guests allowed.
Adhering to these guest management regulations is vital for property owners to ensure a smooth and professional operation of their short-term rental business, enhancing the overall guest experience and maintaining compliance with the law.
Services we can provide for your property
We can help you with the regulations and registration of your Airbnb property in Cyprus, assist with the taxation and obtaining the required licence. We also provide specialized services for accessory dwelling units, ensuring they meet all eligibility and compliance requirements. To learn more about our services related to properties click here