Cypriot Real Estate is Perfect for Short-Term Rentals. Especially if it is located close to the sea or in a picturesque historical center. At the same time, obtaining a license is simple and fast.
On average, you can rent an apartment near the Mediterranean coast for 150 euros per day, while prices for villas start at 270 euros per day. The longer the rental period, the lower the cost. Property owners usually cover the utility expenses. Anyone who is legally allowed to generate income in the country should take note of this business opportunity.
While long-term rental prices rose by approximately 50% in early 2023, the cost of short-term rentals increased by less (+30%). This is not only due to the overall population growth but also to increased expenses for landlords. Previously, it was sufficient to pay income tax and municipal fees, but now a registration fee has been added.
Those who want to delve into the topic of daily rental property regulations will find it useful to familiarize themselves with the Cypriot Law on the Regulation of the Establishment and Operation of Hotels and Tourist Accommodations, which served as the basis for the introduced innovations three years ago.
For a long time, the Cyprus Tourism Association (STEK) sought to regulate the activities of popular online platforms such as Airbnb and Booking.com since their scale had grown immensely, but not all entrepreneurs conducted their business on legal grounds. The treasury was losing millions of euros each year. However, this is the case in many other popular tourist destinations in Europe as well. Starting from July 2021, the Deputy Ministry of Tourism of the Republic of Cyprus strictly monitors transactions directly on the rental platform.
The government requires properties to be registered in the National Registry and obtain an individual number in order to start or continue earning income from short-term rentals of specific properties. Currently, about 20,000 properties are being rented through online platforms, and all of them are required to have a license number.
To properly register a property for rental, it is necessary to obtain a registration serial number in the National Registry (better to do it a couple of months before the hot tourist season). To register, you need to fill out a special form on the website www.tourism.gov.cy, sign it, and send it back in PDF format. Several documents and compliance with specific conditions are required:
- Identification document of the applicant.
- Permission for the construction of the property.
- Only completed projects can be registered. Buildings undergoing reconstruction or repair are not eligible.
- Both houses and apartments can be registered.
- The application can be submitted by an individual or a legal entity.
- A representative of the owner can submit the application, provided that the appropriate authorization (power of attorney) is sent.
- A recent invoice from the electricity company EAC will also be useful.
- The taxpayer identification number must be available.
- Valid property insurance must cover fire incidents and civil liability.
- The requirements for the layout of premises must be met. For example, a 3-bedroom apartment must have at least 2 bathrooms.
The process of obtaining a license takes approximately 1 month from the date of application, so it is important not to delay as tourists make reservations well in advance.
The registration fee for each housing unit is 222 euros for 3 years. Thus, accommodation search websites now require the number of this license. Moreover, the transaction has become transparent. Platforms are obligated to provide the government with all data regarding the number and value of transactions for tax calculations. Income tax is calculated based on annual profit. Amounts below 16,000 euros are exempt from taxation. Additionally, landlords also pay VAT, which results in increased costs for luxury properties.
In Cyprus, short-term rentals are widespread throughout the island, as all cities to some extent are tourist destinations. However, the most desirable region for tourists is still the eastern coast of Famagusta, where the areas of Protaras, Ayia Napa, and Paralimni are located. Here, you can relax on the pristine beaches with soft white sand and azure waters.
In the area of the free territories of Famagusta, over 60% of real estate properties are successfully rented out for short-term stays. Despite the fact that housing prices have increased on average by 15% in the past year, and short-term rentals have risen by 30%, it can be concluded that this region is one of the most promising for entrepreneurs, as stated by Maryna Komarnytska, the regional manager from the DOM agency.
The simplest way to rent out property for short-term stays is to use the services of a professional property management company that organizes a continuous flow of clients and is always there to provide advice and assistance. Obtaining a license is mandatory for every owner.
Studies confirm that last year alone, over 80,000 properties were identified in Cyprus that were rented out without the appropriate license. This number is comparable to the overall volume of the island's hotel business. Therefore, active checks of landlords for compliance with housing registration conditions began in early 2022.
An interesting observation: when leaving rented accommodation, tenants in Cyprus often leave the keys in the mailbox. This says a lot about society and local customs.
Interested in property on the island? Visit DOM, the number one real estate agency in Cyprus! The agency's website features the largest property database in the country, with over 30,000 residential and commercial properties throughout the island. Choose and contact professional brokers who will help you make the right choice!
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