09.01.2023
Short term rentals attract visitors, both for leisure and work, both from Cyprus and abroad. It is now considered a social must for those looking for a simple, quiet, secluded and, of course, cheap accommodation.
Some properties are interesting for their location and the amenities they offer and attract visitors who want to experience luxury not found in their own home. The availability of furnished villas, houses and apartments in tourist, rural or special areas revitalizes and expands our country’s tourism product, provides employment and helps the local economy.
Promoting them through well-known, successful platforms allows stakeholders to select housing quickly, easily and safely. Guests’ comments about their experience during their stay are a kind of assessment that helps in the selection.
The demand for short-term rentals is growing every year, and the state has found it necessary to regulate it through the Ministry of Tourism in order to control the industry, collect taxes and protect the population.
The government has allowed sufficient time for their property to be registered in a registry set up for this purpose, making such registration mandatory by law. The grace period for registration ends on February 6, 2023. The registration fee for each property is 222 euros for three years, and the housing is divided into three categories: villas with tourist furniture, houses with tourist furniture and apartments. When registering, institutions are assigned a special sign and a registration number. They are included on every platform where accommodation is advertised and must appear in all related transactions.
The relevant legislation is the Ordinance on the Establishment and Operation of Hotels and Places of Accommodation for Tourists, L. 9(I)/2020, and the law amending it, L.7(I)/2022. Part IIIA of the law prohibits the owner of an online platform from listing accommodation that does not have a registration number. Notably, income from such rentals is subject to income tax and VAT in accordance with the provisions of the relevant applicable laws, as well as fees payable to local authorities.
Anyone who wants to rent a property for a short period, with the permission of the owner of the property, must submit an application along with a declaration, as well as pay a registration fee. The declaration serves to confirm registration with the tax authority and provide tax and / or VAT identification number, relevant information about the housing and its minimum technical and operational characteristics, as well as an insurance policy covering all risks, fire and public liability.
Upon registration, a special sign and registration number are issued. The first registration permit is valid for three years from the date of issue. The permit is renewed every three years for a period of three months prior to its expiration.
The Ministry of Tourism is authorized to use accommodation information either for statistical purposes or to promote the country’s tourism infrastructure. An ex-officio check may also be carried out at any time in order to verify that the license has been granted and that the registration conditions have been met.
A permit may be revoked if it was obtained on the basis of false or misleading information, or if the business has ceased operations or the necessary details of the registration license have not been renewed.
In addition, the permit may be revoked if the operator is convicted of serious offenses related to safety and health in the workplace, or crimes related to drugs, domestic violence, human trafficking and exploitation of people, or other serious criminal offenses specified in the law. Or if an injunction has been issued to terminate the operation of the property, or the property is consistently in violation of the law.
George Koukunis is a lawyer practicing in Larnaca and founder of George Coucounis LLC, Advocates & Legal Consultants
