Airbnb in Cyprus
Airbnb is a famous website for registering, finding and renting accommodation, which was founded in August 2008 and rapidly became very successful. It is an electronic platform which brings into communication the host and the customer, while, at the same time, is responsible for carrying out the booking process. This new way of renting accommodation has become widespread not only among young people, proving that many prefer this method of renting accommodation rather than the traditional way. Its name is an acronym for the original name of Air Bed and Breakfast.
Cyprus is now legally establishing the operation and control of these Airbnb−type accommodations. In particular, on 7th February 2020, the new procedure was published in the Government’s Official Gazette of the Republic of Cyprus, and accordingly the Regulation on the Establishment and Operation of Hotels and Tourist Accommodations (as amended) Law of 2020 (Law N.9(i)/2020) was put into effect, which should be read together with the regulation of November 2019 on the creation and operation of hotels and tourist accommodation (hereinafter ‘the legislation’) and regulates the permits and specifications of the Airbnb - type of accommodation, which, until now, was not part of the scope of the existing Cypriot law.
In addition, according to this legislation, anyone who owns accommodation and is interested in renting it out on a daily basis, from here on, is obliged to register the property in the Register of Self-Catering Accommodations. The most significant condition for the aforesaid registration is that the owner or the manager of the accommodation must be registered with the Tax Department (i.e. obtain a tax or VAT number, whichever is applicable).
This process is very significant for the local economy and it is estimated that it will restore a degree of order as opposed to the lack of control in this arena that has prevailed in the past.
Conditions for renting a self-catering type of accommodation
- The Self−Catering Accommodation shall bear the characteristics and specifications of a holiday residence and/or a privately-owned furnished holiday villa and/or a private residence.
- The Self−Catering Accommodation must be registered in the Register of Self−Catering Accommodation, which is kept by the Ministry of Tourism.
- The Self−Catering Accommodation must be ready for operation at the time of its registration and its registration permit must be renewed according to the provisions of the law.
- The owner and/or the beneficiary user, referred to as the business owner, (having the approval of the owner), may advertise and/or lease and/or rent a Self-Catering Accommodation that is registered in the Register of Self-Catering Accommodation and must have received a Registration Number which is indicated in the advertisement and/or in the promotion of the said accommodation, as well as in all the relevant transactions.
- The Self-Catering Accommodation that has been operating before the Regulation on the Establishment and Operation of Hotels and Tourist Accommodation of 2020 Law became effective, must comply with this Law within a grace period of 2 years. It is further stated that, after the expiry of this ‘2-year transition period’, the owner and/or the provider of electronic advertising platforms is prohibited from advertising and/or posting accommodation which has not been granted a Registration Number.
Creation of a Register of Self-Catering Accommodation
The Ministry of Tourism maintains a Register in which all Self-Catering Accommodation registered in the Republic is recorded. The owner or beneficiary user or business owner, having the owner's approval and/or the necessary authorization, must submit an application to the Ministry of Tourism in accordance with the type of accommodation as determined by the Ministry of Tourism, together with the specified registration fee per category of Self-Catering Accommodation and a Declaration, in which he has to declare the following:
- Registration with the Tax Office (owner or administrator's tax identification number or VAT, as provided under the relevant legislation);
- The relevant details of the Self-Catering Accommodation as well as its minimum technical and operational specifications;
- Insurance coverage of the Self-Catering Accommodation against any risk, including fire and civil liability;
- The Deputy Minister of Tourism, within two (2) months of the date of submission of the declaration, shall examine the application and inform the applicant regarding the approval or rejection of his application;
- By registering in the Register of Self-Catering Accommodation, the Ministry of Tourism issues a special logo and registration number which is posted and declared in all transactions and, at the same time, the first registration permit is issued and is valid for three (3) years from the date of issue;
- The registration permit shall be renewed every 3 (three) years at the request of the owner and/or the beneficiary user or business owner having the owner's approval, and/or necessary authorization, and has to be submitted within three (3) months before the expiration of the existing licence and by registering in the Register of Self-Catering Accommodation, the Ministry of Tourism is authorized to use information regarding the property for either statistical purposes or for promoting the country's tourist infrastructure.
In addition, the Deputy Minister of Tourism has been given the authority to carry out inspections of the accommodation, at its discretion, in order to check whether the property’s registration license is still valid and, if so, whether the terms of the licence are being complied with by the owner of the accommodation.
The Self-Catering Accommodation that is registered in the Register of the Ministry of Tourism, and therefore legally available and rented, is divided into the following three categories based on the present legislation:
- Furnished villas for tourists: This, includes furnished villas that have independent and direct external access, privacy and the landscaped garden belonging exclusively to the owner.
- Furnished houses for tourists: This, includes furnished houses in a row or in a complex of detached houses which have autonomous operation, private, shared or public outdoor access and privacy. This category does not include furnished houses or apartments for tourists in apartment buildings or areas with a shared stairway, since independent access and privacy is not guaranteed.
- Apartments: This includes apartments which are a unit as defined in the provisions of the Law on Real Estate (Occupation, Registration and Evaluation). It is noted that, under the above legislation, a unit means ‘a floor or section, or floor, room, office, apartment or store or any other part or space of a common building that can be conveniently and comfortably occupied and rented as a complete, separate and independent unit for any purpose for which a building permit has been obtained’.
The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Leandros Constantinou, Associate at Michael Kyprianou & Co LLC, via email Leandros.Constantinou@Kyprianou.com or by calling at +357 26 930 800.