Law regulating self-catering rentals enacted February 21, 2020
In 2020, a new law was passed in relation to self-catering holiday rentals, The Regulation of the Establishment and Operation of Hotels and Tourist Accommodations (Amendment) Law of 2020 N. 9(I)/2020 (also “the Law”), regulating the registration and operation of self-catering accommodation.
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).
Conditions for renting a self-catering type of accommodation
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:
It should be noted that the application carries a fee that will vary according to the type of self-catering accommodation. As of today, the registration fee is €222 and is also paid upon each renewal.
A submitted application must contain all the relevant details and characteristics of the property, such as its technical specifications, and evidence that it has been built as per the building permit and planning permission issued by the appropriate authorities. The submitted application must also be accompanied by documentation proving that the self-catering unit has been registered with the Tax Department and has received either a Tax ID or a VAT no., depending on which is applicable.
Where the owner of the unit is not a Cyprus tax resident, income tax will be payable in Cyprus, as it will be considered as tax arising from income from immovable property and/or business. Proof must also be provided that the unit is insured against any danger including fire and public liability.
The Deputy Ministry of Tourism shall examine each application within 2 (two) months from the date of submission of the application and upon a successful application, each self-catering accommodation will be provided with a registration number and a licence.
It is important to emphasise that we will be required to display the property’s registration number on every advert and/or any form of marketing for your property/s, as well as in all relevant transactions. Failure to do so is considered an offence that could carry a prison sentence of up to one (1) year and/or a fine not exceeding five thousand euros (€5,000).
The registration licence will not be issued for an indefinite period of time. It shall be valid for 3 (three) years only and upon its expiry, the owner will need to apply for its renewal.
Under this new Law, The Deputy Ministry of Tourism will now be entitled, to carry out inspections of self-catering accommodations. It will be entitled to check whether a self-catering accommodation has a valid registration licence and, where it does, to also check whether the licence terms are being honoured by the owner/operator of the accommodation.
Grace period for current owners
It should be noted that any persons operating self-catering accommodations prior to the enactment of the Law, will have a grace period of 2 (two) years to conform with the new Law and regulations. New owners, however, who wish to rent out their properties will have to register their units immediately. Failure to conform with the Law after the expiry of the grace period, will constitute an offence and the advertising and/or providing of services of self-catering accommodations in Cyprus without a registration license is now illegal.
The two-year grace period will be ending on the 21st of February 2022.
A licence application can be made online by visiting https://shrtm.nu/nu58