No Restrictions Imposed on Short-Term Rental Property Owners in Cyprus
On Tuesday, March 4th, the Cyprus Attorney General's Office dismissed a proposal by the Ministry of Tourism to cap the number of short-term rental properties that an individual or legal entity can register.
The initiative, spearheaded by Tourism Minister Kostas Koumis, aimed to regulate the rapidly expanding short-term rental market, which is largely dominated by platforms such as Airbnb. Koumis proposed limiting each owner to a maximum of two rental properties, citing concerns over the increasing acquisition of apartments by investors—many of whom are foreign buyers—who register them for short-term rentals without maintaining adequate service standards. According to him, this imbalance places traditional hotels, which must comply with strict regulations and operational costs, at a competitive disadvantage.
Among the key concerns raised by Koumis were:
- Lack of regulation – Unlike hotels, short-term rental properties are not subject to stringent licensing and hygiene requirements.
- Rising housing costs – The surge in investment-driven property purchases is making housing less affordable for local residents.
- Unfair competition – While hoteliers must comply with extensive tax and regulatory obligations, many short-term rental property owners operate with fewer restrictions, creating an uneven market.
Currently, Cyprus allows investors to own and rent out up to 12 apartments without significant limitations, making short-term rentals a more lucrative business than traditional hospitality—a situation that has frustrated the hotel industry.
Despite the Attorney General's decision to reject the proposed restrictions, discussions on potential regulations remain ongoing. The Parliamentary Trade Committee is set to explore measures to bring Cyprus’ short-term rental market in line with the latest EU directives. Future proposals may introduce stricter registration requirements, enhanced taxation policies, and higher service standards to ensure fair competition and better market oversight.
Source: Cyprus Mail