A bill to regulate and tax Airbnb-style rentals, which was tabled in June 2018, has moved a step closer following meetings between Deputy Minister of Tourism Savvas Perdios and the heads of Airbnb and Booking.com according to a report in the Greek-language newspaper Phileleftheros.
According to the report, the parties have apparently reached a deal on how tax on short-term rental income could be collected.
Speaking to MPs, Perdios advised that both organisations could charge landlords a ‘tax’ that could be refunded to the Tax Department. Perdios also advised that he had been in touch with the Tax Commissioner to see if this approach would be the most appropriate and efficient method of collecting this tax.
In June this year MPs completed discussions on the bill regulating the operation of short-term property rentals. As it stood at that time the bill provided a three-year transition period to landlords giving them time to acquire a VAT number and comply with safety and health regulations. It was hoped that the bill could be placed before the plenum before parliament broke for the summer recess.
There are somewhere in the region of 20,000 properties in Cyprus that are rented via Airbnb and other platforms and although some owners are paying tax on the rental income generated, other manage to avoid paying tax.
Greece introduced legislation some time ago to tax annual rental income: 15% on income up to €12,000; 35% for income between €12,000 and €35,000; and 45% on income above €35,000. Similar legislation has been introduced in the Netherlands, Britain, Germany, Spain and other European countries.