Renting your property in Cyprus is a good way to earn money while you’re not using it, but a law that came into force in January 2020 requires those wishing to rent their property as self-catering accommodation and short-term holiday rentals to obtain a license.
The new law 9(I)/2020 amended the current ‘Law on the Regulation of Establishment and Operation of Hotels and Tourist Accommodations of 2019 (N. 34(I)/2019)’ and is designed regulate the operation and licensing of Self-Catering Accommodation in Cyprus.
The process of obtaining a license is relatively straightforward and I am grateful to Lyn Hill, who has obtained a license to rent his apartment in Paphos, for the following article in which describes the process:
Dear Property Owner
There is a new Law for renting property in Cyprus. It comes into force soon and at the moment it may seem all a bit overwhelming but I have just registered and obtained a license. With assistance from reliable professionals, it all went Okay and didn’t take long.
I want to share my experience with you.
Concerned or frustrated by the need to register your villa or apartment?
I would like to draw your attention to a very important development that will shortly affect you if you rent your property in Cyprus; but firstly, a brief introduction about me.
I purchased my property in 2006, I am the Chairperson of our development and over the years have dealt with numerous disputes with our developer.
I was instrumental in the highly successful Swiss Franc Campaign against the banks that resulted in substantial compensation being awarded to many owners who were encouraged to take out CHF loans to purchase their properties.
Apart from this I have devoted a huge amount of my time on the thorny issue of Title Deeds.
My personal experience of renting & how the new Law affects us all
I have rented my property in Cyprus for a good number of years and a while ago discovered that in January 2020 the Cypriot Government passed a new Law; ‘The Regulation of the Establishment and Operations of Hotels and Tourist Accommodation Law 34(1) 2019‘.
This new law is aimed, inter alia, at regulating Self-Catering property rentals. I understand that there are tens of thousands of properties in Cyprus that are currently unlicensed and not subject to any form of regulation.
A new authority, the Tourist Establishment Licensing Directorate, has therefore been set up to regulate the Self-Catering holiday market.
How to & why you must register
To be able to rent your self-catering accommodation you must complete and submit an application to register your property with the new Directorate.
For owners operating self-catering accommodation prior to the enactment of the new Law in January 2020, there is a period of grace of 2 years to register and obtain a license in order to continue renting their property.
On making a successful application you will receive a registration number along with a license. To advertise your property for rent either through one of the larger tourist companies or your property management company your unique registration number must be displayed.
For more recently acquired properties owners are required to register their properties immediately and obtain a license under the new law.
This new Law WILL be policed and fines levied
Please note that failure to comply with the new law is an offence consequently renting self-catering accommodation post January 2022 without a registration license is illegal and can result in a substantial fine being imposed.
Post COVID and getting back to normal
I was determined to continue to make best use of my property, particularly after the dreadful year we have just had as a result of COVID, so I researched the new law and its regulations but more importantly I sought advice from Christodoulos G Vassiliades & Co. LLC (CGV), the same law firm that achieved the excellent outcome in the Swiss Franc campaign.
CGV provided advice and introduced me to InterTaxAudit (ITA), a prominent firm of Cyprus accountants, together they guided me through the registration process. The application was made ‘online’, it is quite involved requiring a number of documents to be provided, the first step is to register with the Cyprus Tax Authorities and obtain a unique identity number which ITA arranged.
Once registered a submission to the Tax Authorities needs to be made each year. The application was made and in less than 3 weeks was approved. I am now in possession of a license and registration number.
The fee charged by the Ministry of Tourism was €222 and lasts for 3 years.
Reliable professionals who will help you
If your intention is to continue renting your apartment registering your property and obtaining a license is mandatory. If you want professional assistance to do this successfully, please contact Kyriakos Hadjikyriakou at ITA quoting the reference ‘LCH’.
ITA will take care of the first step which will involve registering with the Cyprus Tax Authorities, dealing with other financial issues and will work with CGV in taking you through the application process and dealing with legal issues. ITA will also provide details of the costs involved.
And don’t worry; it’s not as bad as it seems in terms of taxes & VAT!
A final word on tax issues, I am a specialist on this subject. Registering with the Cyprus Tax Authorities is mandatory, their position is that as rental income arises from immovable property in Cyprus they have taxing rights.
There is no legal argument against this but the starting point for paying income tax in Cyprus is when profits exceed €19,500 pa and the VAT threshold starts at €15,600 turnover. Should your rental income exceed these figures and you pay Cypriot tax it can be off set against UK tax liability under HMRC’s double taxation rules.
I make this point only to demonstrate registering with the Cyprus Tax Authorities is not a big issue and should not stand in the way of registering your property.
Lyn Clifford Hill
Chair Marina Hilltop Owners Association