Short-Term Rental Licensing in Cyprus

A Step-by-Step Guide for Airbnb Hosts (2025 Update)

Introduction

If you’re investing in property in Cyprus with the intention of using it as a holiday let — whether via Airbnb, Booking.com or direct bookings — understanding and complying with the licensing, safety, tax and operational requirements is essential. In 2025, the regulatory landscape for short-term rentals (STRs) in Cyprus has become more strictly enforced, and investors who ignore this risk potentially severe penalties — as well as lost income and reputational damage.

This guide provides a clear, step-by-step roadmap to compliance, as well as practical advice on pricing, management, and structuring your business — especially valuable for buy-to-let investors stepping into the holiday-let market. We also explain how working with a specialist like Investments.cy can make the process faster, more reliable, and more profitable.

Why License Matters: Legal and Commercial Risks

Before diving into how to register, it is important to understand why this matters.

Legal Requirement
Under Cyprus law — specifically the “Regulation of the Establishment and Operation of Hotels and Tourist Accommodations” — short-term self-catering accommodation must be registered with the Deputy Ministry of Tourism. (Cyprus Property News) Operating without a valid registration license is illegal. (Cyprus Property News)
Penalties Are Real and Severe
As of 2025, property owners who let without registration may face fines up to €5,000, or even up to one year’s imprisonment, or both. (Sigmalive English) If the breach continues after a conviction, an additional fine of €200 per day can apply. (Cyprus Property News) Authorities are increasing checks during the tourist season. (Dom)
Reputational Risk and Platform Compliance
Once registered, you receive a unique registration number which must be displayed on all advertisements, listings, and bookings. (Cyprus Property News) Platforms increasingly enforce this, and failure to display may risk listing removals or penalties.
Tax Risk
If you operate illegally, tax authorities may treat your earnings as undeclared or non-compliant. Proper registration helps you stay on the right side of tax law and makes your business more transparent.
Competition & Fairness
The crackdown seems partly driven by pressure from the hotel industry, which argues that unlicensed holiday lets undercut them unfairly. (Sigmalive English) Regularising the market helps level the playing field.

Step-by-Step Registration Process

Here is a practical, detailed guide to registering your Airbnb or short-term rental property in Cyprus in 2025.

Step 1: Confirm Your Property Qualifies

Your property must be a self-catering accommodation unit. This typically means a single villa, a single residence, or a whole apartment. (Cyprus Property News)
Shared rooms or sublets (where rooms are rented separately) may not qualify under the same scheme — check with a local lawyer or with the Deputy Ministry.
You must own, or have legal right to use, the property for short-term letting.

Step 2: Register for Tax Purposes

Before or during the registration process, make sure you are registered with the Cyprus Tax Department (i.e., have a Tax Identification Number). (lawcyprus.org)
Decide whether VAT registration is necessary (discussed further below).

Step 3: Prepare Required Documentation

For the registration application to the Deputy Ministry of Tourism, you will generally need:

Proof of identity (passport or ID)
Title deed or equivalent proof of legal use / ownership
Building permit or town-planning documentation (to show the property is properly authorised) (Cyprus Property News)
Insurance: typically liability insurance covering fire, natural disasters, public liability. (Premier Property Management Ltd –)
Property details: address, number of bedrooms, maximum guest capacity, floor plans. (lawcyprus.org)
Safety documentation: demonstration that safety measures are in place (see below).

Step 4: Submit Your Application Online

The application is submitted via the Deputy Ministry of Tourism’s portal. (Sigmalive English)
Fill in the required forms and upload all documentation in PDF format. (Dom)
Pay the registration fee: as of the current regime, this is €222 per unit (valid for three years). (Dom)
Once approved, you’ll receive a registration number (sometimes also called “special operating label”) which is valid for a fixed period.

Step 5: Display Your Registration Number

After registration, you must display your registration number in all advertisements, listings, and booking-related communications. (Cyprus Property News)
This is not optional: failure to display the number is itself a breach.

Step 6: Safety & Guest Information Requirements

Equip the property with basic safety tools: fire extinguisher, fire blanket, first-aid kit. Many self-catering accommodation owners ensure smoke detectors in key areas. (Premier Property Management Ltd –)
Provide a guest information pack with emergency exit instructions, local emergency phone numbers, the property’s full address, and usage instructions for appliances.
Consider obtaining a certificate or proof that electrical installation is safe; while not always explicitly required, it’s a strong best practice.
Be prepared for possible inspections by the Deputy Ministry; under the law, inspections may be carried out to verify compliance. (Cyprus Property News)

Step 7: Renew Your Licence

Your registration licence is not indefinite. The original licence is valid for three years. (Cyprus Property News)
As of more recent rules, renewal must be applied for within three months before the expiry. (Dom)
The renewal fee remains €222, but the renewed licence is valid for five years, under the current regime. (Dom)
If you miss the renewal window, you may have to re-apply fully, including submitting all documentation again. (Dom)

Taxation: What You Need to Know

Complying with tax obligations is just as important as licensing. Here’s a breakdown of how short-term rental income is treated in Cyprus and what hosts need to plan for.

Income Tax

Income from short-term rentals is taxable under ordinary income tax, not as a special regime, if you meet certain criteria.
According to Airbnb’s tax guide, if your gross income exceeds €19,500, you must file a Cyprus income tax return.
Filing is done through the Cyprus tax portal (e.g., TaxisNet or its successor) under the standard timeline.

VAT (Value Added Tax)

VAT obligations may apply if you provide short-term rental services and meet certain thresholds. (Airbnb Assets)
Specifically, if your annual short-term rental income exceeds €15,600, you are generally required to register for VAT and charge a 9% VAT on the accommodation. (Airbnb Assets)
Note: even if you fall below that threshold, VAT registration may still be required depending on the nature of your business, so it is wise to consult a tax adviser. (Airbnb Assets)

Special Defence Contribution (SDC)

According to guidance from the Cyprus Fiduciary Association, in some cases where you meet the following conditions, SDC does not apply:
1. The property is registered in the self-catering accommodation register. (cyfa.org.cy)
2. You are VAT-registered, or required to be, and you apply the 9% VAT on your short-term rental income. (cyfa.org.cy)
3. The letting is genuinely short-term, recurring, typically to different guests each time. (cyfa.org.cy)
If these conditions are met, the income will be treated as business income, subject to income tax, but exempt from SDC.

Record-Keeping

Maintain detailed records of bookings, receipts, invoices for expenses (cleaning, maintenance, management, utilities).
Keep guest data (e.g., name, ID) as required for compliance and tax inspection.
Use accounting or property-management software to streamline reporting and ensure you are capturing all deductible costs.

Pricing, Seasonality & Yield Strategy

Running a holiday let successfully is not just about acquiring a licence and paying tax — you need to think commercially. Here’s how to approach pricing, occupancy and yield.

Seasonality in Cyprus

Cyprus is a strong seasonal market. High tourist demand typically runs from May to October, with a peak in July and August.
In coastal and resort regions (Paphos, Limassol, Larnaca), occupancy can soar in summer; but in off-season months, demand drops, especially for holiday lets.
Urban destinations (Nicosia, Limassol city centre) may have a more stable year-round demand, particularly from business travellers, digital nomads, or long-weekend visitors.

Pricing Strategy

Use a dynamic pricing model: adjust nightly rates based on occupancy forecasts, demand, local events, and season.
Consider a minimum stay policy during peak summer (e.g., 4–7 nights) to reduce turnover and simplify cleaning logistics.
For low-season, offer discounts or weekly rates to improve occupancy.
Factor in extra costs: cleaning, utility consumption, linen, repairs, management fees, platform commissions. These significantly eat into net yield.

Yield Expectations

Gross yield: multiply expected average daily rate by projected occupancy days.
Net yield: subtract all expenses — platform fees, management, cleaning, maintenance, utilities, insurance, marketing.
Compare your holiday-let yield to long-term letting: STR yields are often higher per night but may have much lower occupancy on average.
If using Investments.cy, you can ask for cash-flow modelling: they can produce tailored yield scenarios and stress-test different rate and occupancy assumptions.

Management & Operations Best Practices

For a professional, guest-friendly, and compliant short-term rental enterprise, management is key. Here’s how to do it well.

Outsourcing vs Self-Management

If you do not live in Cyprus or near your property, professional local management is almost essential. A good manager handles: check-ins, cleaning, maintenance, guest communications, emergencies.
Even if you self-manage, maintain a local network of trusted service providers: cleaners, electricians, plumbers, locksmiths.
Working with a specialist partner like Investments.cy gives you access to vetted management companies and contacts.

Guest Screening & Deposit Policies

Use platform tools to screen guests (reviews, identity verification).
Ask for a security deposit or card hold to protect against damage.
Be transparent in your house rules to manage guest expectations (noise, check-in times, maximum occupancy, cleaning).

Insurance

Get a dedicated holiday-let (short-term rental) insurance policy — standard homeowner policies may not cover regular guest stays.
Ensure insurance covers: public liability, damage, business interruption, and guest injury.
Keep certificates or documentation readily available for tourists and inspections.

Maintenance and Safety Checks

Schedule regular maintenance: plumbing, electrical, appliances, smoke alarms.
Carry out periodic deep cleaning, especially after peak season.
Maintain safety equipment (fire extinguishers, first-aid, smoke detectors) and check expiration/use.
Keep a guest manual that includes safety guidelines and emergency procedures.

Bookings & Communications

Respond promptly to guest enquiries — swift communication improves reviews and occupancy.
Provide a comprehensive guest welcome pack with local recommendations, transport options, emergency contacts and house rules.
Use automated messaging for check-in/check-out instructions, payment reminders, deposit returns, cleaning scheduling.

Why Use Investments.cy as Your Partner

Investing in holiday lets in Cyprus can be lucrative but, if done without local expertise, it can be risky. Here is how Investments.cy adds disproportionate value:

Acquisition Support
- We source suitable properties (apartments, villas, entire developments) that are well suited for short-term lets.
- We run due diligence (title, planning, zoning) to ensure the property is legally compliant for short-stay use.
Licensing & Registration Assistance
- We guide you through the application for the Deputy Ministry licence, help prepare documentation, and liaise with authorities.
- We ensure you correctly display and use your registration number in all listings and promotional materials.
Tax Structuring & Advice
- We put you in touch with Cyprus-based accountants and tax advisers with STR experience.
- Together, we can model your tax scenarios: income tax, VAT obligations, accounting structure (individual vs company), and whether SDC applies.
Management Network
- We provide access to trusted, vetted property managers, cleaners, maintenance teams and insurers in Cyprus.
- These partners manage daily operations, give you peace of mind, and help protect your reputation.
Financial Modelling & Exit Planning
- We run robust cash-flow models, stress test your investment, and show return scenarios under different occupancy and pricing cases.
- If you ever wish to exit, we can advise on resale strategy, tax implications, and exit mechanics.
Compliance & Risk Mitigation
- We help you stay ahead of regulatory changes (renewals, inspections).
- We support the correct setup from day one, avoiding fines, legal risk, or delisting from booking platforms.

Common Pitfalls & How to Avoid Them

Let’s be honest: many property investors underestimate the complexity of running short-term rentals. Here are some common mistakes — and how to steer clear of them.

Failing to Register
- Some owners think “I’ll do it later” — but enforcement is now real, and advice from the Deputy Ministry is clear. (Sigmalive English)
- Avoid this by initiating the registration process before listing.
Missing the Renewal Deadline
- Licences must be renewed; if you miss the renewal window, you may need to re-apply entirely. (Dom)
- Track your licence expiry carefully, ideally with reminders 3–4 months in advance.
Underinsuring
- Relying on home-insurance policies is risky; they often exclude short-term letting.
- Obtain a dedicated insurance policy suited for high-turnover holiday lets.
Over-optimistic Income Forecasts
- Many hosts assume 100% occupancy or high nightly rates year-round.
- Use realistic, data-driven models. Factor in low season, cleaning costs, vacancies, and maintenance.
Ignoring VAT Obligations
- Some hosts fall below the VAT threshold but misinterpret obligations; others avoid registration entirely.
- Consult a tax expert and ensure proper VAT planning is part of your strategy.
Poor Guest Experience
- Neglected safety, inconsistent cleaning, or poor communication leads to bad reviews and fewer bookings.
- Invest in good management and operational processes from the start.
Non-Compliance with Local Laws
- Regulations can change; some municipalities may introduce local by-laws or fees.
- Keep informed (or rely on a local partner like Investments.cy) to ensure ongoing compliance.

Practical Checklist: Before You Launch

Here’s a checklist you can use before you list your property on Airbnb or similar platforms.

Confirm your property qualifies as “self-catering accommodation”.
Register with the Cyprus Tax Department (get TIN).
Decide whether you need VAT registration.
Prepare documentation: title deed, building permit, ID, insurance.
Apply for the registration licence via the Deputy Ministry’s portal.
Pay the €222 registration fee.
Receive and note your registration number.
Install safety equipment (fire, first-aid, guest info pack).
Arrange guest welcome materials (house rules, emergency instructions).
Get short-term rental insurance.
Decide on your management strategy (self, full-service, local partner).
Set up bookkeeping and guest-management software or spreadsheets.
Define your pricing strategy (dynamic, seasonally adjusted).
Organise your team: cleaner, maintenance, local support.
Apply to renew licence well before expiry.

Frequently Asked Questions (FAQs)

Here are some common questions that buy-to-let and holiday-let investors ask, along with straightforward answers.

What are the projected annual property price growth rates for Cyprus in 2026?

While no one can guarantee future property prices, many analysts in 2025 expect moderate, continued growth across Cyprus’s property markets, though not at the breakneck pace seen in earlier years. Growth forecasts often range in the low-to-mid single digits, depending on location, property type, and the strength of domestic and foreign demand. Tourist-driven areas (coastal zones, marinas) may benefit more strongly, but as markets mature, investors should be realistic and model for moderate appreciation rather than speculative booms.

Which cities in Cyprus are expected to outperform others in the next 1–2 years?

Limassol: tends to attract premium buyers, foreign investors, and holiday-let guests; ideal for high-end villas or sea-view apartments.
Paphos: a strong tourist destination with good potential for holiday rentals.
Larnaca: more affordable compared to Limassol and offers good rental yields; has growing tourism appeal.
Nicosia: though not a “holiday beach destination,” its central location, business travellers and long-term demand make it interesting for city stays or hybrid short/long lets.

Which city is “best” for you depends on your strategy (pure holiday let vs hybrid vs capital-growth play) and your tolerance for management complexity.

Is the market cooling or going into a correction?

As of 2025, signals suggest a moderating market rather than a sharp correction. Price growth has slowed compared to the rapid increases in prior years, likely influenced by rising interest rates and more cautious sentiment. However, demand remains broadly resilient, especially in quality locations. The key risk to watch is oversupply or regulatory changes, but for now, the market appears to be entering a more sustainable phase.

What types of properties (apartments, villas, land, full developments) present the best upside going forward?

Luxury villas and sea-view apartments: offer strong holiday-let appeal and command premium rates.
Central or city apartments: particularly in Limassol or Nicosia, may strike a balance between capital growth and rental income.
Development plots / whole developments: high potential upside but also higher risk; suited for experienced investors or co-investors.
Renovation projects: older properties in prime or tourist zones, when renovated to modern standards, can deliver outsized returns.

The “best” type depends on your exit horizon, risk appetite, and whether you plan to operate short-term or long-term.

When is the right time in the cycle to buy (or to hold off)?

There is no perfect timing for every investor. But you might consider buying when:

Financing rates and terms are favourable.
You find a property with the right mix of price, location, and yield potential.
You have clarity on regulatory and tax compliance.
You can model cash flows conservatively, including off-season occupancy.

You might hold off if:

Prices are very heated and projected growth seems unsupported by fundamentals.
Your financing is costly or uncertain.
Regulatory risk feels too high (e.g., if you are unsure about renewal, inspections or evolving tax rules).

Working with Investments.cy helps: we build realistic models, run scenario stress-tests, and support you through compliance — helping you enter (or stay out) with confidence.

Conclusion

In 2025, short-term rental licensing in Cyprus is no longer a “nice-to-have” — it’s a legal must. Trusted, compliant, well-managed Airbnb-style listings are becoming the norm. If you are serious about building a holiday-let business or buy-to-let portfolio on the island, navigating the registration, safety, tax and operational demands will be crucial to your success.

By following the step-by-step process outlined above, investing in safety and guest experience, and using a specialist partner like Investments.cy, you can not only protect yourself from risk but also unlock significantly higher returns. With the right preparation, Cyprus STRs offer a compelling blend of capital appreciation, rental yield, and lifestyle potential.

If you’d like help modelling your projected cash flows, structuring your operation, or simply identifying the right property to enter the holiday-let market, do get in touch — we’re here to guide you every step of the way.