Date: 6th March 2025
A proposal from the Cyprus Ministry of Tourism to cap the number of short-term rental properties a single owner can register was dismissed by the Attorney General’s Office on Tuesday, March 4th.
 

This initiative was originally introduced to regulate the expanding short-term rental market, which has seen rapid growth through platforms like Airbnb. Tourism Minister Kostas Koumis had put forward the idea of restricting property registrations to two units per owner, whether an individual or a legal entity. His rationale was that large-scale property purchases, particularly by foreign investors, have led to an influx of short-term rental listings with inadequate service standards. This, he argued, places traditional hotels at a disadvantage, as they face high operational costs to comply with strict regulations.
 

The Minister outlined three main concerns regarding the short-term rental market:

(1) Lack of oversight – Unlike hotels, short-term rental properties are not required to meet strict licensing and hygiene standards.
(20 Impact on housing prices – The acquisition of properties for short-term rentals contributes to rising real estate costs, making housing less affordable for locals.
(3) Unfair competition – Many rental property owners are able to bypass tax and regulatory requirements, while hotels must adhere to extensive legal and financial obligations.

Under the current framework, investors can own up to 12 apartments and rent them out without facing significant restrictions. This flexibility makes short-term rentals a more attractive business model compared to traditional hotel operations, a situation that has caused frustration within the hospitality sector.
 

Despite the Attorney General’s rejection of the proposed cap, discussions on tightening regulations for the sector remain ongoing. The Parliamentary Trade Committee is set to review potential legislative changes to align Cyprus’ approach with new EU directives on short-term rentals. 
 

Future regulatory measures could introduce stricter registration requirements, increased taxation, and higher service standards to ensure a more balanced and fair rental market.