Cyprus MPs are to vote on a legal framework regulating the licensing of short-term rentals through online Airbnb-type platforms, bringing an end to unlicensed accommodations being rented out to tourists.
The draft is expected to be approved at a House plenary sometime in December said EDEK MP Elias Myrianthous who tabled the proposal with ruling DISY MP and president Averof Neophytou.
The bill foresees the regulation of short term rentals through the creation of a register to be managed by the Deputy Ministry of Tourism.
Myrianthous told the Financial Mirror that this is expected to upgrade the island’s tourism product as it will regulate some 20,000 accommodation units which were operating without any supervision whatsoever.
“These accommodations will now have to comply with health and safety criteria, offering tourists a better experience and living conditions.”
He added that tourists are increasingly preferring to book their holidays online, from flights to accommodation.
“This development will open up non-traditional markets where tourists prefer to book their holidays online and opt for non-conventional accommodation units,” said Myrianthous.
He argued that regulating short-term rentals through online platforms will also prove beneficiary for Cyprus tourism, as travel agents will be able to come to agreements with the owners of such accommodation units and include them in their packages.
Myrianthous also said that the framework will give a push to agritourism.
“Owners of houses or cottages in the countryside or mountain areas will be encouraged to renovate and rent out their properties in areas which a hotelier would not find it profitable to build a hotel.”
Addressing hoteliers’ concerns over unfair competition, the EDEK MP said they should not be worried as Airbnb rentals will have to comply to health and safety criteria, while efforts are being made by the relevant authorities to regulate the taxation of such accommodation.
“In any case, all citizens are obliged to declare any income they have. If they fail to do so, they could be faced with fines of up to EUR 5,000.
The problem could lie with foreigners who have bought villas and who prefer to live abroad and rent their properties through these online platforms. No authority in any country could easily tax these cases.”
Meanwhile, the Deputy Minister of Tourism Savvas Perdios has expressed his satisfaction as the proposal for a law regulating and taxing Airbnb rentals is being finalized and will soon pass the House plenary.
The Ministry has had meetings with several online platforms, which have agreed that they would oblige users to post their registration number from the Ministry.
They also agreed, as he said, that in the future, information will be provided to assist the Tax Commissioner.
Perdios noted that these platforms do not intend to promote illegal renting and want to help with proper taxation.
However, they have said that there can be no taxation at the source as the Ministry had suggested, as the platforms cannot make specific modifications for each country with which they cooperate.
Meanwhile, Cyprus hoteliers are fuming over the final draft of the law, as they feel that it gives way to unfair competition crying foul play over the removal, as they say, of criteria regarding health and safety regulations, from the original draft.
They see the new version as encouraging unfair competition as Airbnb-type accommodation will not have the same type of regulatory oversight.
In an attempt to simplify the licensing procedures for inclusion in the register of the Ministry of Tourism, MPs have removed what hoteliers see as essential elements for fair competition while stripping the law from requirements for health and safety certificates.
The initial bill was submitted in May 2018 and had the backing of hoteliers who sought to see the regulation of unfair competition from short-term rentals.
