Restrictions on Renting Out Your Home in Cyprus

A lot of people buy property so that they can make money by renting it out. There are also a lot of people that have a second home or a vacation home that they rent out for extra cash when they are not using it. With that in mind, it is not surprising that a large number of expatriates that own homes in Cyprus are interested in renting them out when they are not in use. Unfortunately that can be against the law. The law in Cyprus states that non resident foreigners are not allowed to rent out property on a short term basis such as for holiday rentals. However, it is perfectly legal to rent out your home in Cyprus on a long term basis to residents of Cyprus.

If you have purchased property in Cyprus as a non resident foreigner then you had to first obtain permission to purchase property from the Council of Ministers. When the Council of Ministers grants permission to non resident foreigners to purchase property in Cyprus it is under the condition that the property will not be used for commercial purposes and will be rented out only on a long term basis to Cypriot residents.

While there are a number of foreign property owners renting out their homes illegally, there are some ways that you can rent out your property legally. Renting out your property on a short term basis is illegal unless you have applied to the Cyprus Tourism Organization, or CTO, for certification of your property as a holiday rental. You can only get this certification if you have a detached property. Be warned that the certification process is long and complicated. You may be able to find an estate agent or developer that can provide assistance with the certification process, but you should always get legal advice before doing something like this.

Once you apply for certification the CTO will come out to inspect your property. If certified the CTO will charge you three percent of the expected income from your property on an annual basis. The disadvantage of this is that you are liable for that charge even if you do not make the estimated income. Remember that you will also need to notify your insurance company.

If the property that you are interested in renting out is part of a community development you may have more obstacles. You will need to see if there are any rules or restrictions in the community that prevent you from being able to rent out the place.

If you are renting out property in Cyprus you are required to pay taxes on your rental income. This applies even if the income is received in another country.