Short-Term Airbnb versus Long-Term Rentals in Cyprus

Detailed guide on short-term rentals (Airbnb) versus long-term leasing in Cyprus. Profitability, regulations, tax implications, and case studies. Landlords in Cyprus face a key decision when entering the rental market: whether to pursue short-term rentals, such as Airbnb and Booking.com listings, or traditional long-term leasing agreements. Each option offers distinct benefits, risks, and legal obligations.

Cyprus Short-Term Rentals (Airbnb and Tourist Lets)

• High profitability during peak tourist seasons.
• Popular in coastal cities such as Paphos, Limassol, and Larnaca.
• Requires active management: marketing, cleaning, and guest turnover.
• Legal requirement: Register with the Deputy Ministry of Tourism and obtain a license.
• Subject to VAT and potential income tax obligations.

Cyprus Long-Term Rentals (Traditional Leasing)

• Provides stable and predictable income.
• Popular in Nicosia (students, professionals) and suburban areas.
• Minimal management once tenants are secured.
• Governed by the Rent Control Law and Civil Code.
• Lower yields compared to short-term rentals, but fewer risks of vacancy.

Profitability Comparison

• Short-Term: Higher yields (7%–12% annually) but seasonal and volatile.
• Long-Term: Yields around 3%–6%, with consistent occupancy.
• Short-term rentals may cover annual costs in peak summer alone.
• Long-term rentals provide security during economic downturns or off-season.

Legal Framework

• Short-term rentals require licensing under the Deputy Ministry of Tourism.
• Properties must meet safety, insurance, and quality standards.
• Long-term rentals are simpler legally, requiring only a contract under the Civil Code.
• Tenants under long-term contracts gain stronger protections.

Case Study: Airbnb Villa in Paphos

A British investor rents a 3-bedroom villa via Airbnb. During July–August, weekly income reaches €1,500. Annual rental income exceeds €25,000, though high turnover and management costs apply.

Case Study: Long-Term Flat in Nicosia

A Cypriot landlord rents a 2-bedroom apartment to university students. The flat generates €800 per month, with consistent demand year-round. Annual rental income is €9,600, with minimal management required.

Checklist for Landlords Choosing Rental Strategy

1. Identify property location and target tenants.
2. Assess profitability potential: short-term vs. long-term.
3. Consider management capacity (self-managed vs. agency).
4. Review legal licensing requirements.
5. Budget for taxes, insurance, and maintenance.

FAQs on Short-Term vs. Long-Term Rentals

Q: Are short-term rentals legal in Cyprus?
A: Yes, but they require registration with the Deputy Ministry of Tourism.

Q: Which is more profitable, Airbnb or long-term leases?
A: Airbnb typically generates higher yields but involves higher risks and management.

Q: Can foreigners rent their Cyprus properties on Airbnb?
A: Yes, as long as they register and comply with tourism laws.

Q: Do tenants under long-term leases have strong rights?
A: Yes, the Rent Control Law provides significant protections.

Q: What taxes apply to short-term rentals?
A: Income tax, VAT, and potentially municipal tourism levies.

Final Recommendations

Landlords in Cyprus should align their rental strategy with location, target market, and management capacity. Short-term rentals offer high rewards but require active oversight, while long-term rentals provide steady income with reduced risk.