Cyprus Hotel Association Pushes for Stricter Airbnb Regulations and Overnight Levy

The Cyprus Hotel Association (STEK) has intensified its appeal for a robust regulatory overhaul concerning Airbnb-style short-term rentals. The association is urging governmental action to introduce annual rental caps, an overnight tourist tax, and enhanced enforcement measures to address persistent regulatory gaps.

Persisting Issues with Unlicensed Short-Term Rentals

STEK highlights ongoing challenges with unlicensed holiday accommodations that continue operating without adequate oversight. Despite a registration system being in place, the association argues that it falls short in preventing illegal listings and ensuring effective collaboration among authorities. This regulatory shortfall undermines the housing market and disrupts fair competition in Cyprus’ hospitality sector.

Impact on Housing and Local Communities

The growth of unregulated short-term rentals is not only skewing the hospitality market but also putting strain on Cyprus’ residential housing availability. Permanent residents increasingly face challenges finding affordable homes, while local neighborhoods contend with disturbances and decreased quality of life. These concerns underscore the need for balanced policies that protect communities and maintain tourism appeal.

Comprehensive Reform Proposals

STEK welcomes the Deputy Ministry of Tourism’s intent to revise short-term rental laws, viewing it as a chance to close existing loopholes. The association’s key proposals include:

• Systematic and effective inspections to detect illegal operators.
• Stronger enforcement backed by significant fines and administrative actions.
• Mandatory display of registration numbers on all booking platforms to ensure transparency.
• Better cooperation between online platforms and authorities to swiftly remove non-compliant listings.
• Limiting the number of days properties may be rented as short-term accommodations annually.
• Empowering local municipalities to restrict or ban short-term rentals in zones with housing shortages or increased nuisance.
• Introducing an overnight levy for guests staying in short-term rental properties.
• Ensuring safety, health, and insurance standards are consistent across all rental providers.

Lessons from European Experience

STEK points to European counterparts where clear, well-enforced rules have helped strike a balance between thriving tourism, affordable housing, and community welfare. The association plans to contribute actively to public consultations, aiming to help establish a fair marketplace that supports sustainable tourism growth in Cyprus.

Audit Office Reveals Significant Licensing Gaps

According to the Audit Office report dated May 2026, 8,464 self-catering accommodations are officially licensed in Cyprus. However, spot checks on online platforms revealed many listings operating without proper registration or displaying inaccurate licensing details. Only 30% of sampled properties were verified as fully licensed, while half showed no registration number, and some had invalid or expired licenses.

The Deputy Ministry of Tourism recognises these shortcomings and anticipates addressing them through EU Regulation 2024/1028, which came into effect in May 2024 but fully applies from May 2026 onward.

Hotel Sector Compliance Also Lagging

The same Audit Office review identified serious compliance issues within Cyprus’ hotel industry. Only 23% of hotels possessed full operating licenses as of April 2026, with 22% under temporary permits and the majority (55%) operating without any valid license. This highlights the ineffective impact of recent temporary measures and the urgent need for stricter regulatory frameworks.

For property investors and prospective buyers navigating Cyprus’ real estate market, understanding these regulatory challenges is critical. Whether searching for affordable apartments or exploring cheap houses and villas for sale, being aware of licensing frameworks helps ensure confidence and legality in your investments.

As Cyprus continues to balance its booming tourism appeal with residents’ needs, these policy reforms and enforcement improvements could play a pivotal role in maintaining the island’s attractiveness and livability for years to come.