Buying a property for a short-term rental as a non-resident EU citizen

The permission application you sign declares

that your intention to buy is based on you living in it as your primary residence .

We bought our property 2021 as British nationals so making us non EU national s and that's what we were told by our lawyer and the declaration was quite clear

However having said that it is also pretty much clear nobody here cares about the law and thousands of non EU owners are not resident and rent their properties out..

Am not even that sure the CTO licensing authority for short term lettings care too much either.... Ditto for tax registration

Am not condoning breaking the law of the country that your are a guest in... but it is todays creality

If I were you before buying be sure you are at least aware of the following complex living issues as communal living can be problematic

Are all owners paying their Communal charges

How many are in major debt as a result of non payment

Have you seen or have you asked the vendor to see an up-to-date set of accounts as this is often a good indicator of how well run and managed  the complex is

Is the communal pool licensed for use

Does the property have deeds and if not what are the issues in terms of buying on the basis of contract of sale agreement ownership.

Thank you for your response, @Toon.

So if I understand correctly, the permission application requires you to declare that you're buying the property as your primary residence, but that is with the Council of Ministers, and the Deputy Ministry of Tourism doesn't condition issuing the short-term rental license on that declaration? That's good to know, thank you.

However, the question is also whether myself, as an EU national, need to file the permission application in the first place, or is that mandatory only for non-EU nationals?

And thank you very much for the tips. As you probably can see, I'm at the beginning of the journey, getting to know the legislation regarding the legitimacy, tax rules etc. first in order to decide on whether to buy the property in Cyprus or elsewhere, but if I decide to go for Cyprus, these will definitely be invaluable.

Permission for EU nationals is not normally a requirement .... Which speeds the buying process up significantly

Note it can take several months to get the CTO short term lets licence and you must be registered for tax first as that is part of.the application as is bringing the property up to standard as is required by CTO.

You would not be allowed to advertise the property without displaying the licence number.although there is way to get round that by placing the property with a management company...

One further thing EU nationals can buy as many properties as they wish ...non EU nationals can by one each max ...ie a non EU couple can buy two properties one in each name OR take half shares each in two properties...there is a way round that too by creating a limited company and naming yourselves as directors but please take professional advice on that

Noted, thank you. I know that there are 2 options, buying the property as an individual and as a legal entity (i.e. company) but I'd expect the latter to be much more complex in terms of accounting, something I'd need to discuss with an advisor indeed. For now, though, I'd only consider buying it as an individual. 

I would plan to ask the management company to advertise and manage the property as I'd plan to live abroad (at least for now), but regardless of that, I wouldn't probably decide to buy the property if I'd know that obtaining the short-term rental license for it would be problematic for any reason now or possibly in the future (I'd buy the property elsewhere in such case, i.e. not in Cyprus). It's a long-term investment and I would like to reduce any risk of it becoming problematic at any point in the next decade.

So the two most important questions that I have are:

1. Do I need to apply for permission to buy a property, which would make me declare that I'm buying it for the sole purpose of living in it? And if not, is there anything else that would make me ineligible for obtaining the license to rent the property short-term?
2. What are the taxes associated with the rental income for me as a tax non-resident - is it a standard personal income tax rate (0-30%) + VAT (exempt for the income lower than 15,600 p/a)?

I understand that you might not be able to answer these questions as these aren't necessarily applicable to you as an UK expat living in Cyprus, nevertheless I appreciate all your help. If there's any advisor whom you'd recommend me to speak to with regards to the above questions, I would also be grateful. Also, it would be great to meet you for a coffee next time I'm in Paphos.

There is an option to buy in joint names with a 50% discount on title deed transfer fees

Try this link and maybe contact them.....

https://www.pwc.com.cy/en/publications- … gures.html

Short term managed lettings shouldn't be a problem as an EU national as the property management entity would be taking care of any issues that may occur and likely take care of the most common ones without bothering you .if it was more complicated they would be communicating with you anyway. They would be managing access to keys cleaning laundry changeovers some even meet greet and leave.. etc the really good ones are usually on hand to deal with equipment failures too to ensure your clients are kept happy.. all at a cost though...

Choose your property wisely and as always its location location location everytime

CTO licencing requirements are detailed elsewhere in the blog.. just use the search function.

The licences is renewable every 3yrs and id expect the CTO  to demand a declaration that the property still complies with requirements and they are at liberty to check it at anytime 

Thank you once more. I found this thread where you've shared a lot of useful information regarding the license and the taxation rules:

https://www.expat.com/forum/viewtopic.php?id=1014525

With that, I think I know enough basics, the next step would be for me to contact a property mgmt company for a cost assessment and some clarifications, find a legal advisor and come to Cyprus to look at some properties and potentially do the tax registration as well.

Good luck