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Regulation of short-term rentals

Commission acts to promote transparency in the short-term rental sector to the benefit of all players

The Commission adopted a proposal for a Regulation to enhance transparency in the field of short-term accommodation rentals and assist public authorities ensure their balanced development as part of a sustainable tourism sector.

While short-term accommodation bookings offer benefits for hosts and tourists, they can create concerns for certain local communities struggling, for instance, with a lack of affordable housing. The new rules will improve the collection and sharing of data from hosts and online platforms. This will, in turn, inform effective and proportionate local policies to address the challenges and opportunities related to the short-term rental sector.

The new proposed rules will assist to improve transparency on the identification and activity of short-term accommodation hosts, and on the rules they have to comply with, and will facilitate the registration of hosts. They will also tackle the current fragmentation in how online platforms share data and, ultimately, help prevent illegal listings. Overall, this will contribute to a more sustainable tourism ecosystem and support its digital transition.

Promoting them through well-known, successful platforms allows interested parties to choose accommodation in a quick and easy way, safely. Guest comments about their experience during their stay is a kind of evaluation that assists with selection.

The EU’s tourism sector has seen dramatic growth in the use of online travel platforms in recent years, now estimated to account for a quarter of all accommodation bookings.

The short-term rental regulation will build on the Digital Services Act (DSA), a recently-adopted horizontal legislation that introduced rules and responsibilities for all the economic operators in the digital domain.

The enforcement of the regulation would be in hands of the same authorities in charge of the DSA, the Digital Services Coordinators.

Airbnb and other platforms providing short-term accommodation in Cyprus have become very popular recently, allowing more people to commercially exploit their properties and driving upwards renovations and related services. Short-term rentals provide a unique and cost-effective experience for guests as houses and flats in Cyprus have their own style and design.

The demand for short-term rentals is increasing year by year and the state has deemed it necessary to regulate their establishment and operation, through the Deputy Ministry of Tourism, in order to control the industry, collect taxes and protect the public.

Legislation-Procedure/Requirements

In light of this, the House of Representatives of the Republic of Cyprus recently passed a new amending Law regulating short-term touristic and self-catering accommodation. The governing law is the Regulation of the Establishment and Operation of Hotels and Touristic Accommodation (Amending) Law 2020 (9(I)/2020).

The aim was to upgrade the quality these services offer, increase public revenue and incentivise the number of short-term rentals and tourism in remote locations such as agro touristic locations. The regulation intends to lay out a common approach to registration procedures, upon which a single and unique registration number would be granted to hosts and accommodations to ensure greater transparency and traceability.

The government has given enough time to providers to register their properties in a register created for this purpose, rendering such registration mandatory by law. The grace period for registration ends on February 6, 2023.

Someone seeking to rent property short term, with the authorisation of the property owner if it’s not them, is obliged to submit an application to the Deputy Ministry of Tourism along with a declaration, as well as paying the registration fee. The declaration serves the purpose of confirming registration with the tax department and the provision of the tax and/or VAT identification number, the relevant details of the accommodation and its minimum technical and operational specifications, as well as an insurance policy covering against all risks, fire and public liability.

Notably, the member states are not to obtain data from the platform if they have not set up a registration scheme for hosts. Existing schemes could be continued and additional information could be asked, at the condition that it is proportionate and necessary.

Upon registration, the deputy ministry issues the special mark and registration number. The first registration permit is valid for three years from the date of its issuance. The permit is renewable every three years within three months prior to its expiry.

The registration would occur via a central website, which would provide a unique registration number. This unique identifier is necessary because the accuracy of rental data is currently challenged by multi-listing, the fact that the same apartment is often made available on several platforms at the same time.

The hosts would be required to provide information regularly, including the address of the listed accommodation, the type and size of the unit, as well as hosts’ names, contact details and business registration number, should a host be a company.

Authorities could verify information provided at any time and require updated information from hosts if deemed necessary. When hosts fail to update their information, national authorities could suspend their registration number and ask online platforms to delist associated units.

The deputy ministry is authorised to use information pertaining to the accommodation either for statistical purposes or for promoting the country’s tourism infrastructure.

Any suspension or delisting must be motivated by competent authorities, while the hosts would have the right to appeal the decision.

Online platforms will also be required under the new legislation to ensure that a valid registration number is there before a unit can go live and be open for rental. The website interface should be tweaked to make the registration number clearly visible.

Online platforms are also expected to “make reasonable efforts to randomly check the declaration” of their hosts, following a similar approach as per the DSA.

It may also carry out an ex-officio inspection at any time for the purpose of verifying the permit and compliance with registration conditions.

The permit may be revoked if secured on the basis of false or misleading information, or in the event the establishment ceased to be in business, or necessary registration licence details have not been renewed.

Furthermore, the permit may be revoked if the operator is convicted of serious offences relating to safety and health at work or offences relating to drugs, domestic violence, trafficking and exploitation of persons or other serious criminal offences specified in the law, or if an injunction was issued for the cessation of the accommodation’s operation or the accommodation is found to be in continuous violation of the law.

The cost for registration of a short-term rental property in Cyprus will vary. It will be calculated accordingly, taking into consideration the expenses of the examination of an application.

 

The new proposed framework will:

  • Harmonise registration requirements for hosts and their short-term rental properties when introduced by national authorities
  • Clarify rules to ensure registration numbers are displayed and checked
  • Streamline data sharing between online platforms and public authorities
  • Allow the reuse of data, in aggregate form
  • Establish an effective framework of implementation

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