Cyprus is preparing a major reform of its short-term rental market that is expected to significantly change the current registration and compliance framework for tourist accommodation. The review was prompted by a tragedy in Limassol, where two people were killed following the collapse of a residential building. Several apartments in the unsafe property had been rented to tourists despite being officially registered with the Deputy Ministry of Tourism.
The subsequent investigation exposed a systemic weakness: the current registration process provides little assurance that a property is actually safe. To be included in the state register, owners are currently required to submit only a limited set of documents. As a result, the register effectively serves as a list of addresses rather than a reliable confirmation that the accommodation complies with structural, sanitary, and fire safety requirements.
The situation is further complicated by the scale of the unregulated market. An audit identified thousands of properties being offered to tourists without official registration, as well as cases involving forged or invalid licence numbers. The official register currently includes 8,478 short-term rental units, although the actual number of properties operating outside the regulated system is believed to be considerably higher.
The proposed reform is expected to change the fundamental approach to admitting properties to the short-term rental market. To obtain a licence, owners will need to demonstrate not only their legal right to the property but also its technical suitability for occupation. The required documentation is expected to include a building fitness certificate, fire service approval, inspections of sanitary and engineering systems, and valid insurance coverage.
On-site inspections will become another important component of the new framework. This represents a shift away from formal registration based solely on submitted documents toward physical verification of a property’s condition. The measure is intended to reduce the risk of unsafe buildings being used for tourist accommodation and to increase owners’ responsibility toward their guests.
Cyprus is also preparing to introduce the European digital registration number system for short-term rental properties. Publishing an advertisement without a valid registration number will no longer be permitted. The digital identifier will connect the property, its owner, and its licensing history within a unified system, making supervision more effective and reducing opportunities for the use of false information.
Major online platforms, including Airbnb and Booking, will also be incorporated into the new regulatory framework. They will be required to share booking data with public authorities, verify the validity of registration numbers, and remove listings that fail to comply with the applicable requirements. Responsibility for market transparency will therefore be shared among property owners, the government, and digital intermediaries.
For property owners, the new rules will mean additional costs and a more demanding licensing process. In the longer term, however, the reform could improve the overall quality of available accommodation and strengthen visitor confidence. Properties that meet the updated standards and can demonstrate verified technical safety may gain a competitive advantage as the unregulated segment of the market contracts.
For investors, the changes underline the need for more comprehensive due diligence when acquiring property intended for tourist rentals. Legal compliance, the technical condition of the building, insurance coverage, and licensing eligibility will directly affect not only whether the property can be operated legally, but also its liquidity and potential returns.
The reform reflects Cyprus’ transition toward a more mature model of short-term rental regulation. Stricter oversight may temporarily reduce the number of available listings, but it should also create a safer and more transparent market. For professional participants, this means operating within a clearer framework in which asset quality and regulatory compliance become central to long-term investment resilience.