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Owners of real estate leased in Cyprus will be obliged to pay taxes

Owners of real estate leased in Cyprus will be obliged to pay taxes

11.04.2018
Tags: Cyprus, Taxes, Real Estate, Rent, Laws

According to the Cyprus Tax Service, on the Airbnb site and other similar platforms, about 5,5 thousand accommodation facilities located in Cyprus are offered. This was in an interview with InBusinessNews, Deputy Tax Commissioner Sotiris Makridis said. The owners of most of these facilities have already been established, and they have been notified of the need to declare income from the leasing of their property for tax purposes.

Since Cyprus does not yet have legislation regulating this sphere, according to Makridis, in the near future, either a new law will be prepared or amendments to already existing acts will be made. In particular, for each specific object it is planned to create a special register, through which it will be possible to track the revenues received from the delivery of this facility.

The normative base for taxation of this type will be the corresponding law adopted recently in Greece. According to him, rental income for a total of up to 12 thousand euros is taxed at the rate of 15%, from 12 to 35 thousand - at a rate of 35%, and over 35 thousand - at a rate of 45%. However, Makridis noted that the rates will be adjusted, since in the conditions of the Cypriot market they are overstated.

At the same time, the Cyprus Tourism Organization (CIT) is considering the possibility of introducing a separate category for short-term rental of real estate. This was discussed at the meeting of the organization in early April. It is obvious that the objects handed over to tourists directly through the Internet platforms can not be considered de jure "tourist" from the point of view of safety and sanitary conditions. Basically, due to the fact that the owners of the foreclosed real estate do not declare their guests as "tourists".

However, the situation in the near future may change with the adoption of the bill "On the regulation of hotels and tourist accommodation places" 2017 year, which is now discussed in Parliament. The document provides for simplification of the procedure for registering such housing and obtaining the licenses necessary to conduct such activities. One of the ways out may be the creation of a special regulatory category for such objects.

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