Cyprus is quickly becoming a hotspot for short-term rental investments, with a booming tourism industry, attractive returns, and evolving regulations that are shaping a more structured and transparent market. Whether you’re a seasoned investor or exploring new income streams, short-term rentals in Cyprus present a promising opportunity—if navigated wisely.
📊 Market Momentum: Short-Term Rentals on the Rise
The short-term rental market in Cyprus has seen impressive growth. According to recent data from the Deputy Ministry of Tourism, the number of registered short-term rental properties skyrocketed from 4,765 in 2023 to over 8,200 in 2025. This dramatic rise reflects strong demand, particularly in tourist-favored regions such as Limassol, Paphos, and Larnaca.
What’s driving this growth?
- Year-round tourism: Cyprus attracts over 4 million tourists annually, with both peak season and off-season visits steadily increasing.
- Changing traveler preferences: Tourists now seek authentic, home-like accommodations, fueling demand for short-term rentals over traditional hotels.
- Remote work culture: More digital nomads are choosing Cyprus as a base, creating year-round rental demand in urban and coastal areas.
💰 Returns That Speak for Themselves
Short-term rentals in Cyprus offer compelling investment returns. Recent market reports show:
- Average rental yields of 5.42%, with Limassol peaking at over 7%
- Capital appreciation prospects of up to 30% in select areas due to infrastructure development and increasing foreign investment
Investors in popular cities like Limassol, with its ongoing luxury developments, and Paphos, known for its affordability and tourist appeal, are already seeing steady income and value growth.
📌 Regulatory Updates: What You Need to Know
While the market holds immense potential, the regulatory framework has become more stringent—a move aimed at protecting both investors and consumers, and ensuring fair competition.
Key Regulations for Short-Term Rentals in Cyprus:
- ✅ Mandatory Registration: All short-term rental units must be registered with the Deputy Ministry of Tourism. Unregistered operations may face fines up to €5,000 or even imprisonment.
- ✅ Tax Obligations: Rental income is taxable under Cyprus income tax laws. A progressive tax rate applies (0%–35%), and landlords must file income reports monthly.
- ✅ Bank Payment Requirement: As of January 1, 2025, all rent payments must go through Cypriot bank accounts to enhance financial transparency.
- ✅ Public Listing Requirements: Your registration number must be visible on all listings (Airbnb, Booking.com, etc.).
💡 Tip: Consider working with local property managers or legal advisors to streamline registration, ensure compliance, and handle tax obligations efficiently.
📍 Best Areas to Invest in Short-Term Rentals
Here are some of the top-performing regions:
- Limassol: High-end rentals, business travelers, luxury tourism, top ROI.
- Paphos: Cultural hotspot, family travelers, retirees, high demand in the old town and Kato Paphos.
- Larnaca: More affordable entry point, growing airport traffic, strong tourist appeal.
- Ayia Napa & Protaras: Perfect for seasonal short lets targeting summer beachgoers.
🧠 Final Thoughts: Is It Worth the Investment?
If you’re looking to diversify your portfolio or generate passive income, short-term rentals in Cyprus offer a balanced mix of yield and growth potential—but success depends on careful planning and full legal compliance.
✔ Key Takeaways:
- The market is growing, and so are the returns.
- Legal compliance is not optional—registration and tax reporting are mandatory.
- Choosing the right location is key to maximizing occupancy and income.
🎯 Ready to invest in Cyprus short-term rentals? Explore listings, market trends, and tailored investment advice at CyprusHomes.Online.