The booming short-term rental sector in Cyprus is presenting significant challenges for governmental authorities, with a substantial increase in both legal and unregistered properties. This rapid growth, driven by high demand, has compelled the Deputy Ministry of Tourism to enhance its enforcement activities. Concurrently, new legislation is being introduced to comply with upcoming European Union regulations, aiming to bring order to the burgeoning market. The situation extends beyond simple regulatory oversight, as it is exacerbating existing housing shortages and placing considerable strain on the island's property market.
Official statistics reveal a dramatic surge in registered short-term rental accommodations, illustrating the sector's swift expansion. As of April 2023, Cyprus had 4,765 registered properties offering 21,636 beds. Presently, these figures have escalated to approximately 12,000 officially listed properties, excluding those in rural and agro-tourism areas. This represents an impressive 92% increase in both registered properties and available beds within a two-year timeframe. The most sought-after destinations for these rentals are Paphos, Famagusta, and Larnaca, which collectively accommodate a large proportion of short-term lodgers.
However, this flourishing legal market is accompanied by a parallel, unregulated segment of operations. Authorities have received 81 complaints concerning unregistered rental properties in 2025 alone. The proliferation of these clandestine operations is a major concern, impacting state revenue and legitimate businesses within the sector. Tourism officials have highlighted the widespread effects, stating that illegal rentals worsen housing scarcity and intensify pressure on the property market. The dwindling availability of long-term rental options is consequently driving up prices, making affordable housing increasingly elusive for residents.
In response to these escalating issues, the Cyprus Parliament has approved the 2025 Amendment Law. This legislative action is intended to align domestic regulations with EU Regulation 2024/1028, which will become effective on May 20, 2026. The EU regulation seeks to introduce greater clarity and structure to short-term rentals across member states. The Deputy Ministry of Tourism has been actively conducting enforcement campaigns, utilizing on-site inspections and digital monitoring to identify and regulate unregistered properties. Suspected violations are being referred to the Legal Service for potential legal action.
Despite these committed efforts, regulating the short-term rental sector remains a complex and dynamic undertaking. The sheer volume of properties, combined with the market's inherent fluidity, poses continuous obstacles. Nevertheless, the introduction of the amended law and sustained enforcement are expected to cultivate a more equitable and transparent environment. The primary goal is to achieve a balance that satisfies demand for short-term stays while protecting community interests and upholding the integrity of the tourism industry. The coming years will be crucial in assessing the effectiveness of these measures in managing short-term rental chaos and establishing a sustainable framework.