Cyprus’ short-term rental sector is currently locked in a tug-of-war between explosive growth and regulatory evasion. While official registration numbers have nearly doubled in the last 24 months, the Deputy Ministry of Tourism warns that a massive “shadow market” continues to operate outside the law, complicating efforts to manage the island’s housing and tourism resources.
According to the latest data from the Deputy Ministry of Tourism, reported by Property News Cyprus, there are now 9,153 officially registered self-catering properties providing roughly 39,218 beds. However, internal research suggests the total active market could be as high as 12,000 to 15,000 units, leaving thousands of operators in a legal gray area.
Regional Breakdown: The Distribution of Licensed Rentals
The growth of the legal sector is heavily concentrated in coastal tourism hubs, with Paphos maintaining a commanding lead in the official registry.
| District | Registered Properties | Capacity (Beds) |
| Пафос | 4,231 | ~18,500 |
| Фамагуста | 1,791 | ~9,000 |
| Ларнака | 1,407 | ~5,200 |
| Лимассол | 1,267 | ~4,800 |
| Никосия | 457 | ~1,700 |
The Crackdown: 81 Complaints and Growing Penalties
Since the beginning of 2025, authorities have processed 81 formal complaints regarding unregistered holiday homes. The Deputy Ministry has shifted to a “zero tolerance” stance, combining physical site inspections with advanced digital monitoring to identify illegal listings on major platforms like Airbnb and Booking.com.
The Stakes for Illegal Operators:
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Fines: Up to €5,000 for advertising or renting without a valid license.
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Legal Action: Cases with sufficient evidence are referred directly to the Legal Service for prosecution.
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Persistent Violations: Courts may impose additional daily fines of up to €200 until the property is registered or removed from the market.
Countdown to 2026: The “Big Brother” Effect
Regulators are looking toward May 20, 2026, as a turning point for the industry. On this date, Cyprus will implement EU Regulation 2024/1028, a harmonized framework designed to strip away the anonymity of short-term rentals across Europe.
What the New EU Framework Mandates:
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Mandatory Data Sharing: Platforms like Airbnb will be legally required to share monthly or quarterly activity data directly with the Cyprus government.
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Verified Listings: Booking websites must verify that every listing displays a valid national registration number.
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Unified Entry Point: A single digital portal will allow the Ministry of Tourism to track occupancy levels and tax compliance in real-time.
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Standardized Penalties: Consistent fines will be applied across the EU for hosts and platforms that host “shadow” listings.
Impact on the Local Housing Crisis
Beyond lost tax revenue, officials emphasize that illegal rentals are a primary driver of the island’s housing shortages. By bypassing commercial regulations, these units often inflate rental prices for residents in urban centers like Limassol and Nicosia. The upcoming 2026 regulations aim to stabilize these prices by bringing “underground” stock back into the formal, taxable market.
Source: Property News Cyprus