The Law Office of the Republic has rejected a proposal by the deputy tourism ministry to cap the number of short-term rental properties a person or company can register in Cyprus. However, discussions on the issue are still ongoing.

The move was part of an effort to regulate the booming short-term rental market, including properties listed on platforms like Airbnb. The ministry had proposed limiting each individual or company to a maximum of two properties in the self-catering accommodation register.

The plan came to public attention recently, following a parliamentary discussion on February 18. During the session, Deputy Tourism Minister Costas Koumis confirmed that a legislative amendment had been submitted to the attorney-general’s office.

The amendment aimed to enforce mandatory registration for all short-term rental properties before they could be advertised or rented out.

A few days later, Koumis spoke on state radio, explaining the reasoning behind the proposal. He warned that “para-hotel operations” were increasing, with investors, mainly foreign, buying multiple properties, registering them as short-term rentals and operating them without the same obligations as traditional hotels.

He said the unrestricted expansion of such rentals created unfair competition in the tourism industry.

Under current rules, an investor can purchase 10 to 12 apartments, convert them into short-term rentals, and compete with hotels while avoiding the same regulatory burdens. The government had hoped that limiting the number of properties an individual could register would curb this trend.

The proposal also included new penalties for violations, which fall under the jurisdiction of the executive branch. These penalties are not subject to consultation with those affected, according to a report on the matter.

Despite the rejection of the cap, the issue is expected to remain under review. The house commerce committee is set to discuss the broader regulation of short-term rentals, including compliance with an upcoming EU directive on the sector.