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We have reported before that one of the best investment returns are the villas to let (Airbnb), especially for popular localities such as the Famagusta region and to a lesser extent Paphos.
Due to the increase of tourists and the lack of beds (so far), this “new” method of leasing, which on most occasions is tax free (not declared – quite illegal), encouraged investors and villa owners to opt for this type of investment, which is quite lucrative we must say and which show a net return of around 8%-10% p.a. based on value of the property.
The prevailing difficulties under this new method of letting have not surfaced as yet but it will not be too long before it becomes a big problem.
The agents are very happy to let out a villa/house, with no questions asked as long as the tenants pay (in advance) the required rent. End result is that the let property is occupied by numerous people (the more people the less the cost for the tenants) no restrictions placed (family etc) causing all sorts of problems and nuisance to the neighbours.
In a recent case where a neighbour with loud tenants had no peace, he called the police on several occasions (which they attended mind you – strange!). The neighbour could not put up with the next-door villa due to the noise, foul language and having no response even after the police came at 3am. He departed for his Nicosia home!!
So that we can provide some tools of protecting oneself from the neighbour’s tenants we could suggest the following, based on a Bill that it is now pending for approval at the House:
Let properties will now require a C.T.O. license if let for less than 30 days. If the lets are as such there is a case for an illegal let to be reported to the C.T.O.
No properties can be occupied if the property has no certificate of final approval.
Based on this:
Write a letter to the letting agent and to the owner stating that you will report the lettings as being illegal to the C.T.O. as well as to the Income Tax people (the latter will get them scared).
Sue them, if no satisfactory response (you must be patient based on the Cyprus legal system – cost of money and time) but seek an order of a sort not to let the property illegally.
This is a good business and a lucrative one for investors/agents and others and indeed it helps the tourist industry and by projection the income from foreign currency, but this article is written with the interests of the neighbours in mind.
Villas to let offer less cost per person than those of the hotels and also help the local establishments (they have to shop for the food and drink, eating out, it helps the restaurants and bars, the taxis/car hire business).
Based on the Hoteliers Association report, around 20% of foreign visitors do not stay in hotel establishments. So out of the three million tourists 600,000 opt for the villa to let properties? This is a big number and you can appreciate the pluses and minuses, whereas recent reports state that approximately 40,000 units are let each year, split 50% villas + apartments.
Of course, this type of lets is not unique for Cyprus, but it is worldwide causing reactions e.g. from Barcelona and Venice, having declared “no more tourists”, whereas Santorini is considering similar measures. Apartment lets in Nicosia is half the price of the tourist areas, plus a car hire (this is an alternative), but again the problem will remain be it not to the same extent. This state of affairs will not end but it will increase, based on the international market trends (as long as we have a shortage of tourist beds).
Notwithstanding our numerous reports on the subject going back 2-3 years and more recently, the Paphos Chamber has recently “discovered” the problem, claiming that the local hotels suffer as a result of the villas to let, especially during the off-season.
In order to address the problem, this state of affairs must be examined both by the C.T.O./Income Tax/Hotels Association and others.
The pending Bill suggests that there should be a registrar of approved properties to let and the landlords will be liable to pay income tax, as well as V.A.T. (where appropriate), whereas if the let forms part of an apartment building the other occupiers must approve this let by any other interested owner (most likely they will refuse).
Things are changing but we have a long way to go. Of course, the new measures will disappoint buyers to let, but people who let out must bear responsibility towards their neighbours.
