Closing the Loophole for Rental Income

Closing the Loophole for Rental Income

The practice of renting properties in Cyprus through Airbnb and other websites has come under the scrutiny of the tax authorities who are looking to address the problem of tax evasion on rental income received.

APPROXIMATELY 20,000 properties in Cyprus are rented via Airbnb and other websites and although some owners are paying tax on the rental income they receive, others manage to avoid paying tax.

The House Finance Committee discussed the renting/leasing of properties via Airbnb and other on-line services yesterday with a view to plugging loopholes in the law.

Yiannis Tsangaris, the tax commissioner, explained that the laws need to be changed in order to tax on-line generated rental income – and the first step would be to permit the relevant authority to set up a register of short-term leases.

Meanwhile two draft bills were discussed by the Committee:

The author of one of the bills, DISY MP Averof Neophytou, said that law must require the owners of properties who rent them out via Airbnb and other on-line services to register those properties with the authorities; owners who failed to register would be held responsible; a fine of €5,000 was suggested.

Mr Neophytou pointed out that single day leasing is illegal.

A second bill, proposed by EDEK MP Elias Myrianthous, would enable properties that are not currently registered with the Cyprus Tourism Organisation (CTO) to be registered and regulated.

Greece introduced legislation a few months ago to tax annual rental income: 15% on income up to €12,000; 35% for income between €12,000 and €35,000; and 45% on income above €35,000.

Similar legislation has also been introduced in the Netherlands, Britain, Germany, Spain and other European countries.

Courtesy of Cyprus Property News

Leave a Reply

Your email address will not be published. Required fields are marked *