Villas to let and legal obligations
I have often written in this paper that one of the best investment returns are the villas to let and AirBnB, especially for such popular locations as the Famagusta region and to a lesser extent Paphos.
Due to the increase of tourist numbers and the lack of beds, this “new” method of leasing which on most occasions is tax free (not declared and quite illegal) encouraged investors and villa owners to opt for this type of investment, which is quite lucrative and could show a net return of around 8-10% p.a. based on the value of the property.
The prevailing minor problems under this new method of let have not surfaced as yet and it will not be too long that it will become 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. He end result is that the let property is occupied by numerous people (the more people, the less the cost for the tenants), no restrictions are placed (family, etc.) causing all sorts of problems to the neighbours.
In a recent case a neighbour with loud tenants could not have his peace and called the police on several occasions (which they responded to, mind you – strange!). The neighbour could not put up with the noise in the next door villa, fowl language, etc. and having no response even after the police came at 3 in the morning, left for his Nicosia house!
So that we can provide some tools of protection from the neighbours’ tenants, I could suggest the following:
Let properties 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. 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, both, if no satisfactory response (you must be patient based on the Cyprus legal system – waste 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 and community 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 food and drink, eating out, it helps the restaurants and bars, the taxis/car hire business, etc). Based on the Hoteliers Association report, around 20% of the foreign visitors do not stay in hotel establishments. So out of the 3 mln tourists, about 600,000 opt for villas to let. This is a big number and you can appreciate the pluses and minuses.
Of course this type of let is not unique to Cyprus, but it is worldwide causing reactions, e.g. from Barcelona and Venice, having declared “no more tourists”.
We receive, as an office apartment lets in Nicosia for lets with half of the price in the tourist areas, plus a car hire (this is an alternative), but again the problem will remain. 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 numerous reports on the subject going back 2-3 years and more recently, the Paphos Chamber has recently discovered the problem, claiming that the Paphian hotels suffer as a result of the villas to let, especially during the off season period.
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.