According to the Law 34(I)/2019, a ‘self-service’ or ‘self-catered’ establishment may constitute an individual tourist furnished villa or house or apartment, which is registered with the Register of Self-Service (Sharing Economy) Establishments maintained and monitored by the Deputy ministry of Tourism.
A ‘self-service’ or ‘self-catered’ establishment distinguishes in that the only service provided is the provision of the premises on a short-term basis for accommodation purposes. On the other hand, ‘hotels’ (including main hotel buildings, complexes of small houses, traditional premises etc) and ‘tourist establishments’ constitute premises within which other services -beyond accommodation services- are provided as well (it is noted that criteria apply on the categorization of an establishment as a hotel or tourist establishment).
First and foremost, in order for an establishment to be eligible to be registered with the Register of Self-Service (Sharing Economy) Establishments for the purpose of being rented-out on a short-term basis, it must bear the features and fulfil the technical and operational standards for its classification in one of the following classes of premises:
- tourist furnished villas, being establishments that have -among others- independent and direct external access, privacy, autonomy of plot of land and construction, as well as a private garden (as designated).
- tourist furnished houses, being furnished houses in a raw or in a complex that have -among others- operational autonomy, private, common or external access and privacy.
- apartments, being individual units in a jointly-owned building which can property be occupied and exploited as a distinct and autonomous unit for residential purposes.
In any case, the areas, interior and exterior (including parking space are), of each such ‘self-service’ or ‘self-catered’ establishment must have been constructed in accordance to the respective planning and building permits as well as to the applicable laws and regulations, while the interior areas of each such establishment must consist of at least a living area (separate or not), sleeping area (may be unified with the living are in the case of studios), cooking area and a washroom (bath); in this respect, it is noted that the maximum accommodation capacity for each such house is 10 persons (in a 4/5 bedroom house) while any house a having more than 3 bedrooms, must have a second washroom (bath).
Of course, the establishments, of any class, must be connected to the utilities and have all appropriate installations, including air-conditioning (cold – hot), water supplying (cold – hot), drainage and electrical installation. To this end, it goes without saying that the construction of the establishment must be permanent and all necessary planning and/or building permits, in accordance to the type and use of the premises, must have been obtained.
Taxes
Provided that an establishment fulfils the operational and technical standards and specifications, as explained above, in order for such an establishment to be registered with the Register of Self-Service (Sharing Economy) Establishments, there is a series of prerequisites:
- the registered owner, the beneficiary, the owner of the unit or the (property) manager, as the case may be, be registered with the Tax Department for the purposes of Direct Taxation; to this end a declaration is made by the applicant at the time of filing of the application for the registration of a ‘self-service’ or ‘self-catered’ establishment with the Register of Self-Service (Sharing Economy) Establishments.
- the registered owner, the beneficiary, the owner of the unit or the (property) manager, as the case may be, be registered with the Tax Department for the purposes of Indirect Taxation – VAT, provided that there is an obligation for registration in accordance to the relevant Law on Value Added Tax of 2000 (Law 95(I)/2000); if registered for VAT purposes, this must be declared at the time of filing of the application for the registration of a ‘self-service’ or ‘self-catered’ establishment with the Register of Self-Service (Sharing Economy) Establishments.
- conclusion of insurance policy for the ‘self-service’ or ‘self-catered’ establishment, against any risk, fire and civil liability.
As a concluding remark, it appears that the criteria and obligations introduced relating to the provision of ‘self-service’ or ‘self-catered’ accommodation services aim to secure that the standards of this alternative type of accommodation are of a satisfactory level, analogous to the standards of traditional types of accommodation, giving the consumers more options on choosing the accommodation type that better suites their requests and needs.
Summary- Required Procedure and Documents.
Categories:
- Furnished Villas;
- Furnished Residences (Townhouses);
- Furnished Apartments.
Maximum Capacity
5 bedrooms (10 people).
Operator obligations:
- May only advertise and or rent if they are registered
- Must not advertise any false or misleading information.
- Must be granted a special operating label and registration number by the Deputy Ministry of Tourism.
- Registration number must appear on all advertising and promotional material.
- Registration number must appear on relevant transactions.
- Operator can be a natural person or company and the registration permit will be issued in the name.
- The property must be finished and not be under construction nor should any part complex still be under construction.
- Subletting is not allowed. It must be rented as a whole unit no by bedroom.
- Operator must pay income tax.
- Operator must pay overnight fees to the local authority.
How to Register
Submit the following to the Deputy Minister of Tourism through the online platform:
1. Application and solemn declaration confirming
- Registration with tax Department (Tax ID number of the Operator or VAT number).
- Property information.
- Insurance Certificate (any risk, fire & public liability)
2. Documents (must be date valid)
- Building permit or town planning permit.
- Copy of utility bill from EAC with premise number (10digits)
- Passport/ID card if natural person or Certificate of Incorporation if a company
3. Registration Fees
Renewal
- Every 3 years
- 3 months prior to expiration
Health & Safety Obligations
- Basic equipment and furniture must be provided includes: fire banket, fire extinguishers first aid kid.
- Information about the use of equipment.
- Operator must display the relevant safety form in a prominent place which will include: Emergency telephone number 112, full address & operator telephone.
Inspections
The Deputy Minister of Tourism reserves the right to carry out inspections to ensure full compliance with the above for any holiday rental accommodation.
In case that you require any further information/clarification please do not hesitate to contact us at info@ctalaw.net
