So you want to purchase a holiday home in Cyprus but you want to let it out to help pay for the running costs, interest and mortgage repayments. Legally you can only rent to Cypriot Nationals on longer term fixtures without a licence. You need permission from the Cyprus Tourist Organisation (CTO) to rent to holiday makers (and you will not get a licence for less than five properties) so the best bet is place your property with a registered holiday letting agent in Cyprus. You might also consider your developer who might sell the property to you these days with a rental guarantee. The commissions payable won't be small, at least 30% and might be 40%, but at least it will be legal and your property will be in good hands for the minor repairs and re-decorating each year to keep things up to standard for the holiday companies. And you need to register for Cyprus Tax - taxed over over CYP10,000. And don't forget to declare your foreign income for taxation in the UK anyway. http://www.direct.gov.uk/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/TaxOnRentalIncomeArticles/fs/en?CONTENT_ID=10013347&chk=GJhMCJ To be profitable you will most likely need 60% occupancy but you will need to take into account interest you pay on your mortgage, the usual shared community property charges for the complex,local authority taxes, water, electricity for the aircons,commission on lettings, cleaning if not in commission,repairs and replacements (furniture and beds every 3 years), redecorating and Cyprus and UK Tax. The CTO also require to inspect the property for standards. So do the holiday companies and they de-list any property that is not in tip top condition for their customers. Some people say that they have contacted the CTO and they are not bothered. If you contact them and ask them to inspect a single property they will not simply because you need to apply for a licence which means min 5. The other problem you might have is getting insurance that will cover your property and your holiday renters. Look out for the clause that requires you to have obtained all necessary permissions and licences. So your insurance will be invalid and public liability claims can be in seven figures. Good Luck for a successful and profitable Buy to Holiday Let in Cyprus. |
