C. Costa & Associates Auditors Ltd

Tax authorities are now eyeing short-term property rentals such as Airbnb which, due to loopholes in the law, are not subject to tax.

.The matter was raised on Monday at the House finance committee, which discussed the leasing/renting of properties via online services.

.Tax commissioner Yiannis Tsangaris said this income is not currently taxed. In order to be able to do so, laws pertaining to leasing needed to be amended first.

.The first step, Tsangaris said, would be for the tax department to be granted authority to create a register of short-term leases.

.Lawmakers meanwhile have tabled two related bills.

.Disy MP Averof Neophytou, who authored one of the bills, said that the market is always several steps ahead of legislators and government.

.In Cyprus, he said, many property owners rent out rooms and apartments online and, as a rule, such income is not declared and is therefore not subject to VAT, while no quality controls exist.

.The law should mandate that properties used in this way be registered, and owners who do not register would be liable.

.According to Neophytou, the majority of such lodgings are not licensed by the Cyprus Tourism Organisation (CTO).

.He also cited a legal provision whereby single-day leasing is unlawful.

.The other legislative proposal was tabled by Edek MP Elias Myrianthous. It provides for the registration and regulation of country homes that are not currently registered with the CTO.

.Today there are some 20,000 country homes and holiday cottages that are unregulated but leased online.

.Taxing these even at a low rate would bring substantial amounts into state coffers, Myrianthous said.

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