Buying a hotel in Cyprus: Limassol, Paphos, Ayia Napa

Cyprus had a record tourism year in 2025 and a rough spring in 2026. According to the statistical service, about 4.5 million tourists visited in 2025, up about 12%, and tourism revenue was estimated at about EUR 3.7 billion. In the first half of 2026 arrivals fell about 10% to roughly 1.66 million, and the hotel association reported losses of around 30% in March to May, with a recovery in summer and September occupancy of about 75% to 80%. The island is small, the season long by Northern European standards and demand concentrated in a few towns. For a buyer the first question is not the view or the price: it is whether the hotel is properly licensed.

The licensing backlog: read this before anything else

Hotels and tourist accommodation in Cyprus are licensed by the Deputy Ministry of Tourism, and for roughly three decades a large part of the stock has operated in a legal grey zone, because buildings were extended or renovated without matching planning permits.

• According to reports in July 2026, of 728 hotels and tourist units registered at 27 April 2026, only 168 (23%) held a full operating licence, 158 (22%) held a temporary licence, and 402 (55%) had neither. More than half of the units had never applied.
• The Famagusta district, where Ayia Napa and Protaras are, has the largest number of units and the lowest share of full licences.
• A transitional regime lets units with a construction permit operate until 31 December 2026. A bill before parliament in 2026 would extend that to 31 December 2028 with safety and health conditions. We could not confirm whether it has passed, so check the current legal position on the day you buy.

For you this means: a hotel without a full licence can be sold and bought, but the licence risk moves to you. A bank may not finance it, an insurer may ask questions, and the value depends on whether the planning irregularities can be regularised and at what cost. Ask your Cypriot lawyer for the licence status, the building and use permits, and any enforcement notices before you pay a deposit.

Who can buy

• EU citizens and EU-owned companies buy under the general rules, with the usual checks of title and permits.
• Non-EU citizens need permission from the Council of Ministers, applied for through the District Office after the sales contract is signed. For ordinary residential use the limits are small (one house or apartment, or a plot within a set size). A hotel is a commercial purchase: law-firm summaries say approval can be given where the project benefits the Cypriot economy, for example through tourism or jobs, and may take months. A draft replacement law was discussed in 2025 to tighten the rules and close gaps; we did not confirm whether it has been adopted.
• A company owned by non-EU persons can buy property for its operations. Many investors hold a hotel through a Cypriot company; see holding structures and taxes for hotel owners.

Residence through investment is a separate topic with its own conditions and they change; read the Cyprus residence and Golden Visa article for the present position and do not assume that a hotel purchase qualifies.

City hotels versus resort hotels

• Limassol: the island's business and lifestyle city. Business travel, conferences, an international community and a growing premium residential market give it more activity outside the summer months. Hotels here are priced for location and often compete with branded residences and serviced apartments. See Limassol property investment, yield and prices.
• Paphos: leisure destination with an airport, a heritage and golf offer, and a large share of older four-star stock. The season is longer than in the north of Europe but still seasonal; many hotels are owned by long-standing local families. See Paphos property investment, yield and prices.
• Ayia Napa and Protaras: resort towns with a short, intense season, family and youth segments and many apart-hotels. See Ayia Napa and Protaras prices and yield. This is also where the licensing problem is most pronounced.

We could not find a consultancy-published price per room for Cyprus. Asking prices on portals range widely and are a seller's wish, not a transaction price.

Seasonality and occupancy

Resort hotels on the south coast fill in a window from about April to October. Winter demand exists, from Northern and Eastern European guests, retirees, golf and business travel, but at much lower rates, and some hotels close for several months. Limassol and Nicosia have the flattest year. Seasonal staff, utilities and renovation have to be paid for out of a few strong months.

Two lessons from 2026. First, demand depends on air capacity and the regional security situation: the spring slump showed how fast a quiet season can turn into a loss. Second, source markets matter. The United Kingdom has been the largest market for years, and a single-market dependence is a risk you should model. Ask any seller for monthly occupancy and ADR for at least three years, including 2026.

Taxes and costs, in outline

The following comes from law-firm and tax-news summaries of the 2026 reform and should be confirmed by a Cypriot adviser for your structure.

• Corporate tax rose from 12.5% to 15% from 1 January 2026.
• Capital gains tax is 20% on the sale of Cypriot immovable property. After the reform it is reported to apply also to the sale of shares in a company that owns Cypriot immovable property above a lower threshold of its asset value (reported as 20%, previously 50%). This matters if you plan to sell a hotel by selling the company.
• VAT on hotel accommodation is reported at the reduced rate of 9%, against 19% standard. Whether VAT is charged on the purchase of the hotel building depends on the structure of the deal.
• Land registry transfer fees follow a scale of 3% up to EUR 85,000, 5% up to EUR 170,000 and 8% above, with reductions where the sale is subject to VAT. Stamp duty was reported abolished for documents signed from 1 January 2026.

See Cyprus property prices and buying costs and Cyprus capital gains tax on sale for the general rules on property, and the Ministry of Finance for official texts.

Leases, operators and exit

Many Cypriot hotels are owner-operated by local families. If you buy to hold passively you will need an operator or a lease, and the conditions matter more than the headline rent; our guides management agreements, leases and franchise and how to choose a hotel operator set out what to negotiate.

Checklist before an offer

• Licence status from the Deputy Ministry of Tourism: full, temporary or none.
• Building permit, use permit and planning certificate matching the real building and room count.
• Title, mortgages and any court orders on the property.
• Whether non-EU approval is needed and how long it takes.
• Three years of monthly accounts, including 2026.
• Tax quote for asset deal versus share deal, in writing.
• Financing: hotel acquisition financing for foreign buyers.

FAQ

Can I buy a hotel in Cyprus without a full licence? Legally you can buy it, but you take over the licensing risk. Many units operate under a transitional regime, so ask your lawyer exactly what the deadline is and what it takes to obtain a full licence.

Do non-EU buyers need permission? Generally yes, from the Council of Ministers via the District Office. For a commercial project such as a hotel, the case is judged on its benefit to the economy. Rules may change, so check on the day.

Which town is best for a hotel investment? There is no single answer. Limassol has the most year-round activity and the highest entry cost, Paphos is a classic leisure market, and Ayia Napa is the most seasonal with the biggest licensing question.

How we help

We help you compare hotels, read licence and permit files with you, and coordinate an independent Cypriot lawyer and tax adviser. We are a trilingual platform and do not operate hotels. See hotels in our catalogue, the Cyprus page, the hotel investment guide and the Deputy Ministry of Tourism for official licensing information.

This article is informational only and is not legal, tax or investment advice. Figures come from press and professional sources and change over time; confirm current rules and numbers with a local lawyer and tax adviser before you buy.