The Cyprus Government has recently announced the “Renovate-Rent” scheme—an initiative aimed at addressing the growing need for affordable rental housing while revitalizing unused residential properties. The plan’s strategic approach is to encourage property owners to renovate vacant homes and lease them at accessible rates, with the added benefit of significant tax incentives.
Purpose of the scheme
This scheme is all about putting vacant properties back into circulation. Many old homes across Cyprus, have been abandoned for years. The government wants to tackle this problem by offering financial and tax incentives to home owners who are willing to renovate and rent their properties out at lower, affordable prices. This could potentially be a solution to the huge and ongoing issue reported by owners of apartments whose building blocks have empty apartments for a long time. This issue is generally caused by a low or zero interest of owners to renovate and rent their apartments due to high renovation costs and income tax worries, making any renovation project with the sole purpose of renting it out, non-viable.
Which properties are eligible for the scheme?
Residential properties that haven’t been used for at least 12 months and were connected to the Electricity Authority Cyprus (EAC) for over 15 years, could qualify for the scheme. How can this be verified? A key indicator used to determine eligibility is energy usage. Properties with annual consumption of 200 kWh or under are considered inactive and could meet the eligibility criteria of this scheme.
Once renovated, these properties must be rented out for a minimum of four years at a maximum price of 70% of the current market value. This requirement ensures the homes stay truly affordable for those who need them most.
What are the benefits for home owners?
To make the scheme more appealing, the government is offering several tax incentives for participating landlords:
- No income tax on rent earned from these properties
- Exemption from the special defence contribution
- Higher capital allowances: 5% on buildings (up from 3%) and 15% on machinery or equipment (up from 10%)
These tax breaks are available for purchases and renovations carried out between 2024 and 2027 and apply to both individual property owners and companies.
Importance of the plan
For owners of older or unused homes, this is a unique chance to renovate with government backing and secure a steady rental income—all while contributing to a meaningful solution to Cyprus’s housing shortage.
A Win-Win Opportunity
The “Renovate-Rent” scheme presents a valuable opportunity for real estate investors and property owners to support community housing needs while gaining financially. By contributing to the country’s efforts to expand affordable living options, participants benefit not only from government support but also from long-term rental income potential.
At Arena Properties we’re here to help property owners understand the details of this new scheme and explore whether it’s the right fit. Whether you’re already managing rentals or considering entering the market, our team is ready to support you through the process—from eligibility checks to renovation planning and finding the right tenants.
