Changes regarding the short-term rental accommodation law
The number of properties listed on the short-term platforms is rapidly increasing in Greece amidst the remarkable growth of the tourism sector. Nowadays, more and more homeowners are placing their properties on popular short-term rental platforms, such as Airbnb, Booking, and HomeAway.
According to data published by the Center of Planning and Economic Research, the number of properties up for short-term rent in Greece has dramatically soared from just 130 in 2010 to over 200,000 by the end of 2019. Furthermore, total rental income via short-term lease platforms amounted to 1.15 billion euros in the period from June 2018 to May 2019, according to a survey conducted by INSETE.
It should be emphasized that the legal framework, as well as the taxation system, was insufficient to regulate this fast-growing market, which led to serious problems. As a result, a lot of apartment units have been taken off the market for full-time residents while the housing costs have increased dramatically. Spitogatos.gr portal, for example, has documented a rate rise of 20 percent in the center and the western suburbs of Athens in 2019.
In order to deal with this unprecedented situation, the Greek government is planning to activate restrictions both on individual owners and commercial organizations that utilize properties advertised on short-term rental platforms. More specifically, the ministries of Finance, Labor and Tourism are to set a special committee with the responsibility for adopting a joint ministerial decision to address the problem.
As stated by the Kathimerini.gr portal the government has imposed the following restrictions on property owners:
- Landlords must register their property on the short-term residence register before they can create a listing for it on a digital short-term rental platform, otherwise a fine of 5000 euros will be imposed.
- No more than two properties can be utilized as short-term rentals by the same tax registration number. However, it is not certain that this provision will apply to the entire country. There will be clarifications about the regions where the number of objects can exceed the specified limit.
- The rental of any property shall not exceed 90 days per calendar year. As for islands with a population of less than 10,000 the limit is 60 days per calendar year. However, the owners with annual income from rentals under 12,000 euros can lease their properties longer than the 90-day or 60-days limit, respectively.
The annual rental income taxes are calculated as follows:
- If the rental income is up to 12.000EUR p/year the applicable tax is 15%
- If the rental income is more than 12.000EUR p/year but less than 35.000EUR p/year the applicable tax is 35%
- If the rental income is more than 35.000EUR p/year the applicable tax is 45%
Fine is going to be imposed on those property owners who do not comply with the above measures.
It should be reminded that the Airbnb company was founded in California in 2008. This short-term rental platform has completely changed the game in the Greek real estate market. The Airbnb era has fetched billions of euros to the country’s economy, especially to the real estate market. Undoubtedly, the demand for the short-rent apartments will remain steady, since the tourism sector, which is the country’s economy main pillar, will continue to grow rapidly over the next years.
DKG Development Company experts will help you to understand the new regulations and choose the best option for lucrative investment.