The landscape of short-term rentals in Greece is continuously evolving, influenced by recent amendments to the law and the dynamic nature of the sharing economy. Hosting properties through platforms like Airbnb has become a lucrative endeavor, with Greece’s vibrant tourist destinations attracting visitors from around the world. In this updated article, we will explore the latest legal developments and tax implications for property owners engaging in short-term rentals in Greece.
Recent Amendments to the Law
Effective from January 2024, significant changes have been introduced regarding the taxation of income from short-term rentals. Property owners who rent three (3) or more properties will now be subject to a 13% Value Added Tax (VAT) and additional fees applicable to hotels and rented rooms: a fee for transient guests at 0.5% of turnover as well as accommodation fee applicable in the past only to hotels and tourist accommodations which currently varies from 0.50 to 4 euros, depending on the type of facility.
However, it’s important to note that while taxation may impact the profitability of short-term rental operators, they are not obligated to adhere to the same terms and conditions that apply to traditional hotel operations. This means that although they may incur taxes and fees, they have greater flexibility in their operations.
Exemption from VAT
Notably, property owners who rent their properties through platforms like Airbnb were previously exempt from VAT. This exemption provided an incentive for many individuals to enter the short-term rental market.
Taxation on Short-Term Property Rentals
Income earned by individuals from short-term property rentals in the sharing economy is classified as income from real estate. The tax rates for such income are as follows:
- 15% for annual income up to 12,000 euros.
- 35% for income ranging from 12,001 to 35,000 euros.
- A 45% rate for rentals above 35,000 euros.
These tax rates apply under the condition that the properties are rented furnished without the provision of any services other than providing bed linen. If any other services are provided, the income is considered income from a business activity as defined in Article 21 of Law 4172/2013.
Airbnb’s Impact on Greece
Airbnb has found a substantial and lucrative market in Greece, driven by various factors. Short-term property rentals have had both positive and negative impacts on urban centers, tourist destinations, and even less-visited areas of the country. It is noteworthy that Airbnb’s turnover in Greece is expected to reach 4 billion euros this year.
The platform estimates that approximately 100,000 rooms, apartments, and houses are available for rent throughout Greece. In cities like Athens, there are 12,345 listings, according to Inside Airbnb, a platform that monitors the global Airbnb phenomenon. Thessaloniki boasts 3,717 listings, while in Crete, there are 25,425 listings. In the South Aegean Region, encompassing the Cyclades Islands, the number of listings soars to 32,186.
Understanding Short-Term Rental Regulations and Permissions in Greece
Introduction
Hosting short-term rentals has become increasingly popular in Greece, especially through sharing economy platforms like Airbnb. However, before you open your property to paying guests, it’s crucial to understand the legal regulations and permissions that apply to such activities. In this article, we will explore the current legal landscape in Greece regarding short-term rentals and the obligations hosts must fulfill.
Greek Law on Short-Term Rentals
Greece has established regulations for short-term rentals leased through sharing economy platforms, as outlined in Article 111 of Law 4446/2016 and its implementing acts. Under Greek law, a short-term rental is defined as the lease of a real estate property for a specified period of less than one year, primarily offering furnished lodging and bed sheets. This definition covers apartments, houses, and various autonomous structures, including rooms within apartments or detached houses.
Anyone, whether an individual or a company, who manages a property for short-term rental purposes is legally termed a short-term leasehold property manager. This may include property owners, sub-lessors, usufructuaries, or third parties.
Registration for Short-Term Rental Properties
Before renting out your property to paying guests, you must register your property on the Short-Term Residence Register held by the Independent Authority for Public Revenue (IAPR) and obtain a registration number known as “AMA.” This registration number must be prominently and clearly displayed in your listing. Additionally, you are required to submit the Short-Term Residence Declaration by the 20th of each month following the guest’s check-out. The registration process can be accessed online.
In cases of co-hosting or co-ownership, which may involve additional rules and obligations, it is advisable to consult with your local councilor or tax consultant for further guidance.
Licensed Hotels, Bed & Breakfasts, and Tourist Accommodations
It’s important to note that tourist accommodations, such as hotels and bed & breakfasts, have their own legal regime, governed by specific laws (Articles 1 to 74 of Law 4276/2014, Article 46 of Law 4179/2013, and Law 4442/2016). These establishments are not subject to the provisions of Greek law on short-term rentals within the sharing economy framework. Instead, they must obtain a special operating license (ESL / MAG number), which should be clearly displayed in their listings.
Property Registration Numbers on Airbnb
Airbnb has partnered with the IAPR to simplify the compliance procedure for property registration in Greece. As of June 1st, 2021, any new listing on Airbnb is required to include the property registration number (AMA, ESL, or MAG) in a dedicated field on the platform. Hosts must confirm their compliance or exemption.
Exemptions from Property Registration
There are two main reasons for exemptions from property registration under Greek short-term rental law:
- Exemption due to the nature of the property, such as public entities or properties like Mount Athos monasteries.
- Exemption because the property does not qualify as real estate, including boats, tents, RVs, or other temporary constructions.
If there is any uncertainty about your eligibility for exemption, it is advisable to consult with your local councilor or tax consultant for clarification.
Additional Considerations
Apart from legal requirements and permissions specific to short-term rentals, hosts should also take into account the following factors:
- Contractual Agreements and Permits: Review any leases, contracts, building regulations, or community rules that may have restrictions on subletting or hosting. Consider adding an addendum to your lease or contract to clarify responsibilities and liabilities.
- Mortgage Restrictions: If your property has a mortgage, check with the lender to ensure there are no restrictions against subletting or hosting.
- Subsidized Housing Restrictions: Subsidized housing often prohibits subletting without permission. If you live in subsidized housing, contact your housing authority or housing association for guidance.
- Housemate Agreements: If you share your home with others, create a formal agreement with your housemates to outline expectations regarding hosting, guest etiquette, revenue sharing, and more.
- EU Consumer Protection Law: Comply with EU consumer protection law when offering goods or services online, considering your responsibilities as a host to protect consumers in the EU.
At Amoiridis Law Services® we are dedicated at assisting our well-respected clients successfully complete any of their investment projects in Greece. Thanks to our longstanding experience, we are able to provide a full package of consultancy services to our almost exclusively international clientele, customized to their specific needs.
As a result, we have represented clients from all around the globe regarding their projects in Greece. Our network of associate experts, composed by both in-house and external solicitors, notaries, accountants, tax experts, civil engineers, topographers, realtors etc., enables us to provide an all-in-one package of consultancy services, guiding you throughout the entire procedure of transferring your tax residence to Greece and benefiting from the upcoming tax exemption package.
For any further information and clarifications please do not hesitate to contact our qualified legal team, ready to provide you with further personalized information tailored to your needs and your profile.
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Athens, September 2023
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