Tax changes for Airbnb owners, increase in accommodation fee

Property ownersexploiting three or more objects type Airbnbwill be encouraged to have closer contacts with the Greek tax authorities, Prime Minister Kyriakos Mitsotakis announced on September 16.

At the same time he announced about increasing the accommodation feeto cover the cost of repairing damage caused by floods in central Greece.

Owners who receive income from short-term rentals of at least 3 properties become entrepreneurs and will be required to open accounts with the tax office.

https://rua.gr/news/bissecon/57747-nalogi-v-gretsii-chto-izmenitsya-s-1-yanvarya-2024-goda.html

From 1 January 2024, income from short-term rentals of 3 or more properties will be subject to value added tax, as well as levies applicable to hotels and rooms for rent. This means that owners who receive income from short-term Airbnb rentals of at least 3 properties become entrepreneurs and will have to open accounting records with the tax office, create a company, hire an accountant to file VAT returns, enter income and expenses in myDATA, and pay to the budget VAT and other charges that hotels and rooms for rent currently pay, such as accommodation fees.

Accommodation fee

Please note that from 1 January 2024 the accommodation fee will be increased from 0.50-4 euros to 1-6 or even 10 euros, with the aim of increasing the special reserve to 600 euros to eliminate the consequences of natural disasters, such as floods in Thessaly. Accommodation fees apply to all types of accommodation, such as hotels, rooms for rent, etc.

What is the reality today

Owners (individuals) renting out real estate through platforms such as Airbnb are exempt from VAT, and the income they receive from short-term rental of real estate is taxed independently at the following rates:

• 15% for annual income up to 12,000 euros,
• 35% for income between 12,001 and 35,000 euros and
• 45% for rent over 35,000 euros.

In accordance with current legislation short-term property rental within the sharing economy exempt from VAT provided that, during the term of the lease, the lessor does not provide the lessee with additional services comparable to those provided in the hotel or similar sector, such as cleaning, garbage removal, replacement of linens and other household items, support staff and other maintenance services clients. In this case, the provision of bed linen is not considered as an additional provision of services in accordance with the above, and therefore does not affect the VAT exemption.

Likewise, the fact that the rental price includes other utilities such as electricity, water, telephone, internet and utility costs, which are collected from the landlord and then passed on to the tenant, is not an additional provision of services in the above sense and therefore also not affects the application of VAT exemption.

It is obvious that in this context no right to deduct VATpresented for the above-mentioned expenses of the lessor or others related to the property (for example, repairs or maintenance of the property).

Equal treatment

In order to ensure equal treatment from VAT Also exempt are short-term rentals of real estate that are carried out under the conditions specified in the previous paragraph in the context of the sharing economy, but are not carried out through digital platforms, since the use or non-use of the Internet is not a criterion for applying the VAT exemption.

Exemption from VAT applies to both individuals and legal entities carrying out such rentals, it should be noted that individuals carrying out VAT-exempt rentals of real estate are exempt from the obligation to begin work to obtain VAT and only for these actions, while as legal entities are required to begin operations.

However, where, in short-term Airbnb rentals (whether within or outside the sharing economy), the landlord provides additional customer service services equivalent to those provided by the hotel or similar sector, the total amount of remuneration paid will not be exempt, but will be subject to VAT. since it is considered as the provision of accommodation services, which are subject to a reduced VAT rate (13%), with the right to deduct VAT on related expenses.

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