One in three short-term rental properties are now considered commercial

There are at least 50 schemes in Athens, each with more than 20 residential units available for short-term rental. Ten of them, according to insideairbnb data for the capital, have even more than 50 and up to 110 rooms each.

In fact, we are talking about a professional level hotel business, since there are many hotels with fewer rooms than the above properties. Since many of these rooms are in the same building, they will now have to obtain licenses like regular hotels.

However, there is also a category of owners of three or more properties who, according to recent government decisions, will have to open their books and will be subject to value added tax, business tax rates, guest and tourist taxes from the beginning of 2024. These measures actually affect one in three properties offered through online platforms.

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How many of these landlords have three properties available for short-term rentals?

In the register of short-term rental properties of the Greek Real Estate Agency (Μητρώο Ακινήτων Βραχυχρόνιας Διαμονής ΑΑΔΕ) there are 168,819 properties registered, owned by 107,719 taxable persons (legal and physical). Of these, 27,367 objects belong to 5,297 legal entities, and another 141,452 are owned by 102,422 individuals.

No more than 2 real estate objects are owned by 94,982 individuals (92.7% of individuals). Three or more real estate properties are owned by 7,440 individuals and account for 30,329 properties. Thus, in total, 7,440 individuals and 5,297 legal entities owning 57,696 properties (34.2% of properties) will have to pay VAT and visitor tax, unless they decide to convert some of them into long-term rentals. Note that 4,100 individuals own exactly three properties (and another 1,687 individuals own four properties).

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The turnover generated by short-term rentals corresponds to 14.41% of the total economic activity of Greek tourism

Short term rentals, i.e. Accommodation of tourists in apartments and houses rented for a short period of time with booking through online platforms (Airbnb, Booking, Trip Advisor, etc.) is currently is an integral part of the Greek tourism product and hospitality options in Greece.

Research by Grant Thornton (2022) shows that the turnover generated by short-term rentals corresponds to 14.41% of the total economic activity of Greek tourism, and accommodation costs in such establishments reached €1.4 billion at the end of last year. Today, almost a year later, as Greek tourism heads towards a new record year in terms of arrivals and receipts, the activity is estimated to have reached 20% of the total tourism economy, with revenues for short-term rental properties exceeding 1.5 billion .

Short-term rental turnover in Greece, both direct (i.e. rents) and indirect (i.e. costs incurred by tenants), is estimated to reach €3.3 billion in 2022, up from 2. 96 billion euros in 2019 and 1.42 billion euros in 2016, according to a Grant Thornton study commissioned by the Hellenic Chamber of Hoteliers (Ξενοδοχειακού Επιμελητηρίου Ελλάδος).

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According to dominant online short-term rental platform Airbnb, “the vast majority of Greek hosts – around 70% – have only one rental property, and most are located outside urban centers, helping to spread the benefits of tourism to local families and communities.” . In 2022, the typical owner of a short-term property in Greece earned about $4,000. More than two-thirds of hosts say they use Airbnb income to afford the rising cost of living as energy prices and mortgage payments rise.”

The new rules will have to strike a balance between protecting housing and supporting ordinary families who rent out their space to help their home financially.

In a conversation with Greek publication Kathimerini, Airbnb’s head of public policy and campaigns in Southern Europe, Valentina Reino, explained that “Airbnb has long been at the forefront of the fight for progressive regulations for the industry and welcomes the government’s decision to more clearly distinguish between individual and professional hosts.” However, she adds, “new, more restrictive rules, supported by some, will need to strike a balance between protecting housing and supporting ordinary families who rent out their homes to help their home financially: measures such as limiting the number of overnight stays, could harm Greek families and the tourism sector, as well as jeopardize the work done with AΑΔΕ.”

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As part of government intervention in the short-term rental market and to address tax evasion, a new updated memorandum of understanding was signed this week between the Independent Government Tax Office and Airbnb, Booking.com and Expedia Group/VRBO.

Under the new agreement, digital platforms will now introduce editorial checks into the property registration number field (AMA/ESL/MAG). To avoid errors and evasion on the part of managers, they will additionally send the first and last name of the IBAN account holder to identify and verify managers, will indicate the total amount of annual rent (overnight stays) for each entry, and will return data on those managers to ADA in file format. who have not complied when they have already received notices to complete or correct their property number.

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Impact on tourist destinations

Critics of short-term rentals not only accuse them of unfair competition with the hotel industry and lost revenue for the state. They are also heavily criticized for a number of other consequences. We are talking about a significant increase in rents and the inability to find housing in tourist areas for government employees, tourism workers, doctors, teachers and representatives of other professions necessary for the functioning of local communities. In addition, according to Grant Thornton, among the consequences – the risk of changing the character of neighborhoods, cities, towns and islands. Like similar international studies, the report also talks about “changing urban characteristics, local character and the cultural identity of areas”.

It is also noted that due to lack of experience, many owners have problems with inconvenience, proper maintenance and repairs. This, in turn, leads, according to Grant Thornton, to “the risk of deterioration in the quality of the Greek tourism product and a negative impact on its international recognition”. In addition, concerns related to public and personal safety, waste disposal burden and energy consumption are mentioned.

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