Greece Introduces New Tax and Rental Framework for Airbnb Properties Amid Housing Crisis

Starting January 1, Airbnb licenses will no longer be issued in several districts of downtown Athens as part of a new initiative to address Greece's housing crisis and increase property tax revenue.

In line with these efforts, the Greek government has introduced a revised tax and rental framework for Airbnb properties, and the Independent Authority for Public Revenue (AADE) has released guidelines to clarify the new rules for property owners.

Short-term vs. Long-term Rentals

The guide distinguishes between short-term and long-term rentals. A short-term rental is defined as one that lasts no more than 59 days, offers only basic amenities like linens, and is furnished. This 59-day limit applies to each lease, not the total days the property is rented in a year.

Property owners must register their units in the Short-Term Stay Property Registry, acquire a Property Registry Number (PRN), and file a Short-Term Stay Declaration for each lease. Eligible properties for short-term rental include apartments, detached houses, standalone residential units, and individual rooms within these units, with each rented space requiring its own PRN.

Rentals that exceed 59 days are classified as long-term rentals and are subject to different tax obligations for the owner.

Properties offering additional services, such as breakfast, cleaning, or transportation, are reclassified as tourist accommodations. These properties are then subject to a different tax regime and administrative requirements, including registering a business activity with AADE.

It is permissible for a property to be used for both short-term and long-term rentals. If a lease lasts longer than 59 days, a Long-Term Lease Declaration must be filed. Conversely, leases of 59 days or less require a Short-Term Stay Declaration.

Taxation and Business Activity

For tax purposes, income from renting up to two properties short-term without additional services is considered property income. However, if an individual rents out three or more properties or offers additional services, the income is classified as business income. It is subject to VAT registration at a rate of 13%.

The guide also specifies that the number of PRNs issued correlates with the number of properties a person rents out. Notably, if a single property is divided into multiple rental units, such as separate rooms, each room is considered a distinct property for registration purposes.

This clarification helps property owners better understand and comply with the evolving short-term rental regulations, ensuring adherence to Greece's new tax and administrative framework.

While Airbnb has become a significant source of income for many property owners in Greece, the rising costs and limited availability of long-term housing, particularly for university students and teachers, have exacerbated the country's housing crisis. This move is part of broader efforts to balance the demands of the tourism sector with the need for affordable housing for residents.