In efforts to tackle illegitimate home rentals, stem the practice which appears to be taking a bite out of the accommodation business and bring in much-needed cash to state coffers, the Greek finance ministry is considering taxing short-term leases by 5 percent.
As reported in Greek financial daily Naftemporiki, which cites a ministry agenda presented by outgoing Alternate Finance Minister Tryfon Alexiadis on Monday, the ministry plan foresees the introduction of a 5 percent short-term hiring tax on the value of the provided overnight services, as well as the inclusion of the collected rents under the currently applicable property taxation with rates ranging from 15 percent to 45 percent.
The plan aims to address tax evasion and at the same time ensure fair competition in the hotel sector while bringing in tax revenue to the tune of some 250 million euros per year. Shadow hospitality accounts for approximately 1.4 billion euros per year with studies finding that it has replaced standard accommodation by as much as 70 percent leading to lost jobs in the hotel sector.
The ministry’s plan also includes the creation of a home e-rental registry which will provide all properties and their owners with a special ID; collaboration with online rental platforms for the provision of information to Greek tax authorities; the execution of audits to ensure compliance and the imposition of hefty fines of up to 50,000 euros for violations.