Greek Policymakers to Examine Measures for Airbnb-style Rentals

After ongoing calls by hoteliers, the Greek government will be examining a new set of measures aimed at regulating the ballooning short-term rental market.

According to local media reports, Greek policymakers will start talks with stakeholders from scratch despite having repeatedly announced intentions to implement rules earlier.

Late last year, associations representing tourism and relevant sectors in Europe were eagerly waiting for the European Commission to announce a regulatory framework for short-term rentals. The associations as well as relevant bodies in Greece have repeatedly called for the immediate regulation of short-term rentals, which they say, are still “largely uncontrolled and unregulated” creating unfair market conditions.

In spring 2022, the Greek Tourism Confederation (SETE), proposed VAT, a special municipal tax, a property cap and rental time limits as part of a set of rules to that will regulate Airbnb-style activities, which they said, were distorting healthy market competition.

In May this year, for the first time in Greece, short-term rental operators sat down at the same table with the country’s Independent Authority for Public Revenue (AADE) to discuss best practices and market conditions.

It should be noted that AADE and short-term rental operators Airbnb, Booking.com and VRBO have signed a Memorandum of Understanding (MoU) for compliance to local tax laws.

At the same time, Greece’s property owners and short-term rentals hosts reiterated their call to the government to re-examine proposed legislation aimed at regulating Airbnb-style accommodation and to include incentives for long-terms rentals. Additionally, they have presented “truths” with regard to short-term rentals aimed at clarifying misunderstandings or misconstrued data.

Looking ahead, the government is expected among others to set limits to the number of properties that can be listed for short-term rental as well as a set a defined period for rental activity.

Additionally, individual hosts and managing companies will have different operational rules and will be taxed differently. Sources say managing companies may be required to operate under a special license and be taxed like hotel operations, which means including VAT and a stayover tax to the going rate.

In efforts to address the issue of unregulated short-term rental activity in urban areas, municipal authorities may be granted the right to decide on rules based on carrying capacity.

Indicatively, according to joint ministerial decision, geographical areas may be defined, where restrictions will apply to the availability of Airbnb-style rentals as part of efforts to protect long-term residence and the gentrification of neighborhoods.

According to Greek law, earnings from rental activity of any real estate property – apartment, house, rooms in apartments or detached houses –  is considered taxable income. Under the law, Greek tax authorities can request online platforms to provide information concerning hosts who list their properties on the platforms. Online platforms will report this information to local tax authorities at the end of February every year.

On top of that, as of 2025, a new European Commission VAT regulation is expected to increase short-term rental prices by as much as 20 percent.

On average,  short-term rental activity in Greece generates 3.3 billion euros annually but at the same time is causing the state to lose millions in tax revenue.