Short-term Rentals to Pay New Tax to Municipalities from 2024

The Greek Finance Ministry has published a ministerial decision regarding the imposition of a new tax on short-term rentals as part of efforts to ensure fair market conditions.

The tax requirement, which is a municipal duty in favor of the municipalities (known in Greek as “τέλος διαμονής παρεπιδημούντων”) where the short-term rental properties are located, was published in the Government Gazette (FEK) as was a new tax on gross income for restaurants, night clubs and entertainment venues in Greece.

Commenting on the decision, Deputy Finance Minister Harry Theoharis said it was a “necessary step” towards the modernization and rationalization of the relevant legal framework.

The municipal duty comes to 0.5 percent of gross income generated from renting out Airbnb-style properties for tourist accommodation purposes. It is noted that until now only tourism businesses (hotels, rooms to let) had the liability to pay the municipal duty in favor of municipalities.

The decision outlines details of the taxes and ways these will be collected. Once gathered, revenues will be distributed to the municipalities where the enterprises are located within a period of up to 30 days.

It should be noted, that if properties (Airbnbs) are located in different municipalities, then operators will be required to declare these separately with corresponding charges calculated per municipality.

Professionals who are obliged under the decision to pay taxes will have to first submit a digital application to Greece’s Independent Authority for Public Revenue (AADE). They will then be issued a tax dues number.

“After a series of adjustments and modifications, the two levies – the municipal duty and the tax on gross income – are defined with complete clarity. The modernization and rationalization of the framework was absolutely necessary for the proper functioning of the system and the consolidation of the law,” he said.

Detailed information on the municipal duty charged on owners of properties rented for the short-term can be found here (in Greek).

The municipal duty is among the taxes charged on Airbnb-style accommodation as foreseen in a new law approved in parliament in early December.

The finance ministry has said that the new rules will to go into effect on January 1, 2024.