New Measures on Short-Term Rentals Announced by Greek Prime Minister at TIF

Prime Minister Kyriakos Mitsotakis during his briefing at the TIF. Photo source: Prime Minister press office

Greek Prime Minister Kyriakos Mitsotakis announced a series of new measures to regulate short-term rentals in Greece during his keynote speech at the Thessaloniki International Fair on September 8th, 2024.

The measures are aimed at striking a balance between maintaining the character of neighborhoods and addressing housing availability, without undermining the growing short-term rental market.

The Prime Minister emphasized that the government has no intention of demonizing the short-term rental business, which he acknowledged as a significant revenue source for both property owners and the state and a significant driver of Greek tourism in recent years.

The new announced regulations aim to address the housing crisis, enhance control over the sector, and preserve the unique character of Greek cities and Athens’ neighborhoods.

“It’s a comprehensive set of measures designed to ease rent pressures and increase housing availability,” Mitsotakis stressed.

Athens Photo: GTP

The key measures announced include:

– Tax incentives for long-term rentals: Property owners who convert short-term rentals into long-term leases or bring previously closed apartments onto the rental market will be exempt from rent tax for three years. This is aimed at encouraging more properties to be offered as long-term rental options, addressing the housing shortage in key areas.

– Increased taxes for short-term rentals: Conversely, new regulations will introduce increased taxes on short-term rental contracts through platforms like Airbnb. The specifics of these tax increases will be outlined by the Finance Ministry in the coming days.

– Ban on new short-term leases in Central Athens: New short-term rental agreements will be prohibited for at least a year in three central districts of Athens, as a measure to preserve the character of these neighborhoods and prevent housing displacement due to high demand for tourist rentals. He noted that the ban could extend to other high-demand areas of the capital.

The Prime Minister underscored that while short-term rentals provide flexibility for property owners, the government must intervene where this activity threatens the balance of local housing markets.

“The character of our districts must not be altered, nor should the right to profit of one person prevent the right to housing of another,” he said, adding that the Ministry of Housing will closely monitor rental trends in districts where similar problems may arise.

In a press conference following his speech, Prime Minister Mitsotakis further clarified the government’s stance on short-term rentals. He reiterated that the state does not seek to demonize business activities like Airbnb but emphasized that targeted interventions are necessary where demand for short-term rentals creates housing shortages and price inflation.

He also acknowledged that the real estate market is heavily influenced by supply and demand. “Rents are rising simply because there is more demand than supply,” he noted, stressing the importance of increasing the availability of long-term rental properties to ease rent inflation.

Regarding the broader challenge of regulating short-term rentals, the Prime Minister pointed out that Greece is not alone in facing this issue.

“Many cities and countries are struggling with how to regulate the short-term rental market. We are taking some important first steps in that direction. If we think more are needed, we will not hesitate to do them.”

Photo: GTP

These announcements mark the government’s initial steps toward more stringent regulations in the short-term rental market, with further details expected from the Finance Ministry in the coming days.

Following the Prime Minister’s speech and press conference, the Hellenic Hoteliers Federation (HHF) expressed concern, stating that the new regulations fail to narrow the gap between hotels and short-term rentals.

“There is no significant change in short-term rentals, as no meaningful restrictions were introduced in the proposals at TIF, despite the considerable social impact on citizens,” said the federation’s presiden Yiannis Hatzis.

Organized by TIF-Helexpo, the Thessaloniki International Fair is an annual event held since 1936. Traditionally, the Greek Prime Minister uses this platform to announce new measures addressing key social and economic issues.

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