Greece Amends Tax Law to Encourage Long-Term Leasing, Introduces Stricter Rules for Airbnb Rentals

The Greek Ministry of Economy and Finance has announced amendments to a draft tax law, aiming to promote long-term property leasing and address housing shortages.

Key changes include reducing the required time for short-term leases to convert to long-term leases for a tax exemption and implementing stricter regulations on Airbnb rentals in central Athens.

Short-term to long-term leasing: Tax incentive

Under the amendment, property owners who have leased their properties on short-term rental platforms for at least one year can now qualify for a three-year income tax exemption by converting them into long-term leases. Previously, the provision required a minimum of three years of short-term leasing before transitioning to long-term rental agreements.

This change, included in the draft tax bill set for parliamentary debate on Wednesday, seeks to encourage Airbnb owners to shift their properties to long-term rentals. Ministry officials believe the measure will increase the number of properties available for long-term leasing, alleviating pressure on the rental market.

1-year short-term rental ban in central Athens

In a separate provision, new short-term rental registrations will be banned in three municipal districts in the center of Athens from January 1, 2025, to December 31, 2025. This restriction applies to properties located in the following neighborhoods:

– 1st Municipal District: Plaka, Kolonaki, Koukaki, Syntagma, Omonia, Monastiraki, Exarchia, Ilisia, Neapoli
– 2nd Municipal District: Mets, Neos Kosmos, Agios Artemios, Pagrati
– 3rd Municipal District: Votanikos, Metaxourgeio, Gazi, Petralona, Rouf

Property owners planning to register short-term rentals in these areas must do so before the end of 2024.

Non-compliance will result in a fine of at least 20,000 euros or 50 percent of the income generated from short-term rentals after January 1, 2025, whichever is higher.

Increased climate resilience fee for Airbnbs

The new tax law also introduces higher climate resilience fees for all types of tourism accommodations, including short-term rental properties. Starting in 2025, the revised fees for short-term rentals will be:

– April to October: 8 euros per day (up from 1.50 euros).
– November to March: 2 euros per day (up from 0.50 euros).

Despite strong opposition from property owner associations, the Ministry of Economy and Finance has confirmed that the planned climate resilience fee increase will proceed without changes.

The draft tax bill, which includes these amendments, will be presented to the Greek Parliament’s plenary session on Wednesday for discussion and approval.