New Tourism Law Threatens Greece’s Thriving Short-term Rental Market

Photo source: Airbnb

The Greek government is facing backlash from the Short-Term Accommodation Managers Association (STAMA Greece) over a proposed provision in the Tourism Ministry’s draft legislation, which threatens to disrupt Greece’s thriving short-term rental market. The provision, outlined in Article 3 of the draft law, excludes properties that changed their use after 2011 from being eligible for short-term rental.

STAMA, which represents a significant segment of Greece’s short-term accommodation sector, has expressed its strong opposition to this measure, warning of severe economic, social, and urban consequences if it is enacted.

A controversial provision

The provision mandates that properties rented for short-term use must be designated as “primary residential spaces” under Greek law, or their change of use must have been legalized by July 28, 2011. This effectively excludes properties that were converted after this date, including many office buildings and industrial spaces in urban centers that were repurposed into short-term rentals.

STAMA argues that this measure is both “discriminatory” and “impractical,” as it “punishes” property owners and investors who acted within the legal framework to revitalize disused spaces.

STAMA’s objections

In its letter to Greek Prime Minister Kyriakos Mitsotakis and relevant ministries, STAMA raised several significant objections to the proposed provision.

First, the association contends that the provision violates Article 5 of the Greek Constitution, which guarantees economic and professional freedom. By retroactively restricting the use of properties, the legislation undermines investments that were lawful under the existing legal framework.

The economic fallout from the measure is also a major concern. STAMA notes that millions of euros have been invested in upgrading properties for short-term rental purposes. If these properties are disqualified, their value will plummet, leading to substantial financial losses for their owners.

Moreover, according to STAMA, the provision is likely to reduce state tax revenues and discourage future investments in Greece’s real estate and tourism sectors, further exacerbating its economic impact.

Additionally, the association highlights the urban and social consequences of the proposed law. As STAMA points out, many of the affected properties are located in previously abandoned or degraded areas and have played a vital role in urban revitalization. The provision threatens to reverse this progress, leaving these spaces vacant once more and undermining efforts to rejuvenate these neighborhoods.

Practical challenges

Photo source: Airbnb

STAMA underlines that there are significant practical challenges posed by the provision. Properties that have been specifically designed for short-term rentals often cannot be repurposed as conventional residences due to their layout and amenities.

“Excluding them from short-term rental platforms would render them practically unusable, wasting the investments made in their development and further limiting their potential use,” the association highlighted.

STAMA’s proposals

Rather than imposing retroactive restrictions, STAMA recommends maintaining the existing framework for all legally licensed properties. The association also suggests creating incentives for further upgrades to Greece’s building stock and establishing a collaborative framework between the state and the short-term rental sector.

STAMA emphasizes that short-term rentals play a “crucial role” in Greece’s tourism ecosystem, attracting millions of visitors annually and contributing significantly to the economy. “Penalizing property owners who have invested in this sector would be a step backward,” the association said, adding that if the provision is enacted, thousands of properties could be forced off rental platforms such as Airbnb.

Photo source: Airbnb

A call for dialogue

In its letter, STAMA urges the government to reconsider the provision and engage in a constructive dialogue with stakeholders. The association believes that fair and inclusive policies can address any concerns about short-term rentals while preserving their benefits for Greece’s economy and urban landscapes.

Greece’s draft tourism bill is currently under public consultation until December 19.