To address Greece’s housing crisis and boost property tax revenue, Greece has developed a new tax and rental framework for Airbnb units. Its Independent Authority for Public Revenue (AADE) recently released a guide to clarify the new rules for property owners.
Short-term vs Long-term Rentals
According to the guide, a rental is classified as short-term if it does not exceed 59 days, offers only basic services like linens, and is furnished. This limit applies to the duration of each lease, not the total number of rental days in a year.
Owners must also register their properties in the Short-Term Stay Property Registry, obtain a Property Registry Number (PRN), and file a Short-Term Stay Declaration for each lease.
Properties eligible for short-term rentals include apartments, detached houses, other standalone residential units, and rooms within these properties. Even when rooms are rented individually, each unit must have a separate PRN.
Rentals lasting 60 days or more are considered long-term and come with distinct tax obligations for owners.
Providing additional services like breakfast, cleaning, or transportation reclassifies the property as a tourist accommodation, subjecting it to a different tax and administrative regime. In such cases, the owner must register a business activity with AADE.
It is possible to use a property for both short-term and long-term rentals. In cases where a lease exceeds 59 days, a Long-Term Lease Declaration must be filed, while leases of 59 days or less require a Short-Term Stay Declaration.
For taxation purposes, income from up to two properties rented short-term without additional services is classified as property income. However, if an individual rents out three or more properties or offers additional services, the income is considered business income and requires VAT registration at a rate of 13%.
The guide emphasizes that the number of PRNs determines the count of properties an individual rents, with one exception: if a single property is partially rented, such as two separate rooms within one unit, this is counted as two properties. This clarification helps property owners understand and comply with the regulations governing short-term rentals, ensuring adherence to evolving tax and administrative requirements.
Airbnb has been a major source of income for owners in many areas of Greece. Still, the shortage of long-term housing supply for Greek citizens, especially for university students and educators, and the subsequent cost rise have resulted in a housing crisis.
