New Regulations on Short-Term Rentals and the Golden Visa in Greece

The Greek government has recently introduced new regulations to tackle the issue of unaffordable housing. From changes to the golden visa program to new restrictions on short-term rentals, here is a breakdown of what you need to know.

The Airbnb Boom in Greece

In recent years, the popularity of Airbnb has surged across Greece. According to Agrophilia, there were 653,000 available Airbnb beds nationwide in 2019. Rhodes alone saw a 67% increase in rental properties during this period. By 2023, the number of available beds had risen to 962,000, with Crete, the Cyclades, and the Ionian Islands seeing the most significant growth. The average rental price jumped from €122 in 2019 to €191 in 2023, reflecting a 57% increase.

While short-term rentals have provided a strong boost to the Greek economy, critics argue that this growth has exacerbated the issue of housing affordability for local residents.

New Regulations for Short-Term Rentals

To address the issue, the Greek government has introduced a series of measures at the start of 2023:

• Accommodation Fee: If you rent out one or two properties, you will be required to pay a fee of €1.50 per booking.
• Classification of Business Activity: Renting out three or more properties is now considered a business activity, requiring the owner to pay 13% VAT along with taxes and fees similar to those imposed on hoteliers.
• Long-Term Rentals: Stays longer than 30 days can no longer be booked through Airbnb and are classified as long-term rentals.

The government has emphasized that these regulations are designed to target those who have turned short-term rentals into large-scale commercial ventures, not individuals renting out one or two homes for extra income.

Potential Future Initiatives

Additional regulations and initiatives are also under consideration, including:

• Two-Tier Tax System: Offering tax deductions for long-term rentals while imposing higher taxes on short-term rentals.
• Rental Duration Limits: Limiting short-term rental leases to 90 days per year (60 days for islands with fewer than 10,000 residents). However, exceptions may apply if the annual income from the rental is under €12,000.
• Local Authority Powers: Granting local governments more authority to regulate short-term rentals as they see fit.

Changes to the Golden Visa Program

Greeces golden visa program, which allows non-EU nationals to obtain residency by purchasing property, has undergone significant changes. This program became particularly popular after Brexit, as British citizens could only spend 90 days within the Schengen Area without a visa. The golden visa allows for more extended stays and free movement within the Schengen Area.

Although several countries have implemented golden visa programs, many, such as Portugal and Spain, have made substantial changes or discontinued them altogether. Greeces golden visa was especially appealing due to its relatively low investment requirement of €250,000. However, last year the minimum investment was raised to €500,000 in high-demand areas like Attica, Mykonos, Santorini, and Thessaloniki. Starting in late August, this minimum increased further to €800,000 in these regions. Elsewhere in Greece, the minimum will rise from €250,000 to €400,000, depending on the areas housing demand and population size.

Additionally, properties purchased under the golden visa scheme will no longer be eligible for short-term rental use.

What These Changes Mean for Prospective Buyers

If you are considering investing in Greek property, heres what you should keep in mind:

Act Quickly

If you are aiming to secure a Greek golden visa under the minimum spend requirements of €500,000, time is running out. You have until the end of September to put down a 10% deposit on a property and finalize the purchase by the end of 2024. Over the past year, the number of British residents holding Greek residence permits has increased by 58%.

Explore Alternative Locations

If the increased minimum investment in popular destinations like Mykonos is too steep, consider purchasing property on one of Greeces lesser-known islands. There are 227 inhabited islands in Greece, many of which still offer lower property prices that qualify for the golden visa.

Look Into Other Visa Options

Depending on your circumstances, Greece offers various other visa options. If you work remotely for an overseas company, the digital nomad visa might be a good fit. Alternatively, retirees might find the non-lucrative visa more suitable for their needs.

Consult with Professionals

If short-term rentals are part of your plans, it is important to stay informed about potential future restrictions. Consult with your estate agent and lawyer to ensure that your property plans are legally sound and compliant with the new regulations.

By taking these steps, you can navigate the evolving landscape of Greeces property market while making informed decisions.