To the Prime Minister Mr. Kyriakos Mitsotakis
The Minister of Finance Mr. Christos Staikouras
The Minister of Environment Mr. Kostas Skrekas
The Minister of Tourism, Mr. Vassilis Kikilia
The Governor of AADE, Mr. Giorgos Pitsilis strong>
There Athens, 17.11.2022
SUBJECT: No to unilateral short-term rental “strangulation” measures!!!
Dear Mr. President, Mr. Ministers, Governors
It is with real regret that we read in the press that the Government, under the suffocating pressure of the hotel industry,is preparing to legislate measures for the ” strike” an institutional pillar of our country’s tourism product, the short-term rental of real estate, imposing restrictions and tax burdens that will make it unsustainable.
Those preparing these measures, without bothering to consult the owners, would do well to take into account that the owners involved invested significant sums in their purchase, modernization and equipment, often with extensive bank borrowing. . At the same time, they upgraded entire neighborhoods in the center of Athens, with the buildings they renovated, with the shops they opened, giving life and value to citizens’ properties, which the Ministry of Finance recognized in practice, doubling their objective values in these areas!
In a study commissioned by hoteliers on the allegedly “nightmarish” consequences of short-term rentals, we read that they contribute 15% of tourism revenue . But here are some bitter truths that we did not see written in this study:
- The growth of short-term rental is global phenomenon. Its enormous utility to the economies and societies of tourist countries is disputed only by those with a vested interest in continuing to monopolize tourism revenues. The increase in the number of tourists in our country in recent years is literally due to the flourishing of this activity, in combination with the economic crisis, but also with the mediating possibilities of global electronic platforms!
- Short-term rental was not subsidized by the State neither during the creation of its infrastructure, nor during the Covid period, in contrast to the hotel industry which was boosted manifold with generous subsidies, low-interest loans, non-refundable advances, employee subsidies, consecutive debt settlements and heaps of other beneficial measures financed by the Greek taxpayers!
- The short-term rental today is owned and operated 100% by Greek hands, when the hotel business is increasingly being handed over to international chains and foreign interests!
- Short-term rental spreads its income to wider social groups, that is why it is also called the “sharing economy”, in contrast to a large part of the hotel industry that with “bracelets” in the hands of the “wanderers” tourists, she keeps them exclusively hers!
- Short-term rental is already taxed much more heavily, with a rate of up to 45% and without any deduction of expenses, in contrast to hotels which are taxed with 22% and with a discount of all its expenses!
- The short-term rental is obliged to declare its reservations until the 20th of the following month, in constant crossings and in heavy fines to the hosts and Property Managers, and Greece and AADE are in the vanguard of the mandatory use of AMA, while hotels and rental accommodation do not have such obligations!
- Short-term rental has flourished in our country in the 10sin old, empty and abandoned houses, apartments, offices and unfinished buildings. Unlike other countries and well-known tourist cities with saturated urban tissues, such as Barcelona, Amsterdam, Athens and other our cities, they had and still have, many tens of thousands of empty, uninhabited or unfinished buildings and old abandoned apartments or offices, which were offered for renovation and tourist exploitation. So many of them were renovated or finished and furnished for this use, and registered on the international platforms, without actually depriving the existing rental market of housing. Especially in many apartment buildings, abandoned ground floor and semi-basement apartments of 50 years or more were renovated, and the managers of the apartment buildings were happy after many years to collect utilities for these apartments again!
- The short-term rental is therefore not responsible for the reduction in the supply of rented main house roofs, but mainly the aging of the country’s building potential and the financial inability of the lessors to modernize it!
Regarding the measures being studied, we highlight the following:
*Restrictions on overnight stays will hit the country’s tourism product and push the successful ones into the shadow economy and tax evasion. This will reduce both the GDP of the country and the income (but also the taxes that will not be collected) of tens of thousands of small property owners who contribute in various ways in other areas such as building renovation, local business development, etc. It is therefore reasonable to wonder how the Ministry of Finance hopes to be able to compensate for all these lost revenues.
*The right of Municipalities to set a maximum percentage of homes for short-term rental could only make sense if vacant homes are also taken into account. However, the white handed delivery of the sector to the moods of some municipal authorities poses serious risks…
*The right of general meetings of apartment buildings to decide whether to allow short-term rental, when it is not prohibited by the regulation, will literally turn assemblies into “boxing rings”, which Greek society does not need…
*The non-imposition of VAT is not a Greek phenomenon but a generalized pan-European practice. However, we remind you that individuals and management companies do not deduct VAT from their expenses. Any enforcement of it will hit the product, but it will also give rise to tax refund rights.
*Municipal taxes in a clear legal regime will they could be fair, after discussing their kind and height. We are not opposed to this, but to the illegal retroactivity of their imposition. In the event that municipal taxation is legislated, changes the characterization of what is tourist accommodation and what is short-term rental, and has a specific entry into force, of course such a clear regulation will be applied seamlessly.
Mr. President, Mr. Ministers, Mr. Governor
The unilateral measures being prepared against the short-term lease it is clear from the above that they lead not to regulation, but to complete financial strangulation of property owners, their managers, employees and their families as well as suppliers, businessmen, shopkeepers and the local societies of our country. But also in a huge loss of public revenues, which will require the imposition of additional taxes at the expense of citizens.
So let’s all sit down at a table before it is slowly, for a regulation that will not unilaterally aim at the interests of the hoteliers but at the general interest of the country and its society, so that we all win, and first of all the tourism of our country!
At your disposal for any cooperation to this end!
The President of POMIDA The President of STAMA Stratos Paradias Nasos Gavalas >Lawyer A.P. – UIPI President Property Manager
