First, the Ministry of the Environment is preparing a legislative regulation, which will give municipalities the authority to determine the regulatory parameters of the operation of the short-term rental market. The municipalities, following data documented by studies, which will co-evaluate parameters such as the carrying capacity of their areas of responsibility, the housing needs of public officials – such as teachers and doctors -, workers in tourism and other activities of the areas in question, the adequacy of the infrastructure, but also the preservation of the special character of their individual neighborhoods, will be able to set limits on the number of properties that can be made available at any time through electronic platforms for short-term rental.
Secondly, the government will proceed in parallel with the legislative intervention of the Ministry of Finance and the differentiation of the tax treatment of natural and legal persons active in this market, depending on whether they are micro-owners with one or two properties or professionals who have to short-term rentals a significant number of properties.
XEE’S DAILY AND GRANT THORNTON’S STUDY
Under the title “Short-term Rentals: Effects on Cities and Citizens”, a day was held on Monday, November 14, 2022, which included the presentation of a relevant study by Grant Thornton and two thematic discussion panels, with the participation of speakers from Greece and abroad.
The Minister of Tourism Vassilis Kikilias, the Head of Tourism of SYRIZA Katerina Notopoulou and the Mayor of Athens Kostas Bakoyiannis addressed the conference.
From the main findings of the Grant Thornton study, the following stand out:
– The tourism expenditure of the sharing economy is growing at a strong rate, 15% per year. In 2022, it reached 14% of total tourism expenditure, a size that cannot remain without a regulatory framework.
– The average price of short-term rentals is 5 times higher than that of long-term rentals, creating strong incentives for landlords to put their properties on the short-term market, creating acute housing problems.
– Short-term rentals create significant losses in public revenue due to the way they are taxed. In 2016, public revenue losses reached 160.6 million euros. In 2022, the estimate for public revenue losses amounts to 316.7 million euros. In other words, a doubling of the net losses of public revenue during the period 2019-2022.
– Short-term leases deprive the creation of additional 39,000 jobs on an annual basis.
XEE’S PACKAGE OF PROPOSALS
Concluding the work of the day, the President of XEE Alexandros Vassilikos presented set of proposals for regulating the activity on 7 axes of intervention.
Details:
– Time limitations
Establishment of a ceiling of 90 days per year, for the whole country
– Spatial restrictions
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The horizontal limit of 90 days to be reduced to 60 in cases such as islands with less than 10,000 inhabitants or in areas with low average occupancy of the main hotel accommodations. Also by decision of the Municipality not to allow the registration of new properties located in demarcated parts of urban centers in the Register of Short-Term Accommodation Properties, when it is established that the residences for short-term rental exceed 50% of the residences that are owned or leased for long-term rental.
– Limit on the number of properties per landlord/subtenant
Maximum of two properties per landlord/ sublessor, who is a natural person and not a legal entity. The legal entity will be considered a professional when it undertakes a short-term lease.
– Establishment of minimum technical and operational specifications
There should be provision, among other things, for an area of at least 10 sq.m. for the room and 18 sq.m. for the apartment, to have natural lighting, ventilation and heating, with a maximum number of rooms (10 rooms), with hygiene and fire safety certification, with civil liability insurance and the obligation to comply with special health protocols, when there are reasons such as in the case of the pandemic.
– Taxation
Proposed accommodation fees of transients in favor of OTAs, cleaning fees and accommodation tax. It is important to provide for a higher income tax for short-term rentals compared to long-term rentals and the imposition of VAT for properties that are available for tourist accommodation for more than 3 consecutive years.
– Rights of the co-owners
Obligation to inform the co-owners about the availability of the property for short-term rental and an increase in common users by 25%. It is important that a decision be taken by the General Assembly of the owners (51% of the shares) of the apartment building/complex/holiday settlement whether short-term leasing will be allowed in the said properties and/or determining the maximum number of homes that can be made available for short-term accommodation.
– Implementation of a system of checks and sanctions.
Implementation of a system of control of complaints against the owner of short-term property accommodation on behalf of co-owners and customers, with stricter penalties and fines.
STATEMENTS
The Minister of Tourism Vassilis Kikilias made the following statement:
“Short-term rentals are part of our tourism product. For the proper functioning of healthy competition, but also for the proper functioning of our urban centers, the government is working on a framework for the short-term rental market. This framework will separate those who rent out mass properties versus the majority who rent out one or two properties.”
Syriza’s Head of Tourism Katerina Notopoulou made the following statement :
“Today we are at an important meeting of the Hotel Chamber of Greece, which highlights an agenda with quick reflexes. We face a housing crisis, rising rents and unfair competition at the same time. Now is the time to set the framework for short-term rentals. This requires political will but at the same time multi-level knowledge of the phenomenon, so that fair and spatially determined rules can be introduced.”.
In his speech, the Mayor of Athens, Kostas Bakoyannis emphasized that there should be cooperation of all competent bodies, so that the foundations for medium-term and long-term planning regarding short-term leases are laid:
“Yes agree on three things. Number one: Regulatory framework is required, there should be rules. Number two: This regulatory framework should be the competence and responsibility of the Local Government. It would be very easy politically to “push” the issue to the respective government. But, it is no coincidence that in most of the big cities on the planet – to be precise, in all but one – the responsibility and competence rests with the municipality. Number three: To get away from the logic of horizontal solutions and horizontal policies. The opposite. Instead of working from the top down, let’s work from the bottom up, i.e. neighborhood – neighborhood”.
XEE President Alexandros Vassilikos made the following statement :
“We highlighted in an authoritative and documented way, as we always do in XEE, the serious social effects of the uncontrolled landscape of short-term rentals. Ten years after the XEE first opened the issue, the phenomenon has grown in a gray zone, without rules, without controls, without certifications, with “black work” and shadow economy practices. The results are visible to the naked eye. Soaring rents for families, doctors leaving the islands because they can’t find a home, professors and teachers sleeping in cars. Whole areas are losing their character and character, while the permanent residents experience insecurity every day, since no one controls anyone. We are too late in dealing with the phenomenon compared to the rest of Europe and the social costs are becoming really unbearable for the citizens. There is no scope for prolonging this situation. The immediate intervention of the State is imperative for a fair regulation of short-term leases, with sensitivity towards the needs of society and citizens.”
Read the entire relevant study of Grant Thornton
