The rapid rise in Greek tourism arrivals has been accompanied by a major increase among Greek apartment and villa owners listing their properties on Airbnb. This has prompted the Greek government to take action, given the role hotels play in the Greek tourism market, and the difference in taxation, safety regulations and other issues between different tourism hosting providers.
In previous years, the Government required Airbnb owners or managers to register their Airbnb-hosted apartment. According to the Independent Authority for Public Revenue (AADE), between 01.01.2018 and 30.01.2019:
51,513 property units were registered
The rental turnover from these units reached € 186,000,000
The comparable rental turnover from 2017 was € 62,000,000
According to a separate study by the Centre for Planning and Economic Research (KEPE), a total of 126,000 units have been registered on different platforms (Airbnb, HomeAway, Booking.com and others).
The priority remains to provide a complete and transparent registration of all such units on the market and the revenue that accrues from them. According to Greek Travel Pages:
Tourism Minister Harry Theoharis and Economy Minister Christos Staikouras are expected to meet with Prime Minister Kyriakos Mitsotakis and Secretary General of Public Revenue (AADE) Giorgos Pitsilis in the coming week to finalize the legal framework covering the short term rental market.
Owners promoting their properties in Greece on home sharing sites such as Airbnb, Booking.com, and HomeAway may have to face added taxes in 2020. This is part of an attempt by the Greek Tourism and Finance ministries to stop tax evasion while increasing the state treasury by at least € 60 million in lost revenue.
Taxpayers who own property in Greece will be now required to collect e-receipts for 30% of their income, and will be taxed at maximum rates up to 45%. In addition, hosts will be obliged to be registered with AADE (Independent Authority for Public Revenue) and receive a registry number or else they will be banned from home sharing sites.
The new audit and tax scheme includes:
E-receipts: Taxpayers earning income from Greek real estate will be required to cover 30% of their income by e-receipt and with a maximum ceiling of € 20,000. Those who fail to meet the Ministry of Economy’s target will be penalized with a 22% tax, which will be imposed on the amount of the missing receipts.
Income tax up to 45%: Taxpayers who earn income exclusively from Greek rents will not qualify for tax relief in 2020. Rents they receive will be taxed at rates ranging from 15% to 45%, with those earning more than € 12,000 plus a special solidarity levy of 2.5% to 10%.
New living prescriptions: The prescriptions will be replaced by a new system of identifying real taxpayers' income. This system will be based on indirect control techniques, electronic invoices and mandatory e-book keeping by Greek freelancers, self-employed and businesses.
Tax deduction for repair costs: Owners who repair or renovate Greek properties that are uploaded to the Airbnb platform or other platform will receive a tax deduction. Up to 40% of renovation work will be deducted from the next four years' income tax debt. There will be a € 48,000 threshold for expenditure, with a maximum deduction of € 19,200. The incentive will be valid for a period of three years (from 1-1-2020 to 31-12-2022), but those who use it will lose the known fixed, automatic and no-deductible 5% deduction from all their taxable income, up to a full seven years, that is until 31-12-2026.
Ban from online platforms: Those who hide their properties from the EADE Electronic Registry will be expelled from the electronic platforms.
To put things into perspective, according to the Greek Property Managers Association (PASIDA) of the approximately 90,000 listed properties on Airbnb, 30,000 do not have the mandatory AADE registry number. All owners renting out properties on home sharing platforms in Greece are required by Greek law to declare earned incomes from short-term lease on their tax forms.
NavInvest Greece supports hotel and tourism accommodation investments in Greece, and has extensive experience in due diligence on tourism and property investments. Please contact us for more information relating to hotel and property investments in Greece.
Greek Travel Pages, 18 November 2019
Ta Nea Greece, 17 November 2019
TheTOC, 31 March 2109