Greece to tax and fine Airbnb-style vacation rentals, force landlords to register as business

Greece has apparently decided to follow the taxation model of the German city of Munich and will impose and cash tax from Airbnb-style rentals. The Finance and the Tourism Ministry are reportedly preparing a bill to tax peer-to-peer property rentals in unlicensed accommodation. Furthermore, fines will be impose to owners found to be renting out their property without a license and if they don’t fulfill certain criteria.

In clear world words:

if I rent my apartment for 3-5 or even 10 nights per year for 20 euro/night, total gross income 60 to 100 euro or even 200 euro, not only I will be taxed to save the country from the plague of missing bailout targets. (Average Airbnb prices in €12-€50 in Athens very much depending on location, no extra charge for utilities use).

I will also have to spend days, weeks and – knowing the Greek bureaucracy – probably also months to obtain a license that has very good chance to prove to be a total waste of time when I’ll find out that my potential customers do not like my apartment or the area it is located.

And to crack down any slight move to earn a little extra something, I will have to register the room or the apartment in the Short-Term Lease Property Register. And bear all the consequences of running a business in Greece like prepaid taxes and social security contributions, for a business that is not a business.

And of course, I won’t be able to provide other service than bedding. Not even a breakfast to my “guests” who will stay for 1 or 2 nights because apparently I will harm the local economy of bakers, cafeterias and groceries.

I suppose, if I rent just one room in my apartment, I will send my guests next morning to buy their breakfast, and possibly also lunch and dinner, while I will enjoy my coffee, cereals, Greek salad, moussaka, tzatziki and chicken souvlaki  on the balcony.

According to Kathimerini that saw the first draft of the legislative proposal that fines to be imposed on owners found to be renting out their property without a license from the Greek National Tourism Organization and without satisfying the following six conditions:

– The landlord must be a taxpayer registered with the Short-Term Lease Property Register at the Finance Ministry’s General Secretariat for Public Revenue.

– A taxpayer cannot rent out more than four properties.

– The property leased must have a minimum area of 9 square meters and have natural light, windows and heating.

– Properties must have all the necessary building permits or be maintained in accordance with legislation on old buildings.

– Each property can only be leased for up to 90 days per year.

– Properties must be rented fully furnished, without the supply of any services except for bedding.

Any short-term leases that do not fulfill all of the above requirements will only be considered legitimate if they concern tourism accommodation of any form bearing the GNTO sign.

The tax will be imposed on the short-term lease of the property per overnight stay as a percentage rate of its value. At the moment the two ministries are in consultations regarding the level of the percentage rate and any fine-tuning to the bill.

The tax will be withheld during the transaction (online or not) by taxpayers and online platforms and will be paid to the tax authorities every quarter no later than the 16th of April, July, October and January of every year, concerning the previous quarter.

The Greek Tourism Ministry estimates the tax evasion in the home sharing market to be worth up to 300 million euros on an annual basis. And I understand that it is the Tourism Ministry that has initiated this action.

“The property leased must have a minimum area of 9 square meters and have natural light, windows and heating.” I want the Greek Tourism Ministry to locate rooms-to-let businesses with rooms with heating!

I’m really curious how the Greek members of the Airbnb will react to this and much to my knowledge they do not have a lobby or something.

BTW: Just a couple of weeks ago, it was the city of Munich, Germany that decided to impose tax on the Airbnb rentals.

PS I would be very mean if I suggest which interest group has pushed for such an law, so I don’t. But what I see becoming a common practice here though, is that the moment a common citizen makes a 45-degree turn, he faces taxes and fines. While those  acrobats talented in 180- and 360-degree looping in form of business tax evasion continue to unfold their skills without problem.

But making an offer online is much easier to locate via the vacation-rental platforms than going door-to-door to shops, offices and other tax evaders.