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Tax changes for Airbnb owners; accommodation fee increase

Property owners who operate three or more Airbnb-type properties will be called to have closer contacts with Greece’s tax office, Prime Minister Kyriakos Mitsotakis announced on Saturday. At the same time the PM announced also an increase in the accommodation fee in order to cover up costs for damages caused by the floods in central Greece.

Owners who obtain income from the short-term rental of at least 3 properties become entrepreneurs and will have to open books at the Tax Office.

From January 1, 2024, the income from short-term rental of 3 or more properties will be subject to Value Added Tax as well as to the fees applicable to hotels and rooms for rent.

This means that the owners who obtain income from the short-term rental Airbnb of at least 3 properties become entrepreneurs and will have to open books at the Tax Office, set up a company, hire an accountant to submit VAT returns, enter income – expenses in myDATA, pay in public VAT and the other fees currently paid by hotels and rooms for rent, such as the accommodation fee.

Accommodation Fee

Note that from 1. January 2024, the accommodation fee will increased from  0.50 to 4 euros currently to 1 to 6 or even 10 euros with the aim of increasing the special reserve to 600 euros for dealing with the consequences of natural disasters, such as the floods in Thessaly.

the accommodation fee is implemented in all types of accommodations such as in hotels, rooms to rent etc.

What is the reality today

Owners (natural persons) who rent properties through Airbnb-type platforms are exempt from VAT and the income they obtain from the short-term rental of properties is taxed independently at the following rates:

  • – 15% for annual income up to 12,000 euros,
  • – 35% for the income range from 12,001 to 35,000 euros and
  • – 45% for rents over 35,000 euros.

According to the current legislation, short-term real estate leases in the context of the sharing economy are exempt from VAT, provided that during the lease no additional services are provided by the lessor to the lessees, comparable to those provided in the hotel or similar sector , such as cleaning services, waste collection, replacement of bed linen and other household items, auxiliary staff and other services for customer care.

The simple provision of bed linen is not considered as an additional provision of service according to the above, therefore it has no influence on the exemption from VAT.

Similarly, the fact that the value of the lease also includes other utilities, such as electricity, water, telephone, internet and communal costs, which are charged to the lessor and then passed on to the lessee, is not an additional provision of services in the above sense and therefore also the application of the exemption is not affected.

It is self-evident that in this context no right is granted to deduct the VAT charged on the above expenses of the lessor or other related to the property (such as for repair or maintenance work of the property).

For the sake of equal treatment, short-term real estate leases are also exempt from VAT which are carried out under the conditions mentioned in the previous paragraph for short-term real estate leases in the context of the sharing economy, but are not carried out through digital platforms, as the use or non-use of internet is not a criterion for applying the VAT exemption.

The exemption from VAT applies to both natural and legal persons who carry out these leases, noting that natural persons who carry out exempt real estate leases are exempted from the obligation to start work in order to obtain VAT/VAT and only for the these acts, while legal entities are obliged to start operations.

In the event, however, that during the short-term rental of the Airbnb property (within or outside the framework of the sharing economy) additional services are provided by the lessor for the care of customers, which are equivalent to those provided to the hotelier or similar sector, the total consideration paid is not exempt, but is subject to VAT, as it is considered to be the provision of accommodation services, which are subject to the reduced rate of VAT (13%), with the right to deduct the VAT of the relevant costs.

source: in.gr

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