The government’s economic staff seems to be making more targeted and mild interventions in terms of short-term real estate leasing, with Kyriakos Mitsotakis making the announcements at the Thessaloniki International Fair (TIF) on the weekend of 7-8 September 2024.
The announcements are part of the measures the government is trying to take in order to alleviate the housing problem.
At the same time, however, the contribution of short-term rentals to both tourism and public revenues seems to be recognised.
Counting of properties on short-term lease
The recording of short-term rentals in Greece by the Independent Authority for Public Revenue (AADE) has given a clearer picture of the extent of the phenomenon.
In a property stock of up to 10 million properties across the country, it is estimated that around 100,000 properties are rented through short-term rental platforms.
Most of these rentals are made by individuals and are for periods of no more than 90 days per year.
These figures give the government the necessary basis to proceed with a more targeted action plan, rejecting suggestions for across-the-board measures such as a cap on rental days for all properties.
What restrictions will be announced at TIF 2024 on short-term rentals
One of the key measures expected to be announced at TIF 2024 is the imposition of temporary restrictions on short-term rentals in specific, saturated areas.
These areas, such as Koukaki in central Athens, the coastal zone of the southern suburbs and areas of Thessaloniki, show a high concentration of short-term leases, exceeding 5% of the total stock of properties for lease.
In these areas a new ratio between short-term and long-term leases will be applied.
If the ratio is skewed against long-term leases, the issue of new short-term leases will be stopped, in the form of a ‘freeze’ on the issue of a Property Registration Number (PRN).
This measure will be applied precisely at a postcode level rather than across whole boroughs, giving a more targeted and flexible approach.
Incentives for return to long-term rental
In addition to restrictions on short-term leases, the government plans to incentivise the disposal of closed properties for long-term leasing.
In Greece, about 700,000 properties, of which 200,000 are located in urban centres, appear as closed in the ADSE’s records.
For the owners of these properties, it is planned to offer tax incentives, such as a three-year income tax exemption, if these properties are made available for long-term rental as main residences for at least three years.
This is essentially the proposal that POMIDA has made. This incentive could be extended to properties that are withdrawn from short-term rental platforms and converted to traditional leases. Although the government may consider a partial rather than full tax exemption, this proposal appears to have already received positive acceptance, with the aim of avoiding opposition from other groups in society.
Alternative scenarios and perspectives
Finally, discussions on disincentives, such as additional tax charges for closed apartments, have been suspended for the time being.
These measures can only be considered as penalties for cases where a landlord has taken advantage of tax reliefs without making the property available for long-term rental for the full period envisaged.
The new measures, as expected to be announced at TIF 2024, demonstrate the government’s intention to deal with short-term renting in a flexible and targeted way, with the aim of rebalancing the property market and addressing the housing problem in saturated areas of the country.
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