Prime Minister Kyriakos Mitsotakis made important announcements regarding short-term rentals during his speech at the Thessaloniki International Fair, underlining the government’s strategy towards this type of tourism activity.
The approach adopted by the government, according to the prime minister, does not include the “demonisation” of short-term rentals, which, he said, is an important source of revenue for both property owners and the public treasury.
The focus of his remarks was on restrictions on short-term rentals, with the prime minister explaining that the restrictions would only be imposed in certain areas of Athens.
Specifically, he announced a ban on new rentals in the three central districts of the capital (including areas such as Syntagma, Omonia, Metaxourgio, Koukaki, Plaka, Neos Kosmos and Petralona).
This restriction will last for one year, but will not affect accommodation already operating in these areas.
This decision came in response to pressure on the government from hoteliers, who have been calling for stricter regulations and restrictions on short-term rentals due to the pressure on infrastructure and the imbalance created in the tourism market.
However, the government opted for a moderate approach, avoiding a blanket ban or severe restrictions in other parts of the country.
The Prime Minister stressed that the government is closely monitoring the situation, especially the balance between short-term and long-term rentals, leaving open the possibility of future interventions if problems are identified in other areas.
He noted that “the relevant Ministry will monitor the rental balance in each area where we may have a similar problem”.
Also, no regulation was announced regarding the operational standards of Airbnb, as proposed by the Ministry of Tourism.
New end to short-term hiring
One of the most important announcements was the imposition of a new tax on short-term rental accommodation, but without giving further details on the amount or form of this new tax.
The implementation of the new tax is expected to boost government revenues, bringing more money to local communities affected by increased tourism.
This decision comes at a time when local communities, particularly in popular tourist destinations, are facing serious challenges due to strong demand and pressure on infrastructure.
The Prime Minister noted that the revenue from the new fee will help improve this infrastructure and strengthen the resilience of the regions to the climate crisis.
Incentives for conversion to long-term leases
In an attempt to address the increased demand for rental properties, which has soared due to the popularity of short-term rentals, the government is introducing incentives for landlords.
Landlords who own closed properties or use their properties for short-term rentals will be able to convert them to long-term rentals without incurring rent tax for three years. This measure aims to increase the supply of properties for long-term rentals, alleviating the pressure on the housing market.
The first reaction of hoteliers
The announcements of Kyriakos Mitsotakis caused mixed reactions, with hoteliers expressing their disappointment.
The president of the Panhellenic Federation of Hoteliers, Yannis Hatzis, commented teasingly that the needs for quality upgrading of the tourism product and support for businesses and local communities were ignored.
According to him, hotel businesses will continue to bear additional burdens, while the contribution of short-term rentals to the pressure on public infrastructure is not being addressed in a meaningful way.
Additional measures also touching on short-term hiring
Apart from the direct measures concerning short-term rentals, Kyriakos Mitsotakis announced a series of additional economic measures that may indirectly affect businesses and property owners: reduction of insurance contributions: From 2025, insurance contributions are reduced by one point, with the aim of giving businesses room for wage increases.
An increase in the minimum wage: From April 2025, the minimum wage will be increased, affecting firms’ labour costs.
The abolition of the business tax: From 2025, business rates will be completely abolished for any self-employed or sole trader, providing financial relief for entrepreneurs, including short-term rental property managers.
Reduction of the minimum taxable amount: In smaller settlements with a population of less than 1,500 inhabitants, the minimum taxable amount is halved, which may benefit areas of the Greek periphery where short-term rental accommodation is active.
Abolition of the special tax on fixed telephony: From 2025, the 5% tax on fibre connections above 100Mbps is abolished, encouraging the development of digital infrastructure.
Modernisation of the Golden Visa: the possibility of obtaining a Golden Visa is extended beyond real estate to include investments in start-ups, an initiative that boosts entrepreneurship.
Increasing the ENVIA discount: homeowners insured for natural disasters will receive a 20% discount on ENVIA, while for larger properties the discount remains 10%.
With these measures, the government seeks to address economic challenges and boost growth, both in the short-term rental sector and the wider market
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