The Panhellenic Federation of Property Owners (POMIDA) clearly lists the problems that have been created by new specifications introduced to the short-term rental industry in the Ministry of Tourism’s draft bill, which is currently under public consultation.
The first thing the Federation points out is that “The constant accumulation of new tax measures and specifications leads to an increase in the cost of accommodation in short-term rental properties, which will inevitably lead to a reduction in tax revenues, but also to a financial “strangulation” of those involved in it, resulting in a reduction in the country’s tourism revenues.”
Although it does not disagree with civil liability insurance or the other self-evident security measures provided for in the bill, the Federation “asks to take into account the disastrous failure of the measures against short-term rentals in Barcelona, which were supposed to solve the housing problem in the city, but hasn’t happened because – like in Greece – this was not the root cause of the housing problems, to put an end to the “endless persecution” of short-term rentals by reviewing from the beginning both this provision and the entire network of these successive burdens, if the “resilience” of short-term rentals, an activity that is 100% in Greek hands and operates for the benefit of society, but also the “resilience” of our country’s tourism is also of interest…”
1. Primary residential use
The most serious issue is that the properties available for short-term rental should “constitute areas of primary residential use of par. 95 of article 2 of law 4067/2012 (A’ 79)”.
This means, as POMIDA explains, that it should “have been included in the building’s construction coefficient from the beginning or the use of the space should have been legalized based on the provisions of law 4495/2017 which, it should be noted, expires on 31.03.2026, with the basic condition that the change of use has taken place by 28.07.2011. Implementing it will result in the retroactive disuse of accommodations in which money and work have been invested and which have been reputable on the platforms for many years, while possessing all the other quality characteristics. In addition, this provision excludes a large number of available spaces such as professional office buildings and industrial spaces in the center of Athens and other large cities, which were never used for housing and have sat vacant and abandoned for years. These properties were originally renovated in order to be made available for short-term rental, contributing to the aesthetic upgrading of degraded, former industrial areas! For this reason, this particular specification, if not removed from the bill, should at least only concern the future, and should not be retroactive.
2. Controlling the situation
Another issue are the controlled checks laid out in the bill, POMIDA expresses doubt about their constitutionality. “This provision provides for compulsory inspections of private houses by mixed teams of state bodies, with the possibility of organising police raids and imposing heavy fines. It therefore highlights the potential for new avenues of corruption and oppression of citizens, while the AADE tries to avoid these possible outcomes. For this reason, compliance with these conditions should be proven by statements from the owners, as is the case in all similar urban planning procedures. After all, the undisputed judge of quality when it comes to accommodation, is the guests, who mercilessly rate any lack of quality and functionality, sending unsuitable accommodation to the unclaimed platforms.”
3. The financial cost
Finally, POMIDA notes that “the implementation of the new specifications comes with a not inconsiderable financial cost, which, added to the recent new and successive tax measures against short-term rentals, creates both suffocating financial conditions for property owners and a forced increase in average daily rates (ADR), which hurts the competitiveness of the Greek tourism product in an internationalised tourism market and therefore the number of tourists who will visit the country. Therefore, the minimum that should be added to this provision is that the financial cost of all these new specifications, as well as their other operating expenses, be deducted from the taxable income of the owners.”
Deciding short-term rental new specifications
The Ministry of Tourism’s bill entitled: “Specifications for short-term rental properties, environmental classification of accommodations, simplification of the process of establishing tourism businesses and more specific provisions for controlling and strengthening the tourism infrastructure framework”, is in public consultation until December 15th, 2024.
Interested parties can submit their comments here.
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