Addressing the housing crisis is expected to be one of the main pillars of the government’s announcements at this year’s Thessaloniki International Fair (TIF), with the economic team preparing a new package of incentives aimed at increasing the supply of housing. At the center of the plans are property owners who currently keep apartments vacant or rent them out through short-term rental platforms such as Airbnb, whom the government is seeking to encourage to enter the long-term rental market through stronger tax incentives.
According to reports, the Prime Minister’s Office is considering both extending and expanding the current framework of tax exemptions, estimating that boosting supply is now the most important intervention for easing the pressure recorded in rental prices. After all, the housing issue has evolved into one of the biggest social challenges of the period, affecting mainly young couples, employees, and students who struggle to find housing at affordable prices.
Contrary to scenarios that have occasionally been put forward regarding the imposition of new restrictions on short-term rentals, the government appears to have chosen to proceed through positive incentives, seeking to make it financially more attractive to offer a property on the long-term rental market.
Extension of the existing measure
The measure already in force provides for a full exemption from income tax on the rental income received by a property owner for a period of three years, provided that they make available as a primary residence a property that had remained vacant or convert it from a short-term rental into a long-term lease.
The framework is currently in force until the end of 2026. However, the economic team is considering extending it, as well as strengthening it, provided that the evaluation shows that it is making a substantial contribution to bringing homes back into the long-term rental market.
The objective is to increase the number of homes available for rent at a time when demand remains particularly strong and supply limited, resulting in rising prices across almost the entire country.
The changes under consideration
According to reports, the proposals submitted to the Ministry of National Economy and Finance provide for significant improvements to the current regime.
Among them is the reduction of the required vacancy period for a property from three years to two years, allowing more owners to qualify for the programme. At the same time, consideration is being given to the introduction of a system of graduated tax relief after the expiration of the three-year exemption, as well as expanding the categories of properties that will be eligible to benefit from this specific tax framework.
The philosophy behind these changes is for the measure not to function as a temporary facilitation, but rather to become a more stable instrument for boosting long-term rentals.
The financial benefit for property owners
The tax incentive is considered particularly significant, as it can save a property owner thousands of euros.
For example, an apartment rented for €700 per month generates annual rental income of €8,400. Under the basic tax rate of 15%, the annual tax amounts to €1,260. The three-year exemption therefore results in a total benefit of approximately €3,780, while for higher rental incomes, where higher tax rates apply, the financial gain is even greater.
The government estimates that a more generous tax framework could serve as a strong incentive for owners who currently choose either to keep their properties vacant or to rent them through short-term rental platforms.
Who is eligible
The current framework sets out specific conditions for eligibility. The property must have been either vacant or used exclusively for short-term rentals during the previous three years, must not exceed 120 square metres—with higher limits applying to families with more than two children—and must be rented out as a primary residence under a lease agreement with a minimum duration of three years.
At the same time, if the tenant leaves before the lease expires, the tax exemption is not lost, provided that the owner signs a new three-year lease within three months.
The market calls for permanent solutions
Strengthening tax incentives has long been a standing request from stakeholders in the real estate market, who believe that increasing the supply of housing is the only sustainable solution for easing rental prices.
At the same time, a study by IME GSEVEE describes the housing crisis as a structural problem, noting that housing costs are rising faster than household incomes. The study also points out that the incentives introduced so far have not led to a substantial increase in housing supply, while both the OECD and other international organisations recommend policies that encourage the utilisation of vacant properties and the expansion of long-term rentals.
Against this backdrop, the announcements at the Thessaloniki International Fair take on particular importance, as they are expected to clarify whether the government will proceed with a more generous framework of tax incentives aimed at bringing more homes from short-term rental platforms and vacant properties back into the long-term rental market, thereby increasing supply at a time when demand remains at historically high levels.
