VAT, a special municipal tax, a property cap and rental time limits are among the actions Greece’s tourism stakeholders are demanding from the government in an attempt to regulate Airbnb-style activities which, they say, are distorting healthy market competition.
The Greek Tourism Confederation (SETE), representing the majority of Greece’s tourism enterprises, is once again calling on the government to take immediate action and amend the law which covers short-term rental operations in order to ensure fair play and protect tax-paying businesses.
In this direction SETE tabled proposals this week which include imposing value added tax, a municipal tax, withholding a tax for professional activity in short-term leasing, setting a cap on properties that can be leased by any one owner, setting a time limit for property rentals based on area which should not exceed 90 days per year and for islands with fewer than 10,000 residents 60 days.
Additionally, properties leased out as Airbnbs cannot offer other services. In the case of additional services provided, then the property must be listed as a tourist accommodation facility and as such must hold special certification and legal documentation. Violators should be fined 10,000 euros and double the fee for repeat violations. The same should apply to apartment blocks which operate in full as short-term rentals.
SETE also recommends that a 5 percent tax on the rental rate be imposed – to be paid by the customer – which should be collected by the short-term rental platform.
The confederation went on to stress the need for regular inspections by a mixed team of tax and tourism ministry officials and suggests fines for violations.
“It goes without saying that SETE supports new investments as long as these are strictly subject to the existing legal framework. Any attempt at circumvention which distorts competition will find us on the opposite end. The state should make use of all its control mechanisms,” said SETE President Yiannis Retsos late last month on the news of a new Airbnb-style operation in the center of Athens that has included services in its offerings.
Addressing the press for the first time in person after the of outbreak of Covid-19 on Monday, Retsos went on to add that companies are taking advantage of “loopholes” in the current law which allow the establishment of Airbnb-style ‘complexes’ offering dozens of apartments for short-term rental while at the same time providing additional hospitality services, including F&B services, wellness amenities and recreational activities.
“Instead of operating as hotels, they choose the short-term rental market… This leads to lost revenue from VAT for the Greek state and unfair competition for hotels,” he said.
In February, Greek hoteliers said they would be taking legal action against short-term rental companies which advertise and operate as hotels.
“We cannot continue to preserve a grey zone when it comes to short-term rentals whereby entrepreneurs acquire or lease entire blocks of apartments, transform them into rooms for rent, and by chance there is always a cafeteria on the ground floor serving breakfast; they advertise themselves as hotels on booking platforms online without having any such permit,” said Hellenic Chamber of Hotels (HCH) President Alexandros Vassilikos.
Echoing Vassilikos, the Peloponnese Tourism Organization (PTO) also called on the government to take immediate action and implement controls on Airbnb-style tourist rentals.
STAMA: ‘The needs of travelers are changing’
Greece’s Short-Term Accommodation Managers Association (STAMA) issued a statement on Wednesday in response to the proposals in which it says that SETE is in effect “requesting that hundreds of Greek companies (property managers) operating under a legal tax framework stop, that thousands of owners across the country who are taxed lose their additional income, and that any regional activities in short-term leasing such as construction, renovations, equipment, technology companies, cooperating companies from abroad stop”.
In its statement, STAMA goes on to add that “we need to understand that the tourism product is changing as are the needs of travelers and no one can prevent the free movement of visitors worldwide and their right to choose the way they travel and where they stay.”
Initially as a way for crisis-hit Greeks to make a living, the last decade, Airbnb activities in Greece have soared with whole neighborhoods in Athens evolving into short-term rental areas. The once buzzing Athens neighborhood of Psyrri is a case in point, coming back to life as more and more buyers invest in short-term rentals, boutique hotels and accommodation facilities there.
Indicatively, bookings for Airbnbs across the country this summer are up by 232 percent placing Greece in the lead in Europe in terms of overall booking performance.