In the ever-evolving landscape of Greek real estate, significant legal shifts are unfolding, specifically targeting the regulation of short-term rentals. These changes, spanning taxation and operations, are set to impact investors, property owners, and real estate management companies. Staying abreast of the latest legal developments becomes crucial for successfully navigating Greece’s evolving real estate landscape and comprehending the dynamics within the sector.
Understanding the legal shift
Driven by a surge in short-term rentals and state revenues reaching 530 million euros, the Greek government is taking decisive steps to reform the legal framework and taxation. These efforts are focused on approximately 145,000 residences engaged in short-term leasing.
Proposed reforms for short-term rentals
The latest bill presented by the Minister of National Economy and Finance, Kostis Hatzidakis, introduces crucial changes to combat tax evasion and promote fair taxation. Focused on the hospitality and tourism sectors, the proposed reforms include:
Climate crisis resilience charge: Replacing the existing stayover tax, property owners leasing one or more properties will impose a daily scaled fee, ranging from 1.5 euros to 10 euros (March-October) and 0.5 euros to 4 euros (November-February). Revenues from this charge will contribute to a specially created emergency fund for natural disasters.
Business operations requirement: Those leasing three or more properties for short-term tourist leases must initiate business operations, including maintaining financial accounts, paying VAT, and other taxes.
Penalties for non-compliance: Individuals failing to register on the registry face fines equal to 50% of the previous year’s gross income, with a minimum of 5,000 euros. Repeat violations incur double fines.
Definition of short-term rental: Described as the lease or sublease for a duration of less than 60 days, of a property posted on a digital platform, and limited to providing accommodation and bed linen with no additional services.
New Activity Code Number (KAD): The Ministry has introduced a new code for short-term rental activity.
Fines for online platforms: Penalties for online platforms violating rules include fines for late submissions, failure to provide required information, submitting incomplete or inaccurate information, failure to comply with tax authorities’ requests, lack of cooperation during audits, and non-compliance after an audit. Fines can reach up to 500,000 euros per inspection.
Additional changes to taxation regulations involve restrictions on cash transactions for real estate purchases or sales, a new taxation system for freelance professionals, and doubled fines for transactions exceeding 500 euros conducted in cash.
Impact on the real estate landscape
Impending legal reforms will reshape the real estate landscape, impacting investors and property owners. As the government aims to strike a balance between real estate sector growth and fair taxation, stakeholders must stay informed and adapt to these changes. Investors will need to recalibrate their strategies in response to the evolving regulatory landscape. The reforms, aiming to boost transparency and accountability, will potentially create fresh opportunities for strategic investments. The increased categorization of property owners and managers signifies a more nuanced approach, allowing investors to align their ventures with the specific requirements of the reformed system. Proactive adaptation to imminent changes is not just a recommendation but a strategic necessity. The ability to navigate the intricacies of the reformed legal framework will be a key determinant of success.
Adapting to the future
As the legal landscape transforms, investors and property owners are urged to stay abreast of developments and ensure compliance with the new regulations. In the midst of transformative legal reforms, having a trusted partner is crucial. A property management company like Lavish Estate, known for its extensive experience and individualized approach, stands out as a strategic ally for investors and property owners alike. Offering a comprehensive suite of services, Lavish Estate excels in providing operational efficiency, adept financial management, and valuable strategic insights. As a reliable strategic partner, the company is dedicated to guiding clients through the complexities of the evolving real estate landscape, ensuring their success and resilience in this dynamic market.
In conclusion, stakeholders in the Greek real estate market are entering a new era marked by regulatory changes and increased transparency. By understanding these developments, investors can make informed decisions and position themselves for success in this evolving landscape.