The government, in collaboration with Greek business operators, is making an effort to find the golden balance between regulating the largely unregulated short-term rental market and supporting the growth of the tourism industry, which is taking a share of traditional hospitality around the world. tourism but also local government.

It is generally accepted that short-term lease, i.e. accommodation of guests in short-term rental apartments and houses with booking through online platforms (Airbnb, Booking, Trip Advisor, etc. Greek tourism product and accommodation options in Greece. In fact, a recent study by Grant Thornton shows that the turnover generated by short-term rentals , corresponds to 14.41% of the total economic activity of Greek tourism.Having reached this size, the negative consequences for the nature of destinations, for the growth of hypertourism, for the formation of local communities and for meeting the housing needs of residents, students, workers and government employees are now obvious.

At the moment, three different classes of short-term rental rights have been formed in the country: firstly, small owners who rent out their main housing or any other property they have in the city or in the countryside, and secondly, owners with more than two or three apartments, and through this lease they earn their living as income-generating and, thirdly, large landlords, individuals or legal entities, who acquire all real estate, arrange it properly and operate it as a hotel, hiding behind a short-term lease, in order to avoid regulatory, tax and other obligations.

This division is expected to be reflected in the new framework law that the government is preparing. A structure, however, that still has important unresolved questions about the final form it will take. In fact, a teleconference of the Government Presidium with the Ministries of Tourism, Finance, Labor and Environment is scheduled for tomorrow Monday to clarify certain issues and move the process forward.

Corresponds to 14.4% of Greek tourism. The feud between hoteliers and real estate owners escalates.

This issue has created a rift between owners and managers of short-term rental properties on the one hand, and hotel owners on the other, who view the activity as unfair competition.

The “last straw” that provoked an organized reaction from hoteliers was the announcement a few months ago by a large international hotel chain that an entire building in Mitropolis was transferred to short-term rental mode. A decision that the company in question has finally reversed and continues to operate the building as a hotel. Similar cases, perhaps not so egregious, exist in almost all areas of Athens and Thessaloniki, as well as in other cities and towns of the Greek region.

It is alleged that the Presidium of the Government, together with the ministries of finance, ecology and tourism and the representative bodies of tourism, focuses on two areas: the market for short-term rentals to municipalities. Municipalities, after studies that will jointly assess parameters such as the carrying capacity of their areas of responsibility, the housing needs of residents, workers, students, etc., the adequacy of infrastructure, as well as the preservation of the special character of their individual areas, will be able to set limits on the number of properties, available for short term rentals. Recently, however, there have been doubts about the ability of small municipalities to meet this challenge in order to ensure that their regulatory and oversight functions are properly carried out. At the same time, the side of large municipalities, such as Athens, opposes horizontal regulation and wants them to be given the opportunity to develop their policies for each area. “Others are Koukaki and Plaka, others are Center and Kolonaki, others are Pagrati and Ampelokipoi,” sources from Kotsia Square say.

The second direction the government is pursuing, as Tourism Minister Vassilis Kikilias announced this week, concerns a parallel legislative intervention by the Finance Ministry to differentiate the tax treatment of individuals and legal entities depending on whether they are smallholders. with one or two properties, high net worth individuals or professionals with a large number of properties available for short term rentals. “Short-term rentals are part of our tourism product. But for the proper functioning of healthy competition and urban centers, the government is working on a structure that will separate those who rent mass properties from the majority who rent one or two properties,” he said.

New market grows by 15% every year

The turnover of short-term rentals in Greece, direct (i.e. rent) and indirect (i.e. expenses incurred by tenants), is estimated at 3.3 billion euros this year from 2.96 billion in 2019 and 1.42 billion in 2016. up to 14.41% of the total economic activity of tourism. And the number of properties available on the platforms is estimated at 129,000 this year, up from 57,000 in 2016.

These assessments are articulated in a study by Grant Thornton titled “Short-Term Rentals: Impact on Cities and Citizens”, conducted on behalf of the Hellenic Chamber of Hotels and released this week. From these figures it follows that the sharing economy, as the short-term rental market is also called, is growing at 15% per year. Which is to be expected, given that the average short-term rental price is 5 times higher than the long-term rental price, which creates strong incentives for owners to short-term sell their property. Grant Thornton estimates the state’s lost revenue from the unregulated operation of this market at $316.7 million. However, the study also captures important qualitative characteristics and, in particular, the negative impact of the uncontrolled exploitation of these premises. Among the effects, first of all, the change in the character of quarters, settlements, cities and entire islands is mentioned. But also the deterioration in the quality of life of residents in apartment buildings and areas where activity has a strong presence, as well as the overall load on networks and infrastructure.

It has also been found that due to the lack of know-how of many owners, there are problems with soundproofing and inconvenience, issues of proper maintenance and repair of facilities and, ultimately, a discrepancy between the designed and actually offered level of services. This, in turn, leads, according to Grant Thornton, to “the risk of a deterioration in the quality of the Greek tourism product and a negative impact on its recognition at the international level.” Other issues mentioned are related to public and personal safety, the burden on waste management and energy consumption.

Market already regulated, says Airbnb, owners fear extinction

The regulation of the short-term rental market, introduced both at the European and national levels, has acquired the scale of an open confrontation between hoteliers and property owners. And even in public. And they provoke extreme positions on both sides. Airbnb also takes a stance on this issue. According to online short-term rental platform Kathimerini, “Hosting in Greece is already regulated, and Airbnb is partnering with the Independent Government Revenue Authority to help hosts register their homes, remove illegal listings, and secure tax payments. Hosts in Greece tend to be ordinary families who share their homes to supplement their income and afford the rising cost of living. We believe the current rules are clear and easy to implement and are a positive example of how platforms and governments can work together to support local families.”

However, according to European real estate circles, the measures currently being assessed internationally include heavy fines for undeclared – and therefore delinquent – short-term rental property, linking this activity to the mandatory payment of insurance contributions, the agreement of the meeting of tenants to use the property in a short-term lease, separate entrances, but also the imposition of presumptions of double income than usual.

Heads of destination management agencies in Porto and Paris, meeting this week in Athens, say their cities have placed limits on the amount of housing that can be provided through short-term rentals and are subject to stringent checks for undeclared ones, while at the same time they are still provided and subsidized to landlords to move their property from the short-term to long-term rental market.

For its part, the Panhellenic Federation of Property Owners (POMIDA), together with the Greek Short Term Property Companies Association (STAMA), sent a letter to the Prime Minister and the relevant ministers, in which they characterize the initiatives being put forward as measures. to “break the institutional backbone of the tourism product” taken “under the suffocating pressure of hotel owners”, ignoring the fact that this lease “renewed entire neighborhoods in the center of Athens with renovated buildings, with shops open, giving life, income and property value to citizens” . Therefore, they ask for advice before taking any action and state that “restrictions will hit the tourism product and push the successful into the shadow economy and tax evasion, reducing GDP and income, as well as the taxes of tens of thousands of smallholders who make various contributions to other areas such as building renovations, local business development, etc.

The Chamber of Hotels recommends, inter alia, setting a maximum rental limit for each accommodation of up to 90 days per year, which should be reduced to 60 days in the case of small islands or areas with low average hotel occupancy. Also, by decision of the municipality, not to allow the registration of new properties in the relevant registries in the delimited parts of the cities, if the short-term rental of houses exceeds 50% of the owner-occupants or is leased for a long-term lease, to establish a limit of two properties per landlord, when it is an individual, and each legal entity is considered professional, and set the technical and operational specifications. Recommendations are also made on the introduction of fees in favor of municipalities, as well as on a higher income tax on short-term rentals compared to long-term rentals, as well as VAT on properties that have been on the market for more than 3 years. years. It is also proposed to introduce mandatory informing of co-owners in apartment buildings and increase share users by 25%, as well as the introduction of a complaints control system.