An article published in Haniotika Nea summarises the regulation changes for short-term rentals which were initially announced by the Prime Minister in his speech at the Thessaloniki International Fair, and examines their possible impact on the housing market.
Major changes are on the way in the short-term rental market, following the government’s decision, on the one hand to align as far as possible the obligations of those who offer property on short-term rental platforms with those running hotel units or rented rooms, and on the other hand to put a brake on oversupply in order to boost the long-term rental market.
The changes come at a time of acute housing crisis, with the number of available rental properties diminishing and prices skyrocketing, a consequence of the rapid and often unregulated spread of short-term rentals. The new rule changes, according to the responsible ministries, aim to restore balance in the property market, giving emphasis to the support of long-term rentals and reinforcing security and quality measures for short-term accommodation. Steps have already been taken to match the tax treatment of those operating short-term rental properties with other forms of accommodation rental.
In this context, stricter rules are being introduced for the licensing and operation of short-term rentals, as well as important incentives for owners who choose to switch to long-term rental. It is hoped that these changes will address the issue of the increased pressures on the housing market by providing a viable solution to the crisis which has affected a large number of households.
However, property market sources estimate that the new measures will have a limited effect on the general housing crisis. Despite the extra incentives which the government is offering owners to switch their properties from short-term to long-term rentals, industry representatives estimate that only 10 per cent of properties will make the change to the long-term sector. With nearly 120,000 Airbnb units in Greece this translates into around 12,000 to 15,000 properties which will return to the traditional rental market.
According to the government’s announcements at the 88th Thessaloniki International Fair, and the specifics announced by the relevant ministries, the new measures constitute significant changes, with winners and losers among property owners, according to the direction they decide to take. The measures include:
1. Restriction of new short-term rentals
From 1st January 2025 there will be a temporary freeze on the issue of new licences for short-term rentals in specific areas of Athens, such as the city centre, Pangrati and Neos Kosmos, for at least a year, with the possibility of an extension.
2. Incentives for long-term rental
Owners who transfer their properties from short-term to long-term rental will be exempt from income tax on that income for three years. The measure only applies to the properties of natural persons and not of companies. The estimated loss of income to the state will be around €3 million in 2025 and €13 million annually for the years 2026-28.
3. Strict conditions for short-term rentals
Short-term rental accommodation will be subject to strict minimum operating requirements, including a minimum floor area, prohibition on the use of basements, obligatory fire safety measures and safety certification by qualified engineers. The specifications also include obligatory civil liability insurance, installation of security systems, fire extinguishers, smoke detectors and regular disinfection of the accommodation before each rental.
4. Strict requirements for apartment blocks
In apartment blocks, the lifts will be have to be certified for professional use, while there will be restrictions on the number of flats which can be made available for short-term rental.
The new measures will be put in place for the start of the 2025 summer season, establishing a new basis for short-term rental in Greece and creating a more balanced and secure market. While these changes are aimed at improving the quality of accommodation and giving a boost to long-term rentals, their eventual impact on the housing crisis will depend on the effectiveness of their application and the market’s ability to adapt to the new conditions.
(Haniotika Nea, 21/09/24/APE-MPE)