This fall, the Greek government has emerged as one of the leading newsmakers in the real estate sector, introducing several major initiatives.

One of the new measures allows property owners to receive tax benefits for renting out previously vacant or unused properties, provided they meet three specific conditions, which we will discuss later.

Additionally, the issuance of new licenses for short-term rentals, including those required for listing on platforms like Airbnb, has been temporarily suspended. These are part of a broader set of actions aimed at regulating the real estate market and addressing the shortage of affordable housing in the country.

Let’s explore how these new regulations will impact investors considering purchasing property in Greece.

Restrictions on Short-Term Rentals

Homeowners who are willing to move away from short-term rentals will now benefit from certain incentives, including a three-year tax break.

However, those looking to continue renting on platforms like Airbnb are in for a less favorable surprise. Greek Prime Minister Kyriakos Mitsotakis announced plans to increase taxes on short-term rentals and suspend the issuance of new rental licenses in central Athens.

New restrictive measures for properties rented through platforms like Airbnb— including a freeze on new licenses in Athens’ 1st, 2nd, and 3rd districts (Plaka, Syntagma, Monastiraki)—will come into effect on January 1, 2025.

Airbnb representatives have stated that the company is ready to work with the Greek government on “targeted and balanced solutions.”

Now for the good news: until the end of 2024, the current rules remain in place, allowing property owners to obtain new registration numbers for short-term rentals in these areas. After that, no new licenses will be issued.

Additional Fees

In addition to the restrictions on new Airbnb properties, additional fees have been introduced. These will form part of a tax aimed at enhancing climate crisis resilience and will be charged to owners of short-term rental properties.

The tax varies depending on the season:

• From November to February, the fee will be €0.50 per day.
• From March to October, the fee will increase to €1.50 per day for apartments and up to €10 per day for houses larger than 80 square meters.

These measures are designed to reduce the strain on the real estate market amid rising housing demand in Greece, particularly in popular tourist areas like the historic city center.

Tax Incentives

A three-year tax incentive for vacant properties is already in effect and will be available until the end of next year. To take advantage of it, property owners must not only be ready to offer their properties for long-term rental but also meet certain conditions.

The property must meet the following criteria:

• It must have been registered as vacant for the past three years.
• There must be no recorded electricity consumption.
• The property size must not exceed 120 square meters.

For example, if you own a property up to 120 square meters and are not a legal entity, you can convert a vacant space, declared as unused via the E2 form for at least three years, or a short-term rental property (operating for at least three years) into a long-term rental (for a minimum of three years, under an electronic rental agreement). If you do this between September 8, 2024, and December 31, 2025, you can qualify for a three-year tax break on the rental income.

If these conditions are met, owners can immediately declare that their property is available for long-term rental or remove it from short-term rental platforms, transitioning to traditional leasing. This can be done until the end of 2025, according to the Ministry of National Economy and Finance.

The tax incentive will apply from the moment the property is rented, though the exact details will be outlined in forthcoming legislation.

The Greek Real Estate Market: A Brief Overview for Investors

Strengthening of the Long-Term Rental Market
The introduction of restrictions on short-term rentals and new fees is an effort by the government to encourage property owners to shift towards long-term rentals. These measures aim to ease the housing shortage for local residents and make rentals more affordable.

Increased Revenue through Taxes
The new fees on short-term rental properties could provide the government with additional revenue amid the growing popularity of short-term rentals. This income may be used to improve infrastructure and address housing challenges.

Limiting Airbnb's Impact on the Real Estate Market
The moratorium on new licenses in key districts of Athens starting in 2025 reflects the government’s desire to curb the expansion of short-term rentals, which have driven up property prices and made housing less accessible for locals.

Enhancing Environmental Responsibility
The climate crisis sustainability tax will fund environmental initiatives, reflecting the government's intention to consider the environmental impact of increased tourism activity.

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