SETE Positions

Short-Term Rental Market

More and more destinations worldwide enter into agreements with platforms operating in the field of short-term leases for the direct collection of taxes, the provision of updates and the cross-checking of information about the said leases by tax authorities.

According to reliable estimates, the properties available for short-term rental in Greece exceed the number of licensed tourist accommodations. 

The problem of the differential tax treatment between properties available for short-term rental and licensed tourist accommodations is particularly big.

While licensed accommodations operate in a business environment of overtaxation, properties involved in short-term leasing enjoy low tax rates, without a regulatory framework and any effective control mechanism.

SETE closely follows international developments on this issue, stepping in at every opportunity within the competent bodies towards the adoption of successful audit practices in our country.

Following the launch of the Registry of Short-Term Lease Properties, a memorandum was submitted to the competent authorities regarding the practices adopted by Denmark. The Danish government has come to an agreement with a large online platform, in order for the Ministry of Finance to be automatically informed about rental income which was generated through the use of the specific platform.   

Similar examples can be found in other major destinations. Since July, a platform in France has agreed to collect and directly forward to the country’s competent authorities the tourist tax on behalf of all 23,000 properties that it manages. Spain is already considering setting up a single registry and introducing criteria in order to safeguard the quality of the tourism product and to avert / reverse the housing problem that is developing. Moreover, starting from the beginning of 2019, Airbnb-style platforms will provide the competent Ministry of Finance with quarterly information regarding all transactions of the period, presenting data for both owners and tenants.

Similarly, there are more than 150 areas and cities in the USA that have imposed various types of tourist taxes on bookings made through short-term lease platforms.

All these examples demonstrate that the so-called “sharing economy” is an international –and clearly commercial– trend that will keep growing, claiming a part of the tourism market in the future.

In Greece, the phenomenon should be treated as an activity that needs regulation, given that –under certain conditions– it can complement the tourism product and bring revenue to the state. At the same time, we should take into account the signs of stimulation in the construction industry as manifested by the building of houses in tourist destinations.

However, it is important that this practice should not constitute unfair competition for businesses that operate legally and, of course, that it should not create collateral –but significant– problems in housing availability, rent prices, and the smooth functioning of apartment buildings, neighbourhoods and cities.

At this point, we need to activate all stakeholders involved: the government, the municipal and regional authorities and, of course, the tourism sector. We need to exchange views and make decisions before the phenomenon gets out of control. International practices point at the way. What is now needed is the will.

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