By Chrysostomos Tsoufis

The intention of the finance ministry not to issue the ministerial decision setting a maximum limit for the disposal of real estate for short-term lease was clarified by the Deputy Minister of Finance Haris Theocharisalthough the relevant legislative framework exists.

The current law provides that the Ministers of Development, Finance and Tourism may, for reasons related to the protection of the residence, define geographical zones in which:

– Do not allow the short-term rental of more than two properties per TIN of beneficiary income.

– The lease of each property should not exceed 90 days per calendar year and for islands with less than 10,000 inhabitants 60 days per calendar year.

Theoharis statement certainly caused sighs of relief in the market, but that doesn’t mean there won’t be changes. In fact, the Ministry of Finance is putting the final touches on the relevant bill whose purpose, according to its leadership, will be to balance the market so that competition with hotels and other accommodations is healthy.

Among the changes being promoted are:

-Individuals who have three or more properties on a digital platform for short-term rental are required to register a business activity. Therefore, they will have the same obligations as businesses that carry out the corresponding activity (corresponding insurance contributions, VAT from the first property and business tax. The regulation concerns approximately 7,500 natural persons who own approximately 30,000 properties for short-term rental.

-All properties available for short-term rental without exception will be subject to a residence fee as applicable to tourist accommodations.

The accommodation fee also includes the so-called climate change response fee. So the new scale of the accommodation fee is as follows:

Category End

1-2 stars €1.50

3 stars €3

4 stars €7

5 stars €10

Rentable €1.5

Short-term rental €1.50

Given that the reduction of tax evasion is a government priority, the intensification of controls and the imposition of sanctions with increased fines in cases of tax evasion or the provision of additional services other than accommodation and bed linen must be considered certain.

The horizontal fine of €5,000 for not registering in Registry of Short-term rental properties is set at 50% of the gross income of the last tax year with a minimum of €5,000. In case of a repeat offense, the fine will be doubled.

There will also be a provision in the bill for those apartment buildings whose entire apartments are available for short-term rental. In this case they will be considered tourist accommodation and should have the corresponding licensing.