Major upheavals are imminent in its market short term rental, following the government’s decisions to proceed with further regulation, with the aim on the one hand to align as far as possible the obligations of those who offer real estate through short-term rental platforms with those who have hotel units or rooms for rent and on the other hand to curb oversupply in order to stimulate the market of the long-term lease.

These changes come at a time when there is an acute housing crisis, with properties for rent decreasing and prices skyrocketing, as a result of the rapid and often unregulated spread of short-term rentals.

The new regulations, as assessed by the government and the relevant ministries, aspire to restore balance in the real estate market, emphasizing the support of long-term leasing and strengthening safety and quality measures for short-term accommodation. It is worth noting that there have been previous measures to equalize the tax treatment of short-term rental property managers with other forms of rental accommodation.

In this context, stricter rules are introduced for the licensing and operation of short-term rentals, as well as significant incentives for landlords who choose to switch to long-term rentals. These initiatives, while eagerly awaited, should address the issue of increasing pressure on the housing market in the hope that they will provide a sustainable solution to the crisis that has affected a large number of households.

Despite broad expectations, real estate market players estimate that the new regulations will have a limited impact on the overall housing crisis. Although the government’s incentives for landlords to convert their properties from short-term to long-term rentals are strengthened, it is estimated that only 10% of properties will switch to the long-term market, at least according to industry representatives.

Given that tAirbnb in Greece is approaching 120,000this translates into approximately 12,000 to 15,000 properties returning to the traditional rental market.

According to the announcements of the government at the 88th International Exhibition of Thessaloniki (TIF), but also the specialization of these by the relevant ministries, the new regulations include significant changes, with winners and losers, depending on the direction they choose.

These actions include:

1. Restriction of new short-term rentals: From January 1, 2025, there will be a temporary freeze on the issuance of new permits for short-term rentals in certain areas of Athens, such as the city center, Pagrati and Neo Kosmos, for at least one year, with possibility of extension.

2. Long-term rental incentives: Landlords who convert their properties from short-term to long-term rentals will be exempt from income tax for three years. The measure concerns exclusively the properties of natural persons and not of businesses. The estimated revenue loss for the state will be around 3 million euros in 2025 and 13 million euros per year for the years 2026-2028.

3. Strict specifications for short-term rental: Short-term rental accommodation will be subject to strict minimum requirements for its operation, including the establishment of a minimum floor area, prohibition of the use of underground spaces, mandatory fire safety and safety certifications by specialist engineers. The specifications also include liability certification, installation of security systems, fire extinguishing systems, smoke detectors and regular disinfection of the accommodation before each new tenancy.

4. Stricter requirements for apartment buildings: Apartment buildings will require the elevator to be certified for commercial use, while restrictions will be placed on the number of available accommodations that can be made available for short-term rental.

The new regulations are expected to be implemented before the start of the 2025 summer season, setting new standards for short-term rentals in Greece and creating a more balanced and secure market. While these changes aim to improve the quality of accommodation and strengthen long-term tenancy, their ultimate impact on the housing crisis will depend on the effectiveness of their implementation and the ability of the market to adapt to the new conditions.