Routes and Roots

New Greek Laws for Airbnb and Short-Term Rentals: What Crete Property Owners Need to Know

1. The Legal Definition of a Short-Term Rental in Greece

In Greece, short-term rentals are defined as properties that are rented out for periods of less than 90 days (or 60 days for islands with less than 10,000 residents). These rentals are typically offered on platforms like Airbnb, VRBO, Booking.com, or through private arrangements.

The Greek government distinguishes short-term rentals from traditional hospitality businesses (e.g., hotels, guesthouses), subjecting them to different rules, which makes understanding the distinctions and requirements essential for avoiding legal issues.

2. Mandatory Property Registration for Airbnb Hosts

One of the most significant recent changes in Greek law involves the mandatory registration of all properties listed for short-term rentals. Property owners must register their properties in the Short-Term Residence Property Register (Μητρώο Ακινήτων Βραχυχρόνιας Διαμονής), operated by the Independent Authority for Public Revenue (AADE).

  • How to Register: Hosts must obtain a Property Registration Number (PRN) by submitting their property details through the Greek government’s online platform. This number must be included in all listings on platforms such as Airbnb and VRBO. The process is relatively straightforward and can be completed online.
  • Failure to Register: Non-compliance with this registration requirement can result in fines starting from €5,000, and platforms like Airbnb are obligated to remove unregistered properties from their websites.

3. New Tax Obligations for Airbnb Hosts in Crete

Greek tax authorities are placing a high emphasis on ensuring that income from short-term rentals is declared and taxed properly. Property owners must understand the following key tax obligations:

  • Income Declaration: Rental income earned from short-term rentals must be declared on your annual tax return. The tax rate for short-term rental income is progressive:
    • 15% on income up to €12,000
    • 35% on income between €12,001 and €35,000
    • 45% on income above €35,000
  • Value-Added Tax (VAT): Generally, short-term rentals are exempt from VAT in Greece unless the property offers hotel-like services (e.g., breakfast, daily cleaning, or concierge services). If you do offer these services, you may be subject to VAT, currently set at 13% for accommodation services.
  • Earnings from Foreign Nationals: If you’re a foreign national renting out a property in Crete, you are still required to declare income and comply with Greek tax laws, even if you manage the listing from abroad. Foreign property owners should consult a tax advisor to ensure they meet local obligations and to avoid double taxation.

4. New Regulations on Zoning and Property Limits

To preserve the integrity of local neighborhoods and prevent overtourism, the Greek government has introduced zoning restrictions and rental limits in certain areas. These restrictions may affect Crete, particularly in more tourist-heavy cities like Chania, Rethymno, and Heraklion.

  • Rental Limits: In areas with high tourist demand, local municipalities can enforce restrictions that limit the number of days a property can be rented out each year. For instance, in some areas, short-term rentals may be capped at 90 days per year.
  • Zoning Laws: Some regions of Crete, particularly those with a strong local population or historical significance, may be subject to zoning laws that restrict or prohibit short-term rentals. Before listing your property, it’s crucial to check with local authorities to ensure compliance.

5. Health and Safety Standards for Short-Term Rentals

In light of the increased scrutiny on short-term rentals, Greece has introduced regulations aimed at ensuring properties meet specific health and safety standards. These standards are particularly important in the post-pandemic travel era.

  • Fire Safety and Emergency Equipment: Properties must be equipped with fire extinguishers, smoke detectors, and clear emergency exit routes. It’s advisable to keep a first-aid kit on-site as well.
  • Hygiene Requirements: Given the COVID-19 pandemic, maintaining high hygiene standards is crucial. Hosts should ensure properties are thoroughly cleaned between guest stays, with attention to disinfecting surfaces and linens.

6. Fines and Penalties for Non-Compliance

The Greek government is serious about enforcing its short-term rental regulations, and non-compliance can lead to hefty fines and penalties. Common violations include failing to register your property, not declaring income, exceeding rental limits, or violating zoning laws.

  • Fines: The penalties for non-compliance can be steep. As mentioned earlier, failing to register your property can result in fines starting at €5,000. Tax violations, such as underreporting rental income, can lead to further financial penalties and legal trouble.
  • Platform Responsibilities: Platforms like Airbnb are also held accountable for ensuring compliance. These platforms may be required to share rental data with the Greek authorities, making it harder for hosts to operate “under the radar.”

7. Benefits of Compliance: Protecting Your Rental Business

While adhering to these regulations may seem burdensome, compliance offers significant benefits for property owners in Crete:

  • Increased Trust: When you operate legally and transparently, guests are more likely to trust your listing and leave positive reviews, which can improve your ranking on platforms like Airbnb and VRBO.
  • Avoiding Legal Trouble: Complying with Greek laws ensures you avoid hefty fines, legal complications, and the risk of having your property removed from rental platforms.
  • Sustainability of the Industry: By following regulations, you contribute to the long-term sustainability of the short-term rental industry in Crete, helping protect local communities and maintaining the island’s appeal as a destination.

Conclusion

The new laws for short-term rentals in Greece, including those specific to Crete, are designed to bring greater transparency, fairness, and safety to the booming vacation rental market. As a property owner, it’s crucial to stay informed and compliant with these regulations, from registering your property to paying the appropriate taxes and adhering to zoning laws.

By understanding and following these rules, you can avoid costly penalties and ensure a successful rental business that benefits both you and the local community. For those new to the short-term rental market in Crete, consulting with a property management professional or legal advisor is highly recommended to navigate these regulations effectively.

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