Government seeks to control unregulated growth of short-term rentals
Years after short-term rentals took a hold in Greece’s tourism industry, the government is seeking to legislate to impose some order on an activity that has seen explosive, largely unregulated growth.
Tourism is arguably Greece’s most important economic activity, accounting for at least a fifth of the country’s economy. Short-term rentals account for about 14% of tourism activity, with revenue reaching an estimated €3.37 billion this year, and growing at an annual pace of 15%.
Local authorities and Greek hoteliers complain that this unregulated activity has negatively impacted cities in many ways. Housing shortages are just one of them, they say.
The Hellenic Chamber of Hotels on Monday presented a study by accounting and advisory firm Grant Thornton, which, besides the above-mentioned figures, notes that short-term rentals are, on average, five times higher than long-term ones; that foregone tax revenue, €160.6 million in 2016, is estimated to have nearly doubled, to €316.7 million, in 2022.
Besides lost revenue, the proliferation of short-term rentals also becomes a burden on infrastructure and, because of the limited to nonexistent technical know-how of the individual owners or firms managing the rentals, levels of noise pollution have increased significantly. There are also serious issues with maintenance and repairs of the housing offered for some rentals and the often significant gap between advertised and offered amenities and services downgrades the tourism product and becomes a reputational drag on destinations, the report notes.
Also, owners’ preference for short-term rentals means that people such as university students, doctors and teachers find it extremely difficult to secure affordable housing, a situation that disproportionally affects tourist destinations and their inhabitants.
The legislation will give local authorities the power to determine how much housing can be dedicated to short-term rentals and tax large rental firms more than individual owners. The hotel owners also propose a 90-day ceiling on properties being rented short-term, dropping to 60 days in smaller island communities and places where hotel occupancy drops below a certain level.
Rental managing firms counter that they mostly represent individual owners and are not large proprietors themselves, thus making the proposed higher taxation discriminatory.
