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Sharing Economy via Digital Platforms: How is Greece Treating Airbnb-Style Rentals?

Sharing Economy via Digital Platforms: How is Greece Treating Airbnb-Style Rentals?

Greece
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With the Greek peak summer holiday season fast approaching, hosts leasing out their properties through sharing-economy digital platforms are seeking the best way to make themselves compliant with the applicable regulatory framework.

The current regime on short-term leases sets out a series of requirements that property managers – individuals or legal entities responsible for posting properties on digital platforms and general leasing arrangements –  need to fulfill in order to ensure that the property is properly uploaded on a platform and registered with the competent registries and authorities. Such requirements do not apply to rentals via sharing economy platforms made before January 1, 2018 and/or properties that have already been awarded a license from Greece’s National Tourism Organization.

The general rule extends the 90-day qualifying period for short-term leases of the previous regime and requires that leases do not exceed the maximum period of one year, with a 90-day or 60-day limit exception where certain “protection of housing” rules apply.

The new rules for Airbnb-style properties require property managers to enroll in the registry for short-term leases operated by the Independent Authority for Public Revenue (AADE), submit all information required per leased property such as income beneficiaries and percentages, and, subsequently, obtain a unique registration code for each of the properties, which must be placed in a prominent position in each listing of the property on the digital platform. This last requirement applies to properties bearing an EOT-authorized license as well, in which case the number of the license should accompany all postings on the property. Failure of the property managers to enroll in the AADE’s electronic registry as per the requirements set by law or any property listing bearing an incorrect registration number may incur administrative penalties of as high as 5,000 euros.

Property managers that have been duly registered with the short-term lease registry are required to file individual reports related to each lease of their property with the registry. Such reports must include information such as the registration code of the property, information on tenants, duration of stay, the rental amount charged, the digital platform where the posting was uploaded, and the means of payment by the tenant, as well as any booking cancellation and applicable cancellation fees. The law requires that this reporting should take place immediately upon the tenant’s departure and at the latest by midnight of the following business day.

As regards the tax aspects of the aforementioned real estate regulatory framework, the law provides for two distinct classes of income depending on the nature of the services provided alongside the lease of the property. More specifically, any income from short-term leases shall be treated as income from real estate and therefore be exempt from VAT, as long as the leases do not imply the provision of any other services except for bed linens. Where additional services are rendered, such income shall be considered to have derived from business activities.

Although all previous regulatory frameworks that have aspired to properly and efficiently regulate the sharing economy market have been ignored by the taxpayers potentially subject to them, the current legislation appears to be more user-friendly, as it imposes fewer restrictions on all stakeholders involved (such as property managers, income beneficiaries, property owners, etc.). The new registration and listing requirements provide for a more straightforward and less complicated procedure, making the short-term lease market an attractive business pole for property owners. However, the operational efficiency of the current framework will be assessed following the end of the summer tourist period, when there will be a clearer image of all the activities recorded with respect to short-leases. That compliance assessment should come up with more accurate results. 

By Panagiotis Drakopoulos, Senior Partner, Mariliza Kyparissi, Senior Associate, Drakopoulos

This Article was originally published in Issue 5.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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