The vacation rental market in Greece is bracing itself for new restrictions from the Greek government.
One of the most frequent questions the local press asks Greek ministers and the prime minister is about the future of vacation rentals in Greece: Will there be further restrictions or not? For the press, it makes for a great story to publish; for others, it could mean financial ruin or seeing their investments go up in flames.
The Minister of the Economy, after the latest changes to Greek law—which included two new taxes on vacation rentals—mentioned “examining” further restrictions to be implemented in the autumn. The prime minister is attempting to strike a balance, trying to keep everyone happy while avoiding taking a definitive stance. However, he will eventually have to reveal his plans at the Thessaloniki exhibition in early September.
One major issue is how the public seems to “take sides”: influenced by social media and news outlets, many people view Airbnb negatively, believing it to be the reason for soaring long-term rents and the difficulty students face in finding accommodation in their towns of study. But this isn’t the full picture. The reality is different, supported by some serious statistics: nearly 250,000 Airbnbs are actively operating in Greece as I write this, reflecting an increase of nearly 20% compared to last year. Vacation rentals also have a significant impact on local economies. For example, in Crete, local markets near large “all-inclusive” hotels are deserted, with minimal daily revenue in restaurants, bars, and shops. Meanwhile, in areas like Chania, where vacation rentals dominate, the local economy is thriving, with businesses flourishing. The tourism season has even extended, thanks in part to digital nomads.
A few issues I have with the local government are as follows:
First, their persistent interference in the Airbnb market and their frequent tinkering with the legal framework is baffling. By the time they get it right, they may have already destroyed the market. People want to make money, but they also want stability. They are not foolish and cannot be strung along with constant legal changes and pre-announced reforms that may or may not come into effect. Who would invest in this market with constant rumors of legal changes circulating since last November? Perhaps it’s time for the Greek government to learn the value of silence and stop pre-announcing measures they may decide on in the future. This uncertainty is bad for business.
Second, their inability to address the issues in the long-term rental market is fueling their frequent involvement with vacation rentals—it’s the easy target, which is why they meddle with it! We have hundreds of thousands of properties locked out of the long-term rental market because there isn’t a foolproof way for owners to receive their rent payments every month. The law heavily favors tenants, leading to significant delays in payouts, with landlords unable to evict them. Then there’s the property damage discovered after tenants move out, leaving owners struggling to fund repairs and re-rent the property. As a result, these properties remain closed.
So, the government—any government, this or the next—should focus on fixing markets that aren’t functioning properly, like the Greek long-term rental market. Correct those issues, and make that market flourish again. It’s the only way. Markets will self-adjust if both are allowed to function effectively. If the government ensures that both markets work well, a large percentage of those closed properties will reopen for rentals—of any kind.
Chances are, the government will move forward with new restrictions.
This could involve raising the first tax level on vacation rentals for private owners, from 15% to 22%.
Or it might involve reducing the maximum number of nights that properties can be rented. Currently, there is no limit, but the law does describe a cap of 90 nights for regions with populations under 10,000, and 60 nights for regions with populations over 10,000.
Or they could implement both. I would really like to meet the person who enforces both measures—they would certainly have some serious nerve. But it would be foolish. The absurdity of these measures lies in the fact that owners can easily circumvent both simply by opening a business for their rental. It takes just a few hours and solves the problem permanently. This is why people continue to invest in vacation rentals despite the constant pre-announcements of new measures.
#greece #tourism #airbnb #vacationrentals