The government has announced new measures to be implemented immediately concerning short-term rentals. These measures are a continuation of actions being taken in major cities both within and outside Europe, which are adopting increasingly strict regulations and restrictions on short-term rentals, primarily due to the social and economic impacts believed to affect the local population and housing.
The main reasons many cities oppose the rental of properties through short-term leases are the rising property prices and rents, as well as the housing crisis faced by local residents due to the increasing number of apartments being rented out as short-term rentals. Or at least, that seems to be the case.
Other reasons include the disruption of the social fabric, increased noise, and a lack of respect for the rules of the apartment building or neighbourhood by tourists who wish to enjoy the city they are in, often without considering some basic factors.
Cities that have imposed restrictions on short-term rentals
Some cities that have imposed either restrictions or outright bans on short-term rentals include:
- Barcelona: The issuance of new short-term rental licenses has been banned and existing ones have been limited. Short-term rentals are prohibited in the city centre, and there is strict enforcement against those who violate the regulations. Last June, it was announced that from November 2028, when the last licenses expire, all rentals to tourists will be prohibited.
- Amsterdam: Since July 2020, short-term rentals are limited to 30 days per year per property, with rentals not permitted in certain areas, and a license is required to register the property on platforms like Airbnb.
- Paris: Property owners can rent out their primary residences for up to 120 days a year. The short-term rental of secondary residences is illegal without a special permit, and local authorities have increased inspections for violations. Since May 2023, there have been apartments in Paris where the construction of new tourist accommodations has been banned.
- Berlin: Strict limits on short-term rentals have been imposed to protect the supply of affordable housing and has restricted short-term rentals to 90 days per year per property. Owners must obtain a special permit to rent out their properties, and renting without a permit can lead to fines.
- Dublin: A permit for short-term rentals of properties that are not primary residences is required. For primary residences, owners are allowed to rent for 90 days per year per property.
- Vienna: Short-term rentals in certain apartment buildings have been banned and short-term rentals have been restricted to 90 days per year per property.
- Lisbon: A suspension of the issuance of new short-term rental licenses in certain areas of the city has been announced, while considering a complete ban in specific tourist neighbourhoods.
- London: Short-term rentals have been restricted to 90 days per year per property.
What are the new measures?
In a previous article, we analysed the new announcements regarding taxation and new fees for short-term rentals (you can see more information here).
Now, following the chain reactions among countries regarding measures for short-term rentals, the following have been announced:
New, increased fees on contracts via platforms. The increased fees relate to the Climate Crisis Resilience Fee and the Transient Occupancy Fee. The Climate Crisis Resilience Fee (CCRF), or Environmental Fee (formerly the Accommodation Tax), for the low season increases from €0.50 to €2.00, while for the high season, it rises from €1.50 to €8.00. For single-family homes over 80 square metres, for each overnight stay during the high season, the Climate Crisis Performance Fee increases from €10 to €15. It is noted that the period during which the low fee applies (November to February) is extended by one month to include March.
The Transient Occupancy Fee is set by each municipality at a rate of 0.5% or 0.75% for stays of less than six months, depending on the designated residential areas and tourism infrastructure available.
Ban on New Rentals in Three Central Districts of Athens. As mentioned earlier, this is a measure that follows decisions made in many European and other cities. In Athens, the ban will come into effect from 1st January 2025 for at least one year, with the possibility of extension, affecting the three central districts of the capital. These three districts of the Municipality of Athens are:
- 1st District: Includes the centre of Athens with the well-known “commercial triangle,” namely Syntagma – Omonia – Monastiraki, Kolonaki, Plaka, Koukaki, Exarchia, Ilisia, and Neapolis.
- 2nd District: Includes Pagkrati, Agios Artemios, Prophet Elias, Mets, Zappeio, and the residences around Kallimarmaro and the A’ cemetery.
- 3rd District: Includes Thiseio, Ano and Kato Petralona, Rouf, Elaiona, Keramikos, Metaxourgeio, Votanikos, and the Markoni area.
As is clear, these are areas with increased tourist traffic, either due to historical monuments or the many entertainment options, such as dining establishments, bars, cafes, etc.
Establishment of strict requirements for property operations. Among the other measures, significant emphasis will now be placed on specifications such as the size of the property, mandatory installation of fire safety measures (e.g., smoke detectors), safety certifications from specialised engineers, as well as liability insurance certification, elevator certification for professional use for properties in apartment buildings, and the limitation of the number of apartments available for short-term rental, along with the prohibition of using basement areas, etc. These specific specifications are under consultation within the new Special Spatial Framework for Tourism.
Specifically, the certification of professional elevator use is an unfounded measure, as we are referring to apartment elevators within inhabited buildings and not some commercial buildings.
What studies contributed to the need for new measures and how accurate are they?
Grant Thornton, in collaboration with the Hellenic Chamber of Hotels, the Hellenic Statistical Authority, the Institute of the Association of Greek Tourist Enterprises, and the Ministry of Environment and Energy, collected data and compared prices between short-term and long-term rentals. The final picture presented indicates that in Greece there are more than 190,000 properties, and the number of beds available through short-term rentals in the Athens area is nearly double that of hotels.
According to the study conducted by the aforementioned company, short-term rentals are more expensive by 200% to 900% compared to long-term rentals! These percentages arise from comparing prices per square metre, which, as we will see below, is not a valid method of calculation.
We all know that studies can diverge from actual facts, as other parameters must be taken into account, which, especially in this case, have been overlooked. For example, properties listed on platforms like Airbnb include a range of costs that either do not exist or are not accounted for in the rents, such as fixed expenses (utility bills, communal fees if in an apartment building, cleaning costs, various public fees, the commission of the respective platform hosting the property, etc.).
In light of the above, the percentage presented by industry professionals indicating that a property may be more expensive – and only if the property in question meets high standards – is 30-40%, not 200-900% as stated in the study.
Additionally, the occupancy rate of short-term rental properties ranges from 10% to 16% for the months from October to March, while for the high season, it ranges from 23% to 59%. Therefore, it is evident that the revenue generated from short-term rentals is not stable; consequently, profits cannot be as high as some attempt to portray.
Independent Authority for Public Revenue
The only competent authority that can provide a complete picture and data regarding the number of properties, the income of owners generated from short-term rentals, and the revenue of the state from the fees paid by these owners is the Independent Authority for Public Revenue. Let us not forget that for the initiation, promotion, and operation of a property on platforms like Airbnb, registration (Property Registration Number) is necessary, and commissions and bookings occur automatically through the platform itself.
According to the IAPR, of the approximately 10 million properties in the country, only 100,000 are available through Airbnb and other short-term rental platforms for periods not exceeding 90 days per year. Of the 10 million properties, 900,000 are closed, and the reasons vary:
- The rental tax, which with the new measures (and following a proposal from the Panhellenic Federation of Property Owners), is suspended for three years if a property is rented out long-term as a primary residence.
- The renunciation of inheritance by individuals due to debts of the deceased and other obligations of the inheritance.
- Properties owned by the Church, with 48% of these in Athens and Piraeus and 24% in Thessaloniki (approximately 13,300 property registrations were recorded in the Real Estate Management Subsystem maintained by the Archdiocese).
- Properties owned by the state (in 2023, 358,000 properties were declared, a number that is completely fictitious, as many ministries have declared the same property as their own).
What conclusions can be drawn?
It is clear that one of the significant problems we face is the housing crisis, not only in the capital or Greece generally but in all countries within and outside Europe. The availability of properties through short-term rental platforms has simply contributed to, rather than determined, the increase in rents, to the point where a 40-50 square metre apartment from the 1970s, in a student neighbourhood like Pagkrati or Ilisia, is available for long-term rental at €500 or €600.
However, this is merely a small part of the problem, as the skyrocketing rents are primarily due to the thousands of closed apartments, the high cost of constructing new properties, and the freeze on constructions in previous years, first due to the crisis, then due to the pandemic, and the rising inflation, among others.
On the other hand, the new increase in measures that were initially implemented just a few months earlier brings despair to owners of smaller properties. According to the Head of Airbnb for Southern Europe, in our country, a property is rented out through short-term leasing for an average of only 24 days per year, with the profits from stays being reinvested back into the property for maintenance needs.
Airbnb, for its part, acknowledges the problem of the lack of available long-term rental housing and proposes collaboration with the Greek government. The platform has been cooperating with the IAPR since April 2021, providing all registration data.
This means that anything declared by property owners and managers is taxed accordingly. Short-term rental is a sector that generates significant revenue for the state; therefore, the measures taken periodically should not create upheaval for owners and visitors.
In conclusion, short-term rental is a driving force for the resumption of all types of construction work, whether it concerns the erection of new buildings or the renovation of older ones. It has proven to be a means of boosting the economy, contributing to the national economy, increasing tourism in areas lacking infrastructure for hosting visitors and enhancing healthy business activity.
Developments in the sector are expected to continue, as cities seek sustainable solutions for managing short-term rentals.
By choosing Sparrow for the management of your property, you can rest assured of the immediate execution of every new directive and compliance with all rules set by the platforms.
