Even before Article 111 of Law 4446/2016 was put into practical effect, by which the terms and conditions for the short-term letting of property through digital sharing platforms (Airbnb or others) were determined for the first time, the Greek Parliament passed in May of 2017 Law 4472/2017, introducing significant amendments to the specific article.
■ The most important concerns the determination — now by joint ministerial decision of the Ministers of Economy and Development, Finance and Tourism — of the geographical areas where the restrictions that applied will remain in force, concerning the rental limit of 90 or 60 days (for islands with up to 10,000 inhabitants), short-term letting of up to 2 properties per VAT number, as well as the income threshold of 12,000 even if we have exceeded the 90 or 60 days of rental in the relevant tax year. Until the above joint ministerial decision is issued, none of the above restrictions applies.
■ The concept of the property manager is defined and it is now possible for them to take on the process of posting the property on digital platforms for the purpose of short-term letting, not only a natural person but also a legal person or any other legal entity.
■ The conditions that applied for inclusion in the Short-Term Stay Register are removed, and these concerned the minimum area (9 sq.m.) of the property as well as the obligation that the building be lawful (note: care: the removal of this latter condition concerning the lawfulness of the building may no longer create an obstacle to inclusion in the register, however it should concern property managers because legal claims may be raised by tenants in the event of any possible damage to them during their stay).
DEFINITION
- 1. Short-term letting shall mean lettings carried out within the framework of the ‘sharing economy’, namely property lettings concluded through digital platforms for a specific period of time, shorter than one year, and where no other services are provided other than accommodation and the provision of bed linen (hereinafter ‘Short-Term Letting’). Specifically for the case of ‘Short-Term Letting’, ‘digital platforms’ means those that provide specialised tools for concluding the letting electronically and are not limited to displaying the ‘property’. Therefore, any short-term lettings concluded privately and not through a platform are not subject to the specific provisions and are treated as ordinary civil lettings, unless they are accompanied by ancillary services, in which case they are treated as business activity (POL.1187/2017).
- 2. Property Manager means the natural or legal person or any kind of legal entity that undertakes the process of posting a property on digital platforms for the purpose of its Short-Term Letting and generally cares for the short-term letting of the property. A Property Manager may be: a) the owner of the property b) the usufructuary c) the sub-lessor d) a third party, including exclusively the following cases: the guardian of an estate under administration the liquidator of an estate the executor of a will the bankruptcy trustee the provisional administrator the custodian the guardian or curator or judicial proxy or parent exercising parental responsibility, as the case may be.
CONDITIONS
- 1. The property manager must be registered in the ‘Register of Short-Term Stay Properties’ kept by the Independent Authority for Public Revenue (A.A.D.E.).
- 2. The registration number in the Register of Short-Term Stay Properties must necessarily accompany the posting of the property, in a prominent place, on digital platforms, as well as in any means of promotion.
Registration in the Register of Short-Term Stay Properties is carried out for each property let.
By a joint decision of the Ministers of Economy and Development, Finance and Tourism, for reasons relating to the protection of housing, geographical areas may be designated where restrictions on the availability of properties for short-term letting shall apply as follows: a. Short-term letting of more than two (2) properties per tax identification number of income beneficiary shall not be permitted. b. The letting of each property shall not exceed ninety (90) days per calendar year and, for islands with fewer than ten thousand (10.000) inhabitants, sixty (60) days per calendar year. Exceeding the duration of the previous subparagraph is permitted provided that the total income of the lessor or sub-lessor, from all the properties he has available for letting or sub-letting, does not exceed twelve thousand (12.000) euro in the relevant tax year.
PENALTIES AND FINES
- 1. In the event of non-compliance with the above conditions, an independent administrative fine of five thousand (5.000) euro shall be imposed on property managers. The fine constitutes public revenue and is imposed and collected in accordance with the provisions of the C.E.D.E. by A.A.D.E. From the ascertainment of the infringement, the short-term letting property manager is obliged within fifteen (15) calendar days to take the necessary compliance actions. In the event of repeated non-compliance with the above conditions, within one year from the issue of the fine-imposition act, this fine is imposed at double the amount and in the case of each subsequent same infringement, at four times the amount initially imposed.
- 2. In the event of failure to submit or submission of an inaccurate Short-Term Stay Declaration, a fine equal to twice the rent as shown on the digital platform on the day of the inspection shall be imposed on the property manager.
- 3. In the event of late submission of a Short-Term Stay Declaration, an independent administrative fine of one hundred (100) euro shall be imposed.
- 4. In the event that the digital platform fails to respond to A.A.D.E.’s request concerning the provision of any information necessary for identifying property managers as well as the properties posted on them, fines of 250 or 500 euro shall be imposed depending on whether simplified or full accounting standards must be kept.
For the implementation of the provisions concerning short-term letting, inspections may also be carried out by mixed inspection teams consisting of employees of A.A.D.E. and the Ministry of Tourism. In addition, assistance may be requested from the Financial Police.
OBLIGATIONS
- 1. Where the owner of the property or the possessor or the usufructuary or the sub-lessor entrusts a third party with the management of his property for the purpose of short-term letting, he is obliged to submit a Real Estate Lease Information Statement in which he shall enter the details of the property manager. In the event of failure to submit this, he himself shall be deemed the property manager .
- 2. In the event of co-ownership of a property, where one of the co-owners is the property manager, the remaining co-owners are not obliged to submit a Real Estate Lease Information Statement.
- 3. Where the owner of the property or the possessor or the usufructuary or the sub-lessor lets a property with a right of sub-letting, he remains obliged to submit the Real Estate Lease Information Statement
- 4. In cases where property managers hold a Special Operating Mark (E.S.L ), they are not obliged to register in the Register of Short-Term Stay Properties, but they are obliged to state, in a prominent place, the number of the Special Operating Mark (E.S.L) when posting the property on digital platforms, as well as in any means of promotion.
- 5. A property manager who does not hold a Special Operating Mark (E.S.L.) is obliged to submit a Short-Term Stay Declaration, in an electronic application to be created by A.A.D.E., and does not submit Real Estate Lease Information Statements.
6.The same obligation to submit a Short-Term Stay Declaration also applies to owners of properties which bear the characteristics and specifications of tourist furnished villas, and who may let them as a whole and not in parts, to natural persons, without the right of further sub-letting, for a period of at least one week and not exceeding three (3) months in total per year, with successive letting beyond three months in the same year being prohibited.
INCOME TAXATION
- 1. Income obtained by natural persons from the short-term letting of a property in the sharing economy is considered income from immovable property Ar, 39A Law 4172/2013 (POL.1069/2015 & 1112/2017) provided that the properties are let furnished without the provision of any service other than the provision of bed linen. In the event that any other services are provided, this income constitutes income from business activity
- 2. Income obtained by legal persons or legal entities from the short-term letting of a property in the sharing economy, as defined in the previous paragraph, is considered income from immovable property.
The above apply to income obtained from the tax year beginning on 1.1.2017 and thereafter.
V.A.T. Income obtained from the short-term letting of a property in the sharing economy is exempt from V.A.T. (POL.1059/2018).
Short-Term Stay Register POL.1170/2018
The commencement of the Short-Term Stay Register application is on 30 August.
‘Short-Term Stay Declarations’ are submitted by the 20 of the following month after the date on which the tenant departs from the ‘Property’. In the event of cancellation of the short-term letting and where, under the cancellation policy, payment of an amount of rent by the tenant is предусмотрed, an initial ‘Short-Term Stay Declaration’ is submitted by the 20 of the following month after the cancellation.
Persons liable who have concluded short-term lettings from 1.1.2018 and until the commencement of operation of the application of the ‘Register of Short-Term Stay Properties’ shall be registered in the above ‘Register’ by 30 November 2018. In addition, they shall submit a consolidated, per property, ‘Short-Term Stay Declaration’ by 30 November 2018, in which all short-term lettings concluded from 1.1.2018 up to and including the date of commencement of the application shall be included. Specifically for persons who from 1.1.2018 and until the commencement of operation of the application of the ‘Register of Short-Term Stay Properties’ have concluded short-term lettings within the sharing economy and are unable to register in it, they need only declare the income they obtained from the short-term letting of sharing-economy properties, separately and in aggregate, per property, in the income tax return forms for the tax year 2018.
Click here and download the AADE frequently asked questions and answers on short-term property lettings.
Click here and download the AADE user manual for short-term property lettings.
