What changes in 2025
Big changes are on the horizon in the short-term rental market, following the government's decisions to proceed to further regulation, aiming on the one hand to align to the extent possible the obligations of those who offer properties through short-term rental platforms with those who have hotel units or rooms to let and on the other hand to curb oversupply in order to stimulate the long-term rental market.
These changes come at a time of an acute housing crisis, with properties for rent falling and prices soaring as a result of the rapid and often unregulated proliferation of short-term rentals.
The new regulations, according to the government and the relevant ministries, aim to restore balance to the property market by emphasising support for long-term rentals and strengthening safety and quality measures for short-term accommodation. It is worth noting that measures have previously been taken to ensure equal tax treatment of short-term rental property managers with other forms of rental accommodation.
In this context, stricter rules are introduced for the licensing and operation of short-term leases, as well as significant incentives for landlords who choose to switch to long-term leases. These initiatives, although eagerly awaited, should address the issue of increasing pressure on the housing market, in the hope that they will provide a sustainable solution to the crisis that has affected a large number of households.
Despite broad expectations, real estate market participants believe that the new regulations will have a limited impact on the overall housing crisis. Although the government's incentives for landlords to convert their properties from short-term to long-term leases are enhanced, it is estimated that only 10% of properties will switch to the long-term market, at least according to industry representatives.
Given that Airbnb in Greece is approaching 120,000, this translates to around 12,000 to 15,000 properties returning to the traditional rental market.
According to the government's announcements at the 88th Thessaloniki International Fair (TIF), but also the specification of these by the relevant ministries, the new regulations include significant changes, with winners and losers owners, depending on the direction they choose.
These actions include:
1. Limitation of new short-term leases.
2. Incentives for long-term leasing. The measure applies only to properties owned by individuals and not by companies. The estimated loss of revenue for the State would be around EUR 3 million in 2025 and EUR 13 million per year for the years 2026-2028.
3. Strict requirements for short-term rentals: short-term rental accommodation will be subject to strict minimum requirements for its operation, including a floor area threshold, a ban on the use of basements, mandatory fire safety and safety certifications by qualified engineers. The requirements also include the obligation for civil liability certification, installation of security systems, fire extinguishing systems, smoke detectors and regular disinfection of the accommodation before each new lease.
4. Stricter requirements for apartment buildings: Multifamily buildings will require the elevator to be certified for commercial use, and there will be restrictions on the number of available accommodations that can be made available for short-term rentals.
The new regulations are expected to come into force before the start of the 2025 summer season, setting new standards for short-term rentals in Greece and creating a more balanced and secure market. While these changes aim to improve the quality of accommodation and strengthen long-term rentals, their ultimate impact on the housing crisis will depend on the effectiveness of their implementation and the ability of the market to adapt to the new conditions.
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