The building boom of recent decades combined with migration and de-urbanization resulted in an increase of vacant apartments in cities and the oversupply of rental properties for lease at low rates. Difficulty in leasing plus overtaxation of real estate forced private owners to either sell or switch to new forms of exploitation, including short-term rental of properties to tourists via the internet. With the use of digital platforms, the most famous of which being Airbnb, hundreds of individuals in Greece are able to lease apartment rooms to luxurious villas to tourists for limited periods of time.
Until recently, Greece had no legal framework for short-term property leases. Only businesses (hotels, guest houses, rooms-to-let businesses, etc.) have the legal right to lease accommodation to tourists as a profession. Greek law specifically forbids the agreed duration of a property lease to be less than three years (art. 2, paragraph. 1 of L. 1703/1987). Even if a lease period of less than three years is set with a relative term in the lease agreement, it is invalid. Therefore, individuals who wished to lease a property to tourists for a limited period could not be legally covered as lessors. At the same time, because they were unable to declare such a lease to the Ministry of Finance and, therefore, their income therefrom, the state budget was deprived of tax revenue.
In order for the State to tax the income of individuals from renting housing to tourists, the Greek parliament passed Law no. 4446/2016 (Government Gazette A 240 / 12.22.2016). Article 111 of said law is titled "Arrangements for short-term rental of properties in the context of the sharing economy." Sharing economy means “any model where mainly digital platforms create an open market for the temporary use of goods or services often provided by individuals."
The law sets a series of strict conditions which must be met cumulatively in order for property rental to be lawful. These conditions prevent the lessor from acquiring a commercial capacity through the provision of organized accommodation services.
First, individual (natural persons), lessors, and sub-lessors must be registered in the "Short-Term Property Lease Register" of the Ministry of Finance. Their registry number must accompany each rental listing in any means of promotion, digital or not. Second, any income beneficiary may lease up to two properties. Unless the above conditions are met, the Ministries of Tourism and Finance will impose an administrative fine of five thousand euros (5.000 €).
Neither property may be leased for more than sixty (60) days per calendar year in islands of fewer ten thousand (10,000) inhabitants and for no more than ninety (90) days in any other region, unless the lessor's income from all properties leased in this way is less than twelve thousand euros (€ 12.000) per year.
The law considers as property: a) apartments, b) detached houses, except for houses that are classified as such due to the abolition of the horizontal property establishment, and c) any other form of dwelling.
The property must: a) have a minimum size of nine (9) square meters, b) have natural lighting, ventilation, and heating, c) be furnished and contain at least linens, and d) have received all necessary building permits or have been maintained in accordance with the provisions of l. 3843/2010 (A 62) or subject to the provisions of article 24 of l. 4014/2011 (A 209).
Inspections for any infringements of the above conditions are carried out by mixed inspection teams, consisting of employees of the Ministries of Finance and Tourism.
These provisions shall apply from 01.02.2017.