Airbnb: Restrictions and What is Changing in Greece [chart] - Economic Courier - ot.gr

“You either die a hero or live long enough to see yourself become the villain.” This quote from the movie “The Dark Knight” perfectly reflects the current state of the company Airbnb. This service is facing numerous challenges in Europe, similar to those it has already experienced in the USA. Its massive success has turned into a double-edged sword, and now it is under threat from new laws coming from Europe.

Returning to old questions

When Airbnb launched in Europe, it was met with enthusiasm similar to that in the United States. In the beginning, it was a website where people could share their homes, allowing travelers to not just rent a hotel room, but to spend time in unique and interesting places. This didn't last long before users realized they could turn their apartments into a source of stable income.

Discontent among local residents

Suddenly, investors began to buy up real estate in the most popular rental areas in the U.S. en masse, intending to rent them out as apartments through Airbnb, thereby earning passive income. This phenomenon has led to rental prices skyrocketing at an incredible pace, making life difficult for local residents. It not only reduced housing availability and impacted neighborhood communities but also generated numerous conflicts related to loud parties and frequent tenant turnover. As a result, many governments in Europe decided to intervene.

Lack of affordable housing

The main tourist destinations in Europe, such as Barcelona and Paris, have only emerged thanks to the local residents who have lived there for many years and created unique communities. It is not uncommon to find locals who continue to live in the same neighborhoods where they grew up. However, the rapid expansion of Airbnb has threatened this stability. Rental prices have become unaffordable for young people. Locals cannot compete with foreign investors who buy properties, staying in them for just a few months a year, while renting them out through Airbnb for the rest of the time.

Change in legislation

The problems that Airbnb creates in the most popular tourist destinations in Europe have long been known. The emergence of these issues has prompted cities like Barcelona and Lisbon to implement a licensing system. Property owners now have to apply and obtain permits from local authorities to operate short-term rentals. Meanwhile, the "Golden Visa" programs in Spain and Portugal allowed those who could invest 500,000 euros to apply for automatic residency confirmation, which has encouraged many Americans looking to achieve this through purchasing properties for Airbnb.

New restrictions

Currently, the "Golden Visa" program is suspended in Portugal, and the issuance of licenses for short-term rentals in the cities of Lisbon and Porto is no longer taking place. In Barcelona, new licenses for tourist apartments have also been halted, meaning that new short-term rentals in the city are no longer permitted. This ban applies to both owners and tenants, who may face fines of up to10,000 eurosfor violations.

Other restrictions

In London, there is a limit on the number of days that any individual can spend in short-term rental.90 days a yearIn Scotland and Northern Ireland, licensing requirements have been introduced; owners wishing to rent out their second homes must obtain approval from local authorities. In Italy, Rome requires mandatory registration and the application of tax on income from short-term rentals.21%and43%depending on income.

Return to normal

Despite all these bills and restrictions across Europe, the short-term rental market is not dying. Services like Airbnb often stay ahead of the legislative process, finding ways to operate even in a regulated environment. Given the significant revenue generated by this sector, it is unlikely that any government system will be able to completely "shut down" this industry.

The situation in Greece

Starting from January 2024, income from short-term rentals of three or more properties in Greece will be subject to VAT at the rate of13%This means that owners earning income from short-term rentals will need to register their activities and go through the taxation process, including opening accounts with the tax service and maintaining reporting.

Forecast for the future

In the coming months, the future of short-term rentals looks uncertain. Business owners are divided into two groups: some welcome the introduction of VAT only for those with three properties or more, while others are concerned that this will hit the middle-class owners who invest their funds in real estate to supplement their budgets. The existing system exempts owners from VAT and imposes minimal tax rates on income, making them more attractive. Thus, we are witnessing processes that could radically change the short-term rental market at both national and international levels.