As Airbnb is already part of our lives, and it seems that it will be for a long while, it would be wise to know the absolute basics. Airbnb has created positive conditions for some (increased income) but also negative for some others (increased rents).
Here are ten (10) basic things that we need to know in regard to the short-term lease of properties of this type.
According to the Independent Inland Revenue Authority:
- A property lease is considered short-term, in the context of the sharing economy, when it is concluded through digital platforms for a specific period, for less than a year, and when no other services are provided, except accommodation and bed linen (hereinafter “Short-term Lease“).
Especially, for the case of the “Short-term Lease”, “digital platforms” are understood as those that provide specialized tools for finalizing the lease electronically and are not limited to the display of the “property”.
Therefore, any short-term leases, concluded privately and not through a platform, are not subject to the specific provisions and are treated as common civil leases, unless they are accompanied by ancillary services, in which case they are treated as a business activity.
- In practice, these leases are declared with the “Property Lease Information Statement”. If someone lets out their property on a “Short-term Lease”, but does not do so via digital platforms, they do not need to register on the Short-Term Property Register.
- No other restrictions apply except for the rental period of less than a year and the exclusive provision of bed linen, unless a new arrangement is made for the future, by a joint decision of the Ministers of Economy and Development, Finance and Tourism, as provided for in par. 8 of article 111 of the 4446/2016, as applicable.
- The income obtained from the Short-term Lease of properties, in the context of the sharing economy, is considered income from real estate and is taxed in a specific way. Specifically, and with regard to legal persons and legal entities of a profit-making nature, this income is taxed according to the provisions of par. 2 of article 47 of Law 4172/2013, as the income in question is considered income from business activity. Consequently, the provisions of articles 22 and 23 of the same above-mentioned law apply to the expenses incurred and related to the properties, which are leased in the context of the sharing economy. As far as non-profit legal entities are concerned, the income in question is considered income from business activity based on the aforementioned law, while with regard to the deduction of expenses, the provisions of par. b’ or c’ of par. 3 of article 39 of Law 4172/2013, depending on whether it is a public law legal entity (p.l.l.e.)/ an institution or a private law legal entity (p.l.l.e.), respectively.
- Sanctions are not imposed on those landlords who, compulsorily, re-submit the “Property Lease Information Statement“, for the cases where the sublessor of the property wishes to register this property in the “Register of Short-Term Accommodation Properties”.
- The income from Short Term Lease is not subject to VAT.
- The “Statement on Short-Term Stay” is submitted until the 20th of the following month from the day of the tenant’s departure from the “Property”.
- The “Statement on Short-Term Stay” may be amended until February 28 of the year of submission of income tax return and before the finalization of the “Short-Term Stay Property Registry”.
- In case of cancellation of a short-term rental and where, under the cancellation policy, payment of an amount of the rent by the tenant is provided for, an initial “Statement on Short-Term Stay” is submitted until the 20th of the month following the cancellation.
- The “Short-Term Stay Property Registry” is finalized no later than February 28 of the year of submission of income tax returns.
Achilleas Karapatakis – External associate