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Short Term Rentals for natural persons

What are the steps I have to follow in order to get into AirBnb, HomeAway, Booking and other digital Short Term Rental platforms?

Short Term Rentals for natural persons

What are the steps I have to follow in order to get into AirBnb, HomeAway, Booking and other digital Short Term Rental platforms?

Expected income and actual income

The first question to ask is:

Should I get involved with short term rentals and platforms like AirBnb and HomeAway?

Before you decide to get into the short term rental business as a host you should first examine the expected benefits and calculate your actual profit. You should take under consideration the rise of tourism in Greece, the increasing trend of AirBnb, Booking, HomeAway and all other digital platforms, as well as the area where the property is located, condition, seasonality, expected occupancy and competition prices.
At the right of this page you can fill in the tabs to easily calculate the expected income from a rental.
You should also take into consideration the initial cost of renovation, the management cost, the various monthly expenses and the risk you are undertaking.

Here you can see a detailed calculation example.

Legislation

If you would like to find out more, you can find the legislation concerning short term rentals and AirBnb type rentals online:

Original Short Term lease article

Amendment of CIRC. No. 1187/2017 (B΄ 4232) Decision of the Governor of A.A.D.E. concerning short-term leasing of immovable property in the context of the economy of sharing.

Amendment of CIRC. No. 1187/2017 (B΄ 4232) Decision of the Governor of A.A.D.E. concerning short-term leasing of immovable property in the context of the economy of sharing.

Submission of a statement of information for the leasing of immovable property using an electronic method of communication via the Internet.

Application of VAT provisions on short-term leasing of real estate in the context of the economy of sharing.

Short-term rental of real estate in the context of the economy of sharing.

Collaboration of E.D with the platforms

Addition of article 39Α to L.4172/2013

Amendment of article 111 of L. 4446/2016

Tax management of short term rentals

Clarifications on short term rentals

Taxation of short term rentals

Authorized license

Υποβολή πληροφοριακών στοιχείων

Taxation of income

  • Step 1

    After the registration of the lease has been made (in the case of a sublease) you will receive a registration Number for it.

  • Step 2

    After the registration of the lease has been made (in the case of a sublease) you will receive a registration Number for it.

  • Step 3

    Then, the Administrator registers the property at the Registry of Short Term Lease Proeperties, kept by the Independent Authority for Public Revenue (www.aade.gr) and you receive the Registration Number for Short Term Residential Rental (Α.Μ.Α.). You can see in detail the guidelines for the registration here.

  • Step 4

    Naturally you will have to create an account in one of the Short Term rental platforms like AirBnb or HomeAway providing the rental’s registration number. In case the property has an authorized license by EOT this has to be stated instead of the rental’s registration number.

  • Step 5

    The next step is to electronically sign the Short Term Residential Rental Agreement for the property with the guests/tenants i.e. make reservations.

Legislation

If you would like to find out more, you can find the legislation concerning short term rentals and AirBnb type rentals online:

Original Short Term lease article

Amendment of CIRC. No. 1187/2017 (B΄ 4232) Decision of the Governor of A.A.D.E. concerning short-term leasing of immovable property in the context of the economy of sharing.

Amendment of CIRC. No. 1187/2017 (B΄ 4232) Decision of the Governor of A.A.D.E. concerning short-term leasing of immovable property in the context of the economy of sharing.

Submission of a statement of information for the leasing of immovable property using an electronic method of communication via the Internet.

Application of VAT provisions on short-term leasing of real estate in the context of the economy of sharing.

Short-term rental of real estate in the context of the economy of sharing.

Collaboration of E.D with the platforms

Addition of article 39Α to L.4172/2013

Amendment of article 111 of L. 4446/2016

Tax management of short term rentals

Clarifications on short term rentals

Taxation of short term rentals

Authorized license

Υποβολή πληροφοριακών στοιχείων

Taxation of income

  • Step 1

    After the registration of the lease has been made (in the case of a sublease) you will receive a registration Number for it.

  • Step 2

    After the registration of the lease has been made (in the case of a sublease) you will receive a registration Number for it.

  • Step 3

    Then, the Administrator registers the property at the Registry of Short Term Lease Proeperties, kept by the Independent Authority for Public Revenue (www.aade.gr) and you receive the Registration Number for Short Term Residential Rental (Α.Μ.Α.). You can see in detail the guidelines for the registration here.

  • Step 4

    Naturally you will have to create an account in one of the Short Term rental platforms like AirBnb or HomeAway providing the rental’s registration number. In case the property has an authorized license by EOT this has to be stated instead of the rental’s registration number.

  • Step 5

    The next step is to electronically sign the Short Term Residential Rental Agreement for the property with the guests/tenants i.e. make reservations.

Obligations

Each month the owner electronically submits (by the 20th of each month) to Α.Α.D.Ε. all the agreements/reservations for the short term rental based on the dates of departure.
Read the guidelines for the submission of Short Term Rental. 

Until the submission date of annual tax income reports the administrator of the property has to finalize the statement for the rental which is the total income from the Short Term rental platforms.

Taxation

The income of a natural person from AirBnb and other online short term rental platforms is taxed as income from real estate.

The tax rate is:
0 – 12.000€ 15%
12.001€ – 35.000€ 35%
35.000€ – 45%
  • Based on the legislation on short term rentals, expenses that equal 5% of the income are deducted from taxation.

Planning

It is very important from the beginning to make an accurate estimation of the income and expenses. Only this way you can proceed to all the right actions and achieve the lowest possible taxation but also maximize the income of the property.

Problems

If you are a natural person occupied with short term rental, it is at your best interest to provide only bed linen and not other additional services (like cleaning, food, meals etc.) If you choose to provide more services, your income will be considered as income from business activity. We should also point out that 12,000 euro is considered by many as the limit for income from short term rentals due to increased taxation.

The Solution

One solution would be to declare the income business activity, either as a freelancer or by forming an IKE company  as that will bear all expenses and amortizations from investments-renovations on the property.

An example of a property in the center of Athens managed by a natural person

Let us consider an amount of 3,000.00€ as initial renovation expenses and an amount of 2,000.00€ as equipment expenses.

We assume a 12month operation period and an average occupancy of 20 days per month (67%).

We assume an average rental price of 70.00€ and roughly estimate a total of 250,00€ as monthly expenses.

The Annual Income will be 17,033.33€ and based on taxation, the residential property tax will be formed at 3,561.61€

However, in order to see the actual profit we have to calculate the results for a period of three years, deducting all actual expenses:

Results for the 1st year: 2.471,56€
Results for the 2nd year: 7.471,55€
Results for the 3rd year: 7.471,55€
Total of 3 years 17.414,67€

Take a look here for an example regarding the management of a residential property as a business activity after establishing an IKE company.

Instructions, Tips, Articles

Read news, tips and instructions for short-term rental of property

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