Overtourism: Greece targets short-term rentals and imposes port tax
Greek Prime Minister Kyriakos Mitsotakis has announced measures to tackle the negative impact of overtourism as tourists continue to arrive in record numbers in the post-pandemic era.
The government is “very concerned” about the influx of tourists during certain months of the year and will start charging fees, Mitsotakis said Saturday during his annual speech at the Thessaloniki International Fair. The government will also increase climate-crisis-related taxes on accommodation.
Greece welcomed a record 36.1 million tourists in 2023, while arrivals rose 16% to 11.6 million in the first half of 2024, according to the latest figures. data from the Bank of Greece. Tourism accounts for about 20% of the economy, making it vital to the health of the nation.
The country will also expand its so-called “Golden Visa” program for investors willing to invest at least 250,000 euros ($277,000) in local startups. Foreigners were previously required to buy real estate to get the visa.
All passengers arriving at Greek ports will be charged a fee, which will be higher on the popular tourist islands of Santorini and Mykonos. Accommodation taxes will also be increased between April and October, with the revenue going to local communities.
Mitsotakis reiterated concerns that some parts of Greece are facing a problem of “overtourism.” In an interview with Bloomberg in June, he announced plans cruise ship restrictions Visit the country’s most famous islands by 2025.
Short-term rentals have been blamed for the country’s housing crisis, which along with high consumer prices has become a focus of recent political debate.
The government will ban all new short-term rentals for at least a year in three major areas of Athens, Mitsotakis said. Property owners who change their leases from short-term to long-term will not have to pay rental tax for three years, as will owners who decide to rent out their homes instead of keeping them on the market, he said.
Vacation home rentals increased by an average of 28% annually from 2019 to 2023, while short-term rentals doubled over the same period. Meanwhile, hotel room prices increased by just 3.5% over the same period, according to data released in Grant Thornton Report for the country’s Hotel Chamber of Commerce announced this week.
The government will also launch a new €2 billion scheme to reduce interest costs on mortgage loans.
Other measures
On Saturday, Mitsotakis also unveiled a number of measures aimed at reducing the cost of living, including a 1 percentage point reduction in social insurance contributions by 2025 instead of the previous plan of a 0.5 point cut.
The Prime Minister also stated, among other things:
- About 2 million pensions will increase from 2.2% to 2.5% from January 1.
- Minimum wage increase starting April
- Increase public sector wages, especially for doctors, firefighters and workers in the military and police forces.
- Many tax breaks help self-employed people, farmers and others
- Changes to unemployment benefits
“I don’t have a bag of reckless spending today,” he said. “Our spending for 2025 is well balanced.”
Greece has pledged to achieve a primary budget surplus – a measure of revenue minus spending excluding interest payments – of 2.1% of GDP for both 2024 and 2025, up from 1.9% in 2023.
Fiscal discipline is one of the most important criteria for financial markets and the country’s recent prudent budget path is one of the driving forces behind rating agencies’ return to Greece’s credit rating. investment area in 2023 after 13 years in junk status.
“A healthy and rising primary surplus, coupled with solid nominal growth, will facilitate a further significant reduction in public debt-to-GDP, which is expected to fall below 140% in 2027, from 161.9% in 2023,” DBRS Morningstar said on Friday.
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