Clarifications regarding the tax treatment of short-term real estate leases, starting from 1.1.2024 onwards, are provided by the Independent Public Revenue Authority, with the aim of facilitating taxpayers in the proper fulfillment of their obligations.
With a circular from the commander of AADE, Giorgos Pitsilis, both general issues and more specific cases of short-term leasing are clarified. Particularly :
I. Natural Persons
The income they obtain from the short-term rental of real estate is considered income from:
- real estate and is exempt from VAT, as long as the short-term lease concerns up to two (2) properties
- business activity and is subject to a reduced VAT rate of 13%, as long as the short-term lease concerns three (3) properties or more.
In order for the income of natural persons to fall under the corresponding category, the following are taken into account:
- the number of Property Registry Numbers (AMA) that have been registered, which is not necessarily the same as the number of properties. In cases of separate use of rooms in the same property, more AMAs correspond. For example, if three (3) rooms are available separately in the same apartment, with different AMAs, the respective incomes will be treated as income from business activity and will be charged with VAT of 13%.
- the intention to exploit these properties, which is evidenced by their registration in the Register of Short-term Accommodation Properties, without considering the acquisition or non-acquisition of income from their exploitation.
II Legal Entities
The income they obtain from the short-term rental of properties is taxed as income from business activity in any case, regardless of the number of properties from which it comes and is subject to a reduced VAT rate of 13%.
Furthermore, it is clarified that the persons who appear as beneficiaries of income in the Register of Short-term Accommodation Properties, i.e. natural persons who operate more than two properties and legal persons regardless of the number of properties, are required to:
- make a declaration of the initiation or change of KAD, within thirty (30) days from the issuance of the circular. The declaration can be submitted within the same deadline and those natural persons who should have submitted it on an earlier date, referring back to the actual start/change date,
- pay a temporary resident fee,
- include a climate crisis resilience fee (TAKK) when issuing the special data – collection receipts.
However, it is emphasized that natural persons who operate up to two (2) properties are required to include TAKK when issuing the special data – collection receipts.
It is noted that the above concerns leases that are considered short-term, in accordance with article 111 of Law 4446/2016, i.e. whose duration does not exceed 59 days. Th. Pap.
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