VAT and Digital Transaction Duty on short-term and long-term rentals in Greece

VAT and Digital Transaction Duty on short-term and long-term rentals in Greece

Quick answer

Leasing property in Greece is VAT-exempt by default. Long-term residential leases stay exempt unless hotel-type services are provided. Short-term leases (under 60 days) by an individual stay exempt for up to two properties with no extra services; three or more properties, or any hospitality services, bring the activity into VAT at 13%. Since 1 January 2024 any company carrying on short-term rental is a VAT-registered accommodation business at 13%, whatever the number of properties or services. VAT registration adds compliance but allows recovery of input VAT on costs. Commercial leases outside VAT bear Digital Transaction Duty at 3.6%; residential leases do not.

Digital Transaction Duty

The Digital Transaction Duty replaced stamp duty on 1 December 2024. For leases it applies to commercial leases that are not subject to VAT, at 3.6% of the agreed rent, on substantially the same mechanism as the former stamp duty. Residential leases are outside its scope.

The VAT framework for property leases

The VAT treatment turns on four variables: the length of the lease, the number of leases, the services supplied to occupants, and whether the lessor is an individual or a company. The analysis distinguishes long-term from short-term leases and, within each, individual from corporate lessors.

Long-term residential leases are exempt where the lessor merely grants use and enjoyment of the property, even furnished and with linen. If the lessor adds services comparable to a hotel — reception, regular cleaning, catering, transport, laundry — the arrangement is recharacterised as a supply of accommodation services and becomes subject to VAT at 13%. This applies to individuals and companies alike.

Short-term residential leases are leases of under 60 days where only accommodation and linen are provided.

Short-term rentals by individuals

Situation	VAT position	Income classification
Up to two properties, accommodation and linen only	Outside VAT, no registration	Real estate income
Up to two properties, hotel-type services provided	Within VAT at 13%	Business income
Three or more properties	Automatically a business, VAT at 13%, commencement of activity, books	Business income

A property for these purposes means an apartment, house or any building with structural and functional autonomy, and also a room within a dwelling if it has been separately registered with its own Property Registration Number (AMA). The count is therefore of AMAs, not of buildings.

Short-term rentals by companies

From 1 January 2024 the rule for legal entities is simple: any company carrying on short-term rental activity is treated as running a VATable accommodation business, regardless of how many properties it lets and regardless of services. It must register for VAT, charge 13% on its rentals, keep accounting records and meet all VAT compliance obligations.

Registry and compliance obligations for all short-term operators

Every short-term rental operator, individual or company, must register each property in the Short-Term Accommodation Registry, obtain an AMA, file Short-Term Stay Declarations and comply with the reporting rules, whether the income is treated as real estate income or business income.

Where the activity is a business — every company, and individuals with three or more properties — additional obligations arise:

• periodic VAT returns and myDATA electronic reporting;
• accounting books;
• a Visitor’s Accommodation Fee of 0.5% of turnover, which municipalities may raise to 0.75%;
• a Climate Crisis Resilience Fee charged per unit per night, varying with the type and classification of the accommodation and the season.

Input VAT recovery: the upside of VAT registration

Operating within VAT is not only a cost. A VAT-registered lessor can recover input VAT on expenses connected with the taxable activity — operating costs, maintenance, professional fees and renovation works — subject to the ordinary deduction rules. For an owner outside VAT, the 24% VAT on those costs is simply an irrecoverable expense.

The value of recovery depends on how much VAT the owner incurs. If a new property is bought subject to 24% VAT rather than under the VAT suspension regime, recovery of that VAT through a taxable rental business is a major benefit. If the purchase is made under the suspension regime at 3.09% transfer tax, recovery is relevant mainly to ongoing operating and refurbishment costs.

Frequently asked questions

Is Airbnb income subject to VAT in Greece? For an individual letting one or two properties with only accommodation and linen, no. For three or more properties, or where hotel-type services are offered, yes at 13%. For a company, always yes at 13%.

What is the VAT rate on short-term accommodation in Greece? The reduced rate of 13%.

Does a residential lease bear Digital Transaction Duty? No. The 3.6% duty applies to commercial leases outside VAT.

Can a property company recover VAT on renovation costs? Yes, if it carries on a VATable rental activity, subject to the normal deduction rules.

 

* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.