Renting out your Greek property is an effective way to make an extra income. However, there are rules and regulations to be aware of before you start renting out to holidaymakers.
So, you’ve purchased a home in Greece. (Or you are thinking about it). Maybe it is a luxury five-bedroom villa with a swimming pool in Mykonos, or a two-bedroom near the sea in Crete, or an apartment in Athens. You plan to spend all of August there, and maybe drop in at Easter. But what happens to your property during all the other months of the year? It feels like a waste for it to just be unoccupied. You come up with what feels like a simple, genius plan. You’ll rent the property out as a holiday home while you are not there.
But before you get too excited, here are some things to be aware of when renting out a property in Greece.
1. An EOT licence is required for shorter stays
The Greek government want all holiday homes to meet a certain standard of safety and good practice. For this purpose, they have created Elliniko Organismo Tourismo (EOT), a licence needed for renting out holiday homes for shorter stays. A shorter stay is classed as any time less than three months. An EOT licence is obtained from the Greek National Tourism Organisation. It does not matter who you are renting your property out to – it could be a total stranger or your own mother – as long as you are receiving income from their stay, you are required to have an EOT licence.
If you let a property short-term, this is classed as a business by the Greek government. So, you will have to register your overseas home as a business with the Greek tax office.
Markers necessary to obtain an EOT:
- The building must be consistent with the original building plans. This means there can be no illegal structures.
- Rooms must meet a specified minimum size.
- Any property with a swimming pool must have depth markings and warning signs. If these are lacking, and there is an accident in the pool, then the homeowner may be prosecuted.
2. Rental tax
Once you have registered your property at the tax office, you do a rental contract for each period of rental, and your accountant will lodge it at the tax office. You cannot deduct any operational expenses or bills. You then pay a flat rate of tax on the gross income, as follows:
See the rates below:
- Up to a rental amount of €12,000: 15 percent
- Between €12,000 and €35,000: 35 percent
- More than €35,000: 45 percent
The government have recently cracked down on homeowners not paying taxes on their rental income, so this is definitely something to be wary of.
3. Known when to pay your taxes
The tax year in Greece is between January 1st and December 31st. Annual tax returns must be completed by June 30th.
4. Public Liability Insurance
Letting out your Greek home to renters comes with its own set of risks. You will need to get a public liability insurance to protect yourself against accidental damage, theft, loss, injury, or illness.
Additionally, you may want to look into loss of rent cover. This will help you if your holiday home is not in the right state for guests to stay.
5. Don’t forget to tell HMRC at home!
You will have to inform HMRC of your additional income from your overseas property. Under UK law, British residents are liable to UK tax on income coming from anywhere in the world. This rule will apply to the rent you make from your Greek home.
In the long run, renting out your Greek property is a viable means of making an extra income. However, you do not want to get caught renting out a property without an EOT or not paying your Greek taxes on time. So, it is vital to be wary of the rules and regulations in Greece. Our expats have said that the Greek government can change the rules seemingly overnight, so it is in your best interest to keep as up to date as you can on all the latest information.
For a helping hand on purchasing a Greek home that you would like to rent out as a holiday home, chat with one of our experts today.