From now on, tourists will have to pay a season-dependent “resilience contribution” during their vacation in Greece. Vacationing in the summer will be more expensive than a trip to Greece in the winter. The new climate levy is earmarked and aims to ensure a more climate-neutral tourism as well as to cover the costs incurred by tourism.
In return, the overnight tax, known as the “city tax” in Greece, will be abolished. The rule of thumb is: the more luxurious the vacation, the higher the levy.
The culprits must pay
The Greek government is convinced that tourism contributes to the exacerbation of the effects of human-induced climate change. Moreover, there were numerous wildfires around tourist areas last summer. According to the government, sustainable tourism can only be achieved through sustainability and the creation of a climate-friendly infrastructure. All of this is to be financed through the taxation of the use of tourist accommodations.
According to the calculations of the Ministry of Finance, which had to submit a supplementary budget, the wildfires and floods in the summer cost the state at least 600 million euros. Deputy Minister of Finance, Athanasios Petralias, explained that an additional 450 million was needed for the National Public Investment Programme and 150 million for the regular budget.
Of the 150 million euros, the first compensations for the victims of the natural disasters will be paid. The Ministry estimates the subsequent costs for final compensations to be significantly higher. A separate account was set up in the Public Investment Programme to permanently cover the costs of state measures against natural disasters.
The climate levy, initially called the “Green Levy,” was announced by Prime Minister Kyriakos Mitsotakis during his traditional State of the Nation address at the Thessaloniki International Fair in early September. It was temporarily put on hold in the face of devastating storms, regional and local elections, only to resurface in the amendment to the tax legislation.
Unlike the overnight tax, the climate levy is also levied on short-term rentals through relevant internet platforms.
Up to six euros in additional costs per day
The climate resilience contribution is charged per day and per room or apartment. The fee is higher from March to October. For hotels with one or two stars, 1.50 euros must be paid during the peak season. The climate levy amounts to three euros for three-star accommodations. For four-star establishments, seven euros per day are due.
Luxurious five-star hotels cost tourists ten euros for the climate levy. Furnished rooms or apartments for rent are subject to a daily charge of 1.50 euros. Short-term rentals arranged online incur a fee of 1.50 euros for apartments. If the property is a single-family home or a villa, the fee is 10 euros.
Compared to the overnight fee, this results in an increase of between one euro and a maximum of six euros per day. From November to February, the levy starts at 0.50 euros and rises to a maximum of four euros. The lower price aims to promote winter tourism in Greece. After all, hotel prices are already low in winter. According to industry associations, for example, a five-star hotel in Xanthi in northern Thrace in the winter costs no more than 60 euros.
Additionally, the government promised targeted measures for areas battered by natural disasters such as Pilion, Trikala, and Karditsa
The Winter tourism in the affected areas.
Hoteliers’ objection – restrictions imposed on “AirBnB” rentals
The hoteliers are not pleased with the new tax at all. They feel disadvantaged compared to short-term rentals. Moreover, as of 1.1.2024, all hoteliers with an annual turnover of more than two million Euros are required to have insurance against fires, floods, and earthquakes, causing further additional costs.
The government argues that short-term rentals are also being regulated. Short-term rentals are defined as rentals of less than 60 days, regardless of whether they are done through a digital platform or not, as long as no other services are provided apart from the accommodation and provision of linen.
Individuals who own three or more rental properties for short-term rentals are obligated to establish a company. The fines for not registering with the “Residential Property Register” will be increased to 50 percent of the gross income of the last tax year, and at least 5000 Euros, whereas currently the maximum penalty is 5000 Euros.
