Overtourism: Greece to focus on short-term leases and levy port charges

The federal government has been “very involved” about an inflow of cruise passengers throughout sure months of the yr and can start charging charges, Mitsotakis mentioned Saturday throughout his annual speech on the Thessaloniki Worldwide Honest. It’s going to additionally enhance a tax associated to the climate-crisis on lodging.

Greece acquired a file 36.1 million guests in 2023, whereas arrivals rose 16% to 11.6 million within the first half of 2024, in response to the newest information from the Financial institution of Greece. The tourism sector contributes about 20% to the economic system, making it very important to the well being of the nation. 

The nation can even broaden its so-called “Golden Visa” program to buyers who’re prepared to place at the very least €250,000 ($277,000) into native startups. Foreigners have been beforehand required to purchase property to accumulate the visa. 

All passengers arriving at Greek ports can pay a payment, and the cost might be higher within the common tourism islands of Santorini and Mykonos. A lodging tax for the April-to-October interval additionally might be elevated, with income benefiting native communities.

Mitsotakis reiterated concern that elements of Greece face the issue of “overtourism.” In an interview with Bloomberg in June, he introduced plans to prohibit cruise ships visiting the nation’s hottest islands from 2025. 

Quick-term leases have been blamed for fueling the nation’s housing disaster, which together with excessive shopper costs has been on the heart of latest political debate. 

The federal government will ban any new short-term leasing for at the very least one yr in three fundamental elements of Athens, Mitsotakis mentioned. Property homeowners who change leases from short-term to long-term gained’t must pay rental tax for 3 years, as will homeowners who resolve to lease their houses as an alternative of maintaining them off the market, he mentioned.

Vacation leases elevated an annual common of 28% from 2019 to 2023, whereas out there short-term leases doubled in the identical interval. In the meantime, resort lodging rose simply 3.5% in that interval, in response to information printed in a Grant Thornton report for the nation’s Chamber of Inns launched this week.

The federal government can even start a brand new €2 billion program that might be used to scale back interest-rate prices for mortgage loans. 

Extra Measures

Mitsotakis on Saturday additionally revealed quite a lot of measures geared toward easing the price of residing, together with a discount in social insurance coverage contributions by 1 share level in 2025 as an alternative of a earlier plan for a 0.5 level reduce. 

The premier additionally introduced, amongst others:

• A 2.2%-to-2.5% enhance in round 2 million pensions from Jan. 1.
• A rise in minimal wages starting in April
• A rise in public sector wages, particularly to docs, firefighters and employees within the military and coverage forces.
• Numerous tax reliefs to assist the self-employed, farmers and others
• Modifications to unemployment advantages

“I don’t have a sack of reckless spending right now,” he mentioned. “Our spending for 2025 is properly balanced.” 

Greece has already pledged to fulfill a price range major surplus — an index that reveals income minus spending excluding curiosity funds — of two.1% of GDP for each 2024 and 2025, up from 1.9% in 2023. 

Fiscal self-discipline is among the most vital standards for monetary markets, and the nation’s latest prudent price range path was one of many drivers for scores firms to return Greece to the funding grade zone in 2023 after 13 years at junk standing. 

“Wholesome and rising major surpluses, in tandem with sound nominal development, will facilitate additional important discount within the public debt-to-GDP, which is predicted to fall to under 140% by 2027, from 161.9% in 2023,” DBRS Morningstar mentioned Friday.