Overtourism: Greece wants to focus on short-term rentals and charge port fees

The government is “very concerned” concerning the influx of cruise ship passengers in certain months of the 12 months and can impose fees, Mitsotakis said on Saturday during his annual speech on the Thessaloniki International Fair. The government may also increase a tax on accommodation linked to the climate crisis.

Greece welcomed a record 36.1 million visitors in 2023, while arrivals rose 16% to 11.6 million in the primary half of 2024, in line with the newest Data from the Bank of Greece. The tourism sector contributes about 20% to the economy and is subsequently crucial for the health of the country.

The country may also expand its so-called “Golden Visa” program to investors who want to speculate at the least 250,000 euros ($277,000) in local startups. Previously, foreigners had to buy a property to acquire the visa.

All passengers arriving at Greek ports could have to pay a fee. The fee shall be even higher on the favored tourist islands of Santorini and Mykonos. The overnight tax for the period April to October may also be increased, with the proceeds going to local communities.

Mitsotakis reiterated his concern that parts of Greece are facing the issue of “overtourism.” In an interview with Bloomberg in June, he announced plans to Restrict cruise ships From 2025, the country’s hottest islands shall be visited.

Short-term rentals are blamed for the country’s housing crisis, which, together with high consumer prices, has been on the centre of recent political debate.

The government will ban all short-term rentals in three predominant districts of Athens for at the least a 12 months, Mitsotakis said. Property owners who change their leases from short-term to long-term wouldn’t must pay rental tax for 3 years, as would owners who determine to rent out their homes relatively than keep them off the market, he said.

Vacation rentals grew a mean of 28% annually from 2019 to 2023, while available short-term rentals doubled over the identical period. Hotel accommodations, then again, grew only 3.5% during that period, in line with data published in a Grant Thornton report for the country’s hotel chamber, which was published this week.

In addition, the federal government will launch a brand new €2 billion program to cut back interest costs on mortgage loans.

Further measures

Mitsotakis also announced a series of measures to cut back the price of living on Saturday, including a one percentage point cut in social security contributions in 2025 as a substitute of the previously planned 0.5 percentage point cut.

The Prime Minister also announced, amongst other things:

• From January 1, around 2 million pensions shall be increased by 2.2 to 2.5 percent.
• An increase within the minimum wage from April
• An increase in salaries in the general public sector, particularly for doctors, firefighters and armed forces and police personnel.
• Various tax reliefs for self-employed individuals, farmers and others
• Changes to unemployment advantages

“I don’t have a bag of reckless spending today,” he said. “Our spending for 2025 is well balanced.”

Greece has already pledged to attain a primary budget surplus – an index that measures revenue less expenditure excluding interest payments – of two.1 percent of GDP in 2024 and 2025. This surplus is anticipated to achieve 1.9 percent in 2023.

Fiscal discipline is one of the vital necessary criteria for financial markets, and the country’s recent prudent fiscal stance was one in every of the the explanation why rating agencies placed Greece back in the highest 10 on the planet rankings. Investment grade zone in 2023 after 13 years at junk level.

“Healthy and rising primary surpluses, together with solid nominal growth, will enable a further significant reduction in the public debt-to-GDP ratio, which is expected to fall from 161.9 percent in 2023 to below 140 percent in 2027,” DBRS Morningstar said on Friday.