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 12 months and can start charging charges, Mitsotakis mentioned Saturday throughout his annual speech on the Thessaloniki Worldwide Truthful. It should additionally enhance a tax associated to the climate-crisis on lodging.

Greece obtained a report 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 financial system, making it very important to the well being of the nation. 

The nation may even develop its so-called “Golden Visa” program to traders who’re prepared to place not less than €250,000 ($277,000) into native startups. Foreigners have been beforehand required to purchase property to amass the visa. 

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

Mitsotakis reiterated concern that components 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 middle of current political debate. 

The federal government will ban any new short-term leasing for not less than one 12 months in three foremost components of Athens, Mitsotakis mentioned. Property homeowners who change leases from short-term to long-term gained’t should pay rental tax for 3 years, as will homeowners who resolve to hire their houses as a substitute of maintaining them off the market, he mentioned.

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

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

Extra Measures

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

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.
• Varied 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 nicely balanced.” 

Greece has already pledged to fulfill a finances main surplus — an index that exhibits 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 without doubt one of the most necessary standards for monetary markets, and the nation’s current prudent finances path was one of many drivers for rankings firms to return Greece to the funding grade zone in 2023 after 13 years at junk standing. 

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