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 Truthful. It is going to additionally improve a tax associated to the climate-crisis on lodging.

Greece acquired a document 36.1 million guests in 2023, whereas arrivals rose 16% to 11.6 million within the first half of 2024, in keeping with the most recent knowledge from the Financial institution of Greece. The tourism sector contributes about 20% to the economic system, making it important to the well being of the nation. 

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

All passengers arriving at Greek ports can pay a charge, and the cost shall be larger within the common tourism islands of Santorini and Mykonos. A lodging tax for the April-to-October interval additionally shall 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 middle of latest political debate. 

The federal government will ban any new short-term leasing for at the very least one yr in three primary elements of Athens, Mitsotakis mentioned. Property house owners who change leases from short-term to long-term gained’t should pay rental tax for 3 years, as will house owners 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 obtainable short-term leases doubled in the identical interval. In the meantime, resort lodging rose simply 3.5% in that interval, in keeping with knowledge revealed in a Grant Thornton report for the nation’s Chamber of Lodges launched this week.

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

Extra Measures

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

The premier additionally introduced, amongst others:

• A 2.2%-to-2.5% improve in round 2 million pensions from Jan. 1.
• A rise in minimal wages starting in April
• A rise in public sector wages, particularly to medical doctors, firefighters and staff within the military and coverage forces.
• Varied tax reliefs to assist the self-employed, farmers and others
• Adjustments to unemployment advantages

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

Greece has already pledged to satisfy a price range main 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 main surpluses, in tandem with sound nominal progress, 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.