KPC Finance: Short-term leases through digital platforms and what you need to know

Posted on Jul 29, 2019

When a leasing is concidered as short-term?

One of the most common questions is when a property rental is considered to be short-term lease. Pursuant to the provisions of Article 111 of Law 4446/2016 (A 240) and Article 39a of Law 4172/2013 (A ‘167), refer only to Short Term Leases, which are carried out in the context of the “sharing economy” , ie leases of real estate that are concluded through digital platforms for a specific period of time less than a year and when no services other than the accommodation and provision of bed linen are provided (hereinafter referred to as “Short-term Lease”). Especially, in the case of Short Term Lease, digital platforms are those that provide specialized tools for leasing in electronic form and are not limited to the projection of the property. Therefore, any short-term leases that are entered into privately and not via a platform are not subject to these provisions and are treated as common leases, unless they are accompanied by ancillary services, so that they are treated as a business activity. If a person leases his property under Short Term Lease but does not do so through digital platforms, he / she does not enter the Short Term Lease Registry, but the specific leases are declared in the “Declaration of Short-term Lease”.

It is important to emphasize that, beyond the limitation of the length of the lease, which must be less than one year, and the exclusive provision of bed linen as the only service, no additional restrictions apply. This could be changed in the future after a joint decision of the Ministers of Economy and Development, Finance and Tourism, as provided for in paragraph 8 of Article 111 of Law 4426/2016, as in force.

Income Tax on Short-term Leases of Real Estate

Regarding the tax obligations related to the income derived from the Short-term Lease of real estate, according to the provisions of Article 39A of Law 4172/2013, natural persons are considered to be income from real estate and circulars no. 1069/2015 of the Secretary General of Public Revenues and no. 1112/2017 of the Governor of Independent Public Income Authority (IPIA). 
In particular, with regard to legal entities and profit-making legal entities, income is taxed under the provisions of paragraph 2 of article 47 of Law 4172/2013, as such income is considered in any case to be income from business activity. Consequently, for the expenses incurred and relating to the same law as above. For non-profit-making legal entities, this income is considered income from a business activity based on the aforementioned, while in respect of the deduction of expenses, (b) or (c) of paragraph 3 of Article 39 of Law 4172/2013, in the case of a public-law entity or an establishment or a private-law entity , respectively.

Short Term Lease Property Manager

Short-term Property Manager is a natural or legal person or any legal entity and may be:
a) the owner of the property,
b) the user,
c) the sub-lender,
d) a third party, including only the following cases:
- the guardian of a schooling heritage,
- the inheritance liquidator,
- the executor,
- the bankruptcy receiver,
- the temporary administrator,
- the interlocutor,
- the guardian or legal guardian or parent who exercises parental responsibility, as appropriate.

A Property Manager may also be a legal person or any legal entity acting on behalf of the legal representative or an authorized accountant.

In order for the Property Manager to make Short Term Leases, it is necessary to :

a) Enter the personal TAXISnet codes in the Short-Term Real Estate Register, which is kept on the website, to register / register the property and to obtain a Real Estate Registry Number (Α.Μ.Α.). It is clarified that the registration is made per leased property as defined in no. POL.1187 / 2017 Decision of the Governor of IPIA.

b) To state the RERN on the digital platforms of the sharing economy, and on any medium of projection.

c) Submit the Short-Term Statement by the 20th of the following month from the date of departure of the tenant from the property.

d) Include in the Register of Short-Term Residential Data items (co-beneficiaries of income, percentages, etc.), which are necessary for the determination of the annual income of Article 39a of Law 4172/2013, per beneficiary of income.

e) To make a public deposit with the Deposits and Loans Fund of the amount attributable to unknown beneficiaries of income, which the Administrator could not know when registering the Property on the Short-Term Real Estate Register. The Administrator has the obligation to submit to the TP & D. the above amount, up to the date of finalization of the image of the Short-Term Real Estate Registry, with reference to the depository note (relative to the above mentioned decision No. 1187 / 2017).

For each property leased in the short term, more than one Administrator may be designated, provided that each of them operates on a different digital platform. A Property Manager, who is at the same time and the owner of the property, acquires a Real Estate Registry Number through the TAXISnet online platform.

If the property is transferred today , but in the year 2018 it has been leased under Short Term Lease, then the following apply.

According to the no. 8787 / 2017 Decision, persons who from 1 January 2018 until the beginning of the application of the Short-Term Real Estate Registry have entered into short-term leases, in the context of the sharing economy and can not subscribe to it, have only to declare income earned on the short-term lease of real estate in the sharing economy, separately and collectively, per property, on the forms of income tax returns for the tax year 2018 (E2 and E1 forms).

Regarding the obligations of the Property Managers with the Touristic Mansions (persons of paragraph 5 of article 46 of Law 4179/2013, which have a Special Functional Signal), where Short Term Leases are made through digital platforms, must:

a) Register Touristic Mansions in the Short-Term Real Estate Register. This entry will not be accompanied by a Real Estate Registry Number (A.M.A.).

b) Indicate, in a visible place, the Special Functional Signal number , when posting a property on digital platforms for the purpose of short-term lease.

c) Submit the Short-Term Statement by the 20th of the next month, following the day of departure of the tenant from the property.

In the case that one of the co-owners is appointed as Property Manager, he makes the registration of the property in the Register with his personal TAXISnet passwords. The Property Manager is obliged to submit the Short-Term Delegations, as well as to draw up the Income Beneficiaries table. The remaining co-owners are not obliged to issue a Real Estate Registry Number (A.M.A.), nor to submit a Declaration of Real Estate Lease . It should be noted that in any case, the co-owners of the property who earn income as income beneficiaries are required to declare this income when submitting the annual income tax return.

In case that person does not own or use a property but wishes to be registered as a Property Manager, then the owner of the property (or one of the co-owners) must submit a Declaration of Real Estate Lease . In this statement, the owner has to choose the relevant scope, which grants the sublease right for Short Term Lease, in accordance with the provisions of article 111 of law 4446/2016, as in force and to register the Property Identification Number. Then the Property Manager — non-owner, using his personal TAXISnet codes and after choosing the Property of the Lessor, will register the property in the Short-Term Real Estate Register. The data required to be granted by the Real Estate Registry Number is the number of the Declaration of Real Estate Lease submitted by the owner. In the case that there are more than one lessee in the Real Estate Lease Records, each of them may be registered in the Short Term Real Estate Registry and acquire Real Estate Registry Number, provided that the property is posted by each of the lessees on a different platform.

A Property Manager, who manages two properties for short-term leasing, will make two listings and receive two different Real Estate Registry Numbers. The registration in the Short-Term Real Estate Register shall be made per leased property as defined in no. 1187 / 2017 Decision, as in force.

Important information on the Short-term Leasing Statement

Short-term Leasing Statements are submitted until the 20th of the following month (since last month there was a departure or cancellation) from the date of departure of the tenant from the property. In the case of cancellation of the short-term lease and when a cancellation policy provides for a lease to be paid by the tenant, a Short-Term Statement is submitted by the 20th of the next month, following the cancellation (the relevant decision is no. 1187 / 2017). It is also important to stress that Short-Term Leasing Statements may be amended by February 28th of the year of filing the income tax returns and prior to the finalization of the Short-Term Leasing Registry (the relevant issue is POL1187 / 2017 Decision).

The responsibility of the “Property Manager” in relation to the correctness and completeness of the data

In the case of an audit, the Property Manager must provide all the necessary legal documents — proof of the correctness of the data that he or she has entered. Following the acquisition of Real Estate Registry Number, the Manager may make changes, up to the date of finalization of the Short Term Leasing Registry, in order either to correct erroneous entries or to modify data due to a change in the facts without change the registration number of the property.

 KPC.Finance specializes in providing services tailor-made to our customer needs. If you are uncertain or want to know more about your obligations and privileges on your short-term leasing activity, please book an appointment with us by calling 210–6890990 or by sending us an email to