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

The federal government has been “very concerned” 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 improve a tax associated to the climate-crisis on lodging.

Greece obtained a file 36.1 million guests in 2023, whereas arrivals rose 16% to 11.6 million within the first half of 2024, in keeping with 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 also broaden its so-called “Golden Visa” program to buyers who’re keen to place at the 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 better within the well-liked 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. 

Brief-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 at the least one 12 months 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 hire their houses as an alternative of preserving 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, lodge lodging rose simply 3.5% in that interval, in keeping with information printed in a Grant Thornton report for the nation’s Chamber of Inns launched this week.

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

Extra Measures

Mitsotakis on Saturday additionally revealed a variety 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 docs, firefighters and staff within the military and coverage forces.
• Numerous tax reliefs to assist the self-employed, farmers and others
• Adjustments to unemployment advantages

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

Greece has already pledged to satisfy a funds 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 likely one of the most essential standards for monetary markets, and the nation’s current prudent funds 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. 

“Healthy and rising primary surpluses, in tandem with sound nominal growth, will facilitate further significant reduction in the public debt-to-GDP, which is expected to fall to below 140% by 2027, from 161.9% in 2023,” DBRS Morningstar mentioned Friday.