Airbnb: AADE’s updated guide to short-term rentals – Deductions and tax

The danger bell is being sounded by the Independent Public Revenue Authority (AADE) for short-term rentals – type Airbnb.

In the new updated guide of the AADE for short-term leases, new clarifications are provided for the institutional framework, obligations and taxation of the owners in question.

A point of particular interest is what property owners who have given a company or another individual the management of short-term rentals should pay attention to.

The guide notes that the manager of an Airbnb-style short-term rental property is defined as natural or legal person or any type of legal entity, which undertakes the process of posting a property on digital platforms, for the purpose of short-term rental and generally takes care of the short-term rental of the property.

The guide to Airbnb-style accommodations

According to the guide for Airbnb accommodation of the AADE “Property Manager” may be:

  • owner of the property or
  • beneficiary or
  • sublessee or
  • third party

The owner of the property or the usufructuary or the sublessee if he entrusts the management of his property to a third party for the purpose of short-term rental, has an obligation to submit a Property Lease Information Statement in which he will enter the details of the property manager. In case of non-submission of this, he is considered the administrator of the property.

In the case of joint property ownership, when the manager of the property is one of the co-owners, the other co-owners are not required to submit a Property Lease Information Statement.

The property owner or the usufructuary or the sublessee, if he leases a property with the right to sublease, still has the obligation to submit the Property Lease Information Statement, in accordance with the provisions here.

Attention: As a third party “Administrator” the following cases are exclusive:

  • the guardian of scholastic heritage
  • the estate liquidator
  • the executor
  • the bankruptcy trustee
  • the temporary administrator
  • the guarantor
  • the trustee or guardian or legal assistant or parent exercising parental responsibility as the case may be

The Property Manager must:

  • register in the “Register of Short-Term Accommodation Properties” maintained by the Independent Public Revenue Authority (AADE).
  • register the property in the special application for Short-Term Property Rentals on the AADE website and, specifically, in the “Short-Term Property Register”. The registration in the Register of Short-Term Accommodation Properties is carried out per rented property. With the registration of each property, a Property Registration Number (AMA) is granted.
  • obligatory posts the Real Estate Registry Number, in a prominent place, on digital platforms, as well as on any media, if it is displayed through them.
  • submit a “Short-Term Residence Declaration” for each short-term rental. The deadline for each statement is until the 20th of the following month from the day the tenant leaves the property and is submitted through the above application. In case of cancellation of the short-term rental and when, based on the cancellation policy, payment of rent is foreseen by the lessee, an initial “Short-Term Stay Declaration” must be submitted by the 20th of the month following the cancellation.
  • finalizes the information it has registered in the “Register of Short-Term Accommodation Properties” by February 28 of the year of submission of the Income Tax Return, in order to determine the taxable income per income beneficiary.

The income obtained by individuals from the short-term rental of up to two properties is income from immovable property, as long as no services are provided, except for the supply of bed linen.

The income obtained by individuals from short-term rentals of three or more properties is considered business income and is taxed on a progressive scale of 9% to 44% after deducting business expenses, including maintenance and improvement expenses.

In this case work must be started by the owner.

Rent from short-term leases by entrepreneurs with three or more leased properties and legal entities is subject to VAT at a rate of 13%.

For determining the number of properties that a natural person exploits for short-term rental, any other properties that the same person exploits exclusively outside the context of short-term rental are not taken into account.

Example

For example, in the case of a natural person who owns 4 properties, of which he has entered into annual leases for two of them and the other two he has registered in the Short-Term Property Registry in order to exploit them for short-term rental, only the last two of these are considered that they are available for short-term rental.