Tax Bill: Changes to incentives for Airbnb properties becoming rentals, insurance for vehicles in standstill, and provisions for tips

The government is proceeding with technical improvements to the tax bill, focusing on provisions related to:

• Properties that are on Airbnb and “turn into” long-term rentals, with a reduction in the minimum required duration of short-term leasing from three years, potentially to just one year, in order to qualify for a three-year tax exemption, provided the owner chooses to switch to long-term leasing.
• Vehicles in standstill, which will need to have insurance for natural disasters.
• The tax exemption of 300 euros for tips, which is being extended to delivery workers with freelance contracts.
• Pre-filled tax returns.

The Provision for Real Estate

Under Article 9 “Tax exemption for thirty-six months for income from leasing properties that were declared as vacant or were used for short-term leasing,” the proposal to reduce the previous duration of short-term leasing from three years to one (1) year was accepted, allowing for a greater number of properties to be put on the market for long-term rental.

This change aims to provide strong incentives for more property owners to switch to long-term rentals, thereby increasing the supply of housing for permanent use. At the same time, the reduction in the required period of short-term leasing makes the transition easier, enabling quicker access to favorable tax terms.

However, the conditions for granting tax exemptions for vacant properties remain unchanged, specifically the requirement for a three-year “vacancy” period for the property.

Mandatory Insurance for Vehicles in Standstill

Under Article 26 “Vehicle insurance against natural disasters,” the proposal to eliminate the provision that vehicles in standstill are not required to be insured is under review. This means that vehicles in standstill will also need to be insured in case of natural disasters, if the government proceeds with this addition.

Extension of the Provision for Tips

Under Article 5 “Exemption of tips from income tax,” a new paragraph 3 was added, so that the monthly exemption of 300 euros from income tax for tips received now also applies to delivery workers who are under independent service contracts or work with digital platforms (freelancers).

Additional Notes

It should be noted that the changes now being implemented include the following conditions for tips:

• Tips received through POS up to 300 euros per month are exempt from income tax and social security contributions. For amounts above 300 euros, the excess amount will be added to the worker’s income and taxed accordingly.
• Tips are fully exempt from social security contributions regardless of the amount. As explained by the Minister of National Economy and Finance, Kostis Hatzidakis, this is because contributions are mainly covered by employers, while tips are given by customers.

The 300-euro limit was set considering part-time workers with low wages, aiming to ensure equality among workers.

New Regulation Includes Protection Measures for Workers:

• Tax-free tips cannot exceed 30% of the regular salary, to avoid abusive practices. For example, if a worker earns 900 euros and receives 300 euros as a tip, this amounts to 33%, which would trigger an inspection.
• Employers are not allowed to replace part of the salary with tax-exempt tips. If such a practice is detected, a fine of 22% will be imposed on the difference. For example, if a worker’s salary is reduced from 1,400 euros to 1,100 euros and they receive 300 euros as an additional benefit, a fine will be imposed.

Changes in Pre-filled Tax Returns

Under Article 87 “Public sector obligations for submitting data for pre-filling tax returns,” the following changes will be made:

a) Further clarification of the public sector entities that must register in the Registry and the responsible persons for these entities.

b) Provision for the possibility of changing the responsible persons until the deadline for submitting the data.

c) A cap has been set for the additional 50 euros per day delay, double the original fine.

d) Provision for the possibility of not imposing a fine in cases where a small number or percentage of erroneous data is sent.

Other Technical Improvements

Under Article 13 “Exemption from tax on health insurance premiums for minors”:

a) The term “health branch” has been clarified to specify which branches it refers to, with specific references to branches including health insurance premiums.

b) The provision regarding group or family insurance premiums has been corrected to include proportional tax reductions and specifies that no tax is due for covered members under this regulation.

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