Aegean Real Estate
Short-Term Market Deep Dive
To summarize the airbnb data below:
- occupancy oscillates between 20% and 70%
- average daily rate spikes in Jun/July/Aug, filling only in Jul/Aug
- mostly July/Aug occupancy, curiously, strong occupancy in Feb 23
- top 1BR appear most profitable with ADR up to 100, this is most of the market too.
- top 2BR has villa with pool with rate ADR to 300
- top 3BR do not obtain a better ADR than 2BR and are only 15% of market
Top 2BR
2BR villas, especially with pool and sea views obtain high daily rate at 300/day and best occupancy.
Top 1BR
1br village house can obtain 100 per day, profitability is maximal for those if occupancy is good. However, many houses are not getting good occupancy.
Top 3BR
3 beds houses seem harder to market and have no benefit compared to 2br. It is a liffestyle choice for owner rather than investment.
Occupancy
Occupancy goes does to 20% in off month, 70% in peak month.
Average Daily Rate
Mean ADR shows some seasonality going from 50 to 70.
Seasonality
We see ocupancy spikes in Jul/Aug and easter:
Results were obtained from Airdna on 20230401.
Greek Economy Overview
Hilights can be found from wikipedia
- Greece is a country of 10m people (to be compared to 80m for Turkey and 60m for France, Italy, UK).
- Nominal GDP per capita is 22k nominal, 36k purchasing parity, it is considered an advance economy
- main industries are Tourism, Shipping, Agriculture
- Tourism is 20% of Greece GDP, to be compared to 15% in Spain, 10% in Italy or France.
- Greece was hard hit by the GFC, GDP per capita fell from 94% of EU avg to 67% from 2009 to 2019, consumption per capital fell from 104% to 78%.
- unemployment going from 8% to 27.5%, it is now down to 13%, still much higher than before GFC.
- Greek economy was hit 10% a second time by covid in 2020, but is recovering since, albeit at a slow 2% growth rate above inflation.
Rental Market and Real Estate Financial and Legal Overview
- long term tenant law is neutral: contracts last 3 yr,
- no restriction on short term rent on islands surveyed, update 2024: restriction to 90d per year since 2017 (60 day in islands with less than 12000 people) and to a maximum of two properties per manager since 2024.
- airbnb: Mainly summer and 2 weeks for Easter.
- According to Global Property Guide, gross yield is 5.4%.
- Roundtrip cost is a typical 8.5%
Income Tax
According to pwc, income tax on real estate income is as follows. This is the tax applied to tourism rentals too:
- 0-12k: 15%
- 12k-23k: 35%
- above 35k: 45%
A reduction of 40% of the relative expenditure from Jan 2020 to Dec 2024 for improving insulation, functionality and aesthetics of the building is available
Capital Gains Tax
Capital Gains Tax is 15%, with full exemption after 5Y according to pwc.
However, according to residence-greece for real estate, CGT on the margin of real estate sale follows this much higher taxation table:
- 0-12k: 15%
- 12-35k: 35%
- above 35k: 45%
with a deduction of 25k for property held more than 5Y.
According to rsm, CGT on disposal of real estate by individuals is not taxed due to an exemption until 2024. This exemption keeps being reenacted for a year every year since 2013.
According to a Geek accountant, there is no CGT for individuals, only for businesses. According to my lawyer, there is normally no CGT upon sale especially if selling on two properties in 2 years. Beyond that, it becomes likely for the tax office to reclassify your house sales as business.
Special Tax Deals for Non Residents
These deals are described here.
- 7% worldwide income tax for retirees, DTA applies for income taxed at source, regime lasts 15Y, greek income taxed at 44%, needs to be greek NR prior 6 year
- flat tax 100k for non retirees greek NR for last 8 years, cannot be reduced by DTA, standard rates on greek income.
These deals last longer than for Italy or Portugal (10y). The numbers are similar for HNWI compared to Switzerland or Jersey, but these deals are impermanent.
Corporate Income Tax
According to pwc, Greece is a tax heaven for shipping companies, for other companies, CIT is 9% to 10k, 22% above that.
Local Tax and Value Tax
ENFIA: imposes a property surface tax from 2 eur/sqm to 16 eur/sqm depending on property prices per sqm in the area, see table. An additional tax 0.2%-1% is assessed for property value in the 400k-2m range, and 2% for properties above 5m. This comes due in April on the ENAI website.
Local duty (TAP) is 0.025% to 0.035%.
Legal: Eligibility for Shengen Visa
Real estate for a total value of 250k, or 400k in more tense markets of Athens or Thessloniki (the 2 largest cities), or Santorini (prime aegean island). This can be of interest for the buyer or for resale assuming the law does not change.
Legal Entities
An useful overview from the greek governement website enterprisegreece.gov.gr is here.
This corroborates with companyformationgreece:
- anonymous company by shares -- Anonymous Etaireia, capital of 25k min, 2 directors min
- limited company -- Etaireia Periorismenis Efthinis, capital 4.5k min, owners must be specified during incorporation
- general partnership - O.E, partnership with full liab on general partners, limited partners can be also added
- limited partnership/silent partnership - E.E, has general partner with management and liability, and limited partner who only provide capital, silent partner is similar to a limited partner, there is a general partner
- joint venture - structure can be created for specific project limted in time
Subsidies for Tourism Building and Energy Rennovations
Conclusions
Tax is relatively low in Greece, and so is price of real estate. This makes investment there attractive.
see also this article on Arirbnb stats. Airbnb mostly have rates in the $50 to $130 range.
Construction Subsidy Programs:
Update 20240621
- tax of 1.5/day/guest for climate crisis resilience in place from Jan 2024, 10eur/day/guest for units of more than 80sqm
- max of 2 airbnb unit per owner, businesses can operate more than 2
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