The short-term rental model, led by platforms like Airbnb, has emerged as a highly appealing business opportunity for property owners and investors in the tourism sector. However, as with any rapidly growing industry, it involves important legal considerations that must be addressed to ensure compliant and secure operations. Below are some key points for those interested in starting or expanding their activities in the short-term rental market.
- Reporting Income and Tax Obligations
Income generated from short-term rentals is typically categorized as real estate income and must be declared to the tax authorities. In Greece, for instance, rental details must be registered on the relevant platform of the Independent Authority for Public Revenue (AADE), and failure to submit accurate or timely declarations can result in hefty fines. It is therefore essential to maintain precise records of reservations, expenses, and payments to avoid issues during potential tax audits. - Local Regulations and Permits
Depending on the region where the property is located, specific restrictions or additional permits may apply to short-term rentals. In some popular tourist destinations, strict rules have been imposed on the number of days a property can be rented out or on how many apartments may be rented on a short-term basis. Thoroughly checking local regulations or condominium bylaws (where applicable) is crucial to avoid conflicts with co-owners or administrative sanctions. - Insurance Coverage and Liability
Hosting guests entails various risks, including accidents or property damage. While most platforms provide a basic level of host protection, property owners should consider additional insurance policies (e.g., home or public liability coverage), particularly if the property sees a high volume of bookings or includes potentially hazardous amenities (a swimming pool, a terrace with risk of falls, etc.). - Regulatory Compliance and Maintenance
Beyond taxes and zoning rules, properly operating a short-term rental calls for attention to safety and hygiene. Maintaining the property in good condition, having essential fire-safety equipment, regularly servicing electrical and plumbing systems, and adhering to relevant health protocols are of vital importance. Additionally, installing security cameras or other monitoring systems must comply with data protection rules (GDPR). - Personal Data Protection
Processing guest information (names, contact details, possibly ID documents) requires adherence to the General Data Protection Regulation (GDPR). Posting a proper privacy policy, securely storing any records, and limiting access to guest data are fundamental steps – especially when data processing is done through booking platforms. - Resolving Disputes and Complaints
Although most platforms (e.g., Airbnb) offer built-in mechanisms for resolving disputes, there may be cases where a guest takes legal action or lodges a complaint regarding safety or misleading property descriptions. Having clear House Rules, maintaining photographic evidence of the property’s condition before and after each stay, and proactively addressing complaints can help avoid difficult legal situations. - The Importance of Specialized Legal Support
The short-term rental sector is constantly evolving, with frequent changes in tax and regulatory provisions. Professional legal advice is therefore indispensable to prevent violations and penalties, resolve disputes effectively, and develop a long-term strategy for business growth.
At Ratio Legal Services, we have the experience and expertise to provide comprehensive assistance at every stage of a short-term rental venture—from the initial review of legal and tax requirements to drafting contracts, ensuring GDPR compliance, and managing potential disputes. With the right legal foundation, your Airbnb enterprise can become a secure and profitable source of income, meeting the modern challenges of tourism and hospitality.
