A new accommodation tax enacted by the Greek government came into force this month (January) as part of plans to finance reconstruction efforts following severe forest fires and floods.
Greece Introduces Climate Tax to Fund Reconstruction
Greece has introduced a ‘climate resilience levy’ – an increased tax compared with the bed tax – which will see tourists pay taxes at their accommodation on arrival, in line with the tiered payment system created by the government.
The tax increases range from one euro to four euros per night, with amounts based on the official rating of the venue. It is also seasonal, having effect only in the busy tourist months between March and October.
Those staying in apartments and one and two star hotels will now have to pay 1.50 euros, guests in three star hotels will pay three euros, holidaymakers in four star hotels will be charged seven euros and people coming to luxuriate in five star hotels will have to pay 10 euros.
The taxes will not be included in the holiday prices quoted by operators and travel agents, and must be paid locally in local currency.
President of the Panhellenic Hoteliers Association Grigoris Tasios expressed concerns that the tax increase would deter tourists from visiting Greece, and ultimately affect revenue. But during the low season between November to February, the climate resilience levy will remain at the level of the old bed tax.
The Greek government has said it expects this new levy to generate an additional revenue of up to 300 million euros in 2024 – doubling its special reserves budget. The new tax will apply to short-term rentals booked through online platforms, which the previous accommodation tax did not.
“Special reserves will increase from €300 million to €600 million,” as of 2024, Mitsotakis said in an annual speech on economic priorities in Thessaloniki in September last year. Mitsotakis also made it clear that Greece will meet its fiscal targets regardless of the fire and flood disasters’ economic cost.
The worst flooding in Greece’s history left 17 people dead in September, drowned tens of thousands of animals and wrecked houses, bridges, roads, businesses and farmland. The government said that railroad repairs alone would cost more than 150 million euros.
Storm Daniel covered around 140,000 hectares in water, including in the Thessaly region in eastern central Greece which is an important source of dairy and cotton. The region accounts for roughly 5 percent of the country’s gross domestic product.
Despite the disasters, the tourism sector in Greece has boomed, with the January-October period last year seeing 23 million international air arrivals, surpassing the figures for the same period in 2022.
Greek Tourism Confederation figures showed that in the first ten months of last year, Greece had 2.4 million additional arrivals. Compared to the same period in 2019, the increase is estimated at 12 percent.
Many countries around the world charge these taxes – for example tourists pay extra in Austria, The Balearic Islands, Switzerland and The United States.