Spain announced a property tax on foreign buyers this week amid efforts to curb overtourism in the country. And there was speculation other Mediterranean countries could follow suit.
But travel experts have warned Greece, also a hugely popular destination with Brits, against such a move citing economic instability if they do.
The prime minister of Spain, Pedro Sanchez, announced on Monday, January 13, that foreign buyers will face a hefty tax on buying homes in his country. He hopes it will tackle Spain’s housing affordability crisis and high rents.
Now Mike Harvey, managing director at 1st Move International, has issued a warning to Greece, reports the Express.
He said: “If Greece follows Spain’s lead in imposing property taxes on foreign buyers, it could risk a crucial source of economic stability and undermine its competitiveness against other Mediterranean destinations.
“While it’s difficult to predict precise figures, we may see this revenue drop if living costs rise or foreign buyers are deterred from investing.
“For those who already own holiday homes, these changes could complicate the process of selling or finding buyers, potentially reducing their return on investment.”
With over 30 million visitors annually, Greece raked in 19.7billion euros (£16.6bn) from tourism in 2023, accounting for around 11% of the country’s GDP.
But there have also been protests from locals in Greece, as there has been in Spain. In the capital of Athens, which sees more than 6 million tourists every year, messages appeared on walls reading: “Tourists Go Home! Greek State Kills” and “Tourists Enjoy Your Stay In The Cemetery of Europe”.
It was revealed earlier this month that the number of Greek holiday homes now exceeds that of hotel beds, sparking concern among locals about difficulties in accessing local housing and rising prices.
elEconomista reported that, in 2023, the number of short-term rental options (one million) far exceeded the nearly 890,000 hotel rooms available.
Between April and October of this year, the daily tax on short-term rentals will also rise to eight euros (£6.75) – up from 1.50 euros (£1.26) in previous years.
Mr Harvey added: “Greece remains a sought-after destination, ranking in the top 25 in our 2024 Relocation Index with over 360,000 relocation searches from Brits. However, these changes could reduce international demand, which would further affect the property market and local economy.”
Don’t miss the latest news from around Scotland and beyond – Sign up to our daily newsletter here.