In a bid to rebuild after devastating forest fires and floods, Greece has introduced a new climate resilience levy, a form of accommodation tax, which becomes effective this month. The government aims to generate funds through this tax to support reconstruction efforts and enhance climate resilience.
According to Greek Reporter, tourists will now be required to pay additional taxes at their accommodations, making taxes even more expensive. The new tax payment system is established to be seasonal and will apply only during the high season – from March to October, SchengenVisaInfo.com reports.
The tax rates vary based on the official rating of the accommodation, ranging from €1 to €4 per night. In other words, those staying in apartments and one or two-star hotels will pay a €1.50 tax, while guests in three-star hotels will pay €3. Four-star hotel stays will cost an additional 7€, and the tax for luxury five-star hotels will be €10.
These taxes will not be included in the prices provided by operators or travel agents, and tourists must pay them locally in the local currency.
Grigoris Tasios, President of the Panhellenic Hoteliers Association, has raised concerns about the potential negative impact of the tax increase on tourism. He fears it may discourage tourists from choosing Greece as their destination, affecting tourism rates and revenue.
However, during the off-season from November to February, the climate resilience levy will resume at the level of the previous bed tax.
The Greek government expects that the new levy will generate an additional revenue of up to €300 million in 2024, which will result in doubling the special reserves budget. Unlike the previous accommodation tax, this climate tax will also apply to short-term rentals booked via online platforms.
Special reserves will increase from €300 million to €600 million as of 2024.
Mitsotakis noted the national commitment to meeting fiscal targets despite the economic challenges that followed the recent fire and flood disasters.
Severe flooding happened in Greece last September, described as the worst in the country’s history, resulting in seventeen casualties, damage to infrastructure, and significant economic costs. The government estimated that repairing railroads alone would cost more than €150 million.
Despite these challenges, Greece’s tourism sector has thrived, witnessing a boom in international air arrivals. From January to October last year, more than 23 million arrivals were recorded, surpassing the figures for the same period in 2022. The Greek Tourism Confederation reported an additional 2.4 million arrivals in the first ten months of the previous year, reflecting a 12 per cent increase compared to pre-pandemic levels.