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Greece Introduces Climate Tax for Tourists in 2024

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The island of Mykonos in Greece. Credit: Mstyslav Chernov / Wikimedia Commons CC BY-SA 3.0

A new accommodation tax enacted by the Greek government came into force this month 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 accommodations upon arrival. This is 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 during the busy tourist months between March and October.

Those staying in apartments and one and two star hotels will now have to pay one euro and fifty cents, while guests in three star hotels will pay three euros. Stays at four star hotels will be charged at an additional seven euros based on the new system, and the applicable fee for five star luxury hotels will be ten euros.

The taxes will not be included in the 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. However, 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 three hundred million euros in 2024, doubling its special reserves budget. The new tax will apply to short-term rentals booked through online platforms unlike the previous accommodation tax.

“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 seventeen people dead in September, drowned tens of thousands of animals, and wrecked houses, bridges, roads, businesses, and farmland. The government said railroad repairs alone would cost more than a hundred and fifty 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 five percent of the country’s gross domestic product.

Despite the disasters, the tourism sector in Greece has boomed, with the January to October period last year seeing twenty-three 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 twelve percent.

Many countries around the world charge these taxes. For example, tourists pay extra in Austria, the Balearic Islands, Switzerland, and The United States.

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