Greece Increases Taxes on Tourism to Combat Climate Change Impacts

The Greek parliament recently passed a bill aimed at increasing taxes on short-term rentals and hotel accommodations, as well as implementing a levy on cruise ship visitors. These measures are intended to help the country cope with the economic impact of natural disasters, which have been exacerbated by climate change. Greece has been experiencing a rise in extreme weather events such as floods, droughts, and forest fires, putting a strain on its public finances. Tourism, a key driver of the economy since emerging from a debt crisis in 2018, is particularly vulnerable to these challenges.

Starting in 2025, the daily tax on short-term rentals during the country’s main tourism season (April-October) will increase significantly, from 1.5 euros to 8 euros. In the winter months, the tax will also see a rise, going from 0.5 euros to 2 euros. The government aims to generate approximately 400 million euros annually through these tax adjustments, nearly doubling the amount collected in the previous year. Additionally, the bill includes provisions for raising the daily tax on hotel accommodations in the summer months and introducing a levy on cruise ship arrivals to popular islands like Santorini and Mykonos.

In response to recent natural disasters, such as storm Daniel, the government submitted a 600-million-euro supplementary budget in 2023. This funding is intended to compensate households and businesses affected by the disaster and support efforts to repair damaged rail and road infrastructure. These measures reflect Greece’s ongoing efforts to address the economic challenges posed by climate-related events and ensure the sustainability of its tourism industry.

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