Do you really need an EOT Licence?
According to the Greek National Tourist Organisation, know in Greece as EOT (Elliniko Organismo Tourismo) if you rent your Greek property for holiday use, i.e. not long-term rental of over 3 months, then you must by law have an EOT licence. So if you take money from anyone, that includes family, friends or third parties, the answer is simply YES, you do need an EOT licence.
Back in 2002, when we bought our land here in Crete, we were told, unofficially, that “No” we didn’t need one. “You only have two apartments”, “No one will know”, “Just tell them it’s your family visiting” And yes we could have been forgiven for taking this advice, it’s a big deal building a home abroad, and didn’t we already have enough paperwork to do without the bother of yet more red tape to unravel? But let’s be honest, when they do eventually catch up with you, I don’t think that “Well…… Kostas in the Kafeneon told us we didn’t need one” will wash, do you?
The process of obtaining a licence is long, complicated and expensive. It requires the services of an architect or civil engineer and above all else, a good understanding of the Greek language. After great consideration, we choose to employ an agent, Gianna Peteraki in Hania. Having always tried to do all work ourselves to save money, we resigned ourselves to the fact that, this time it was not possible and to successfully obtain our licence we had to seek professional help.
We discovered Gianna through the Greek grapevine, she came highly recommended and we soon discovered that the recommendations were well deserved. It is important, at this point, to remember that all applications are different. In our case, we have two self-catering apartments on the first floor of our house. We live here permanently and both apartments are accessed independently of the house.
The EOT rules for Villa rental and Apartment rental are different, but as a general rule of thumb, all the points I am about to cover are relevant to most applications, however, please remember that the following information is based on our own experience and the rules are changing constantly, what was relevant to us 2 years ago may not be in force now. Something you need to consider before going any further and probably most importantly, is that the building must correspond exactly to the plans.
To begin the process we had to submit our application, when the application was approved we were given a protocol number, with this number we could proceed with obtaining the various certificates needed. They are as follows…..
Fire Certificate – A separate set of plans were drawn up which included the exact location of all fire extinguishers, emergency lights and exit signs in the public areas plus the sprinkler system and fire door required for our boiler room. The plans submitted and approved, we then employed a registered, fire safety engineer, to install the equipment. Then we had to apply again to the Fire Department to come and inspect the equipment and awaited their approval.
Health Certificate – Again another set of plans were sent for approval to the Health Department, identifying the entire sewerage system and sewerage tank. These were approved and an on site inspection was carried out.
Tax Certificate – Proving that we owed no taxes.
Authorised passport certificate – Obtained from our lawyer.
Deposit receipts from two Banks and the Tax Office, into which we had to pay several small deposits.
Pool Operating Certificate – if you have one, we don’t.
Finally, we had to set up the business with our accountant.
Now the fun begins, after all of the above, we then had to add up our points.
The basic tourist establishment here in Greece is rated on a key system, rather like the star system. We were applying for the basic 3 key licence. Keys are awarded according to the amount of points your property has. For 3 keys we needed 5001-7500 points. Points are awarded according to the type of accommodation you have and for certain services and or equipment you offer. For example, air conditioning is worth 840 points, a reception area is worth 600 points, parking is worth 160 points, an armchair, a desk, a kettle and other such items are worth anything between 50 to 200 points. Only when you have completed all of the above and accumulated all the necessary points do you apply for the final inspection by EOT inspectors.
The inspectors visit is of utmost importance, ultimately they have the power to award you the licence and regardless of the above, if they are not happy with anything, your application can be in jeopardy. After all the work we had done to get to the inspection stage, needless to say we were very polite, accommodating and I even baked a cake and to our great relief the inspection went well and we were awarded the EOT license.
The license is valid indefinitely but you must be aware of the necessary annual up keep of the Fire certificate, The Health Certificate and the EOT price list, which you must pay for at the beginning of every season. The price list is a certification of the minimum and maximum cost you can charge your customers. And of course as a business you must submit an annual tax return and pay the taxes according to your accommodation, for which you will need the services of your accountant.
Is it worth it? For us yes, ok it’s a long and daunting task and there were many occasions when we felt like throwing in the towel. But once obtained the licence is an invaluable tool, not only to ensure that you are operating within the law, therefore, giving you peace of mind, but it may even contribute to the value of your home.
Wish you a nice, warm (well in Crete not to warm) and succesfull 2010. @nne
And the same to you and yours, health and hapiness for 2010. Helen.
Hello from northern Greece!
We went through the whole procedure – it´s worth it, though you do wonder why it should take three years and cost 3000 euros…If they want tourists in this country!
Actually, I wanted to contacted not about this, but about link exchange! I run a small hotel in the other end of Greece – see my website and let me know what you think!
Kindly,
Tove
Hi Tove, thanks for getting in touch, yes I’d love to swap links with you, you have a great website and the your blog is wonderful. Our site and blog are far from being as established as yours but we’re getting there. I’ll put your website link onto my websites links section and your blog and website links onto my blog, how does that sound to you ? Helen.
We have a 3 bedroom house in Crete, about 20 mins drive from Chania, in the mountains and we are interested in renting it out to holiday makers & walkers. I have been researching EOT licences and as we do not live in Crete, the whole process would be impossible to do from the UK. I wondered if you could put me in contact with Gianna Peteraki as she may be able to help us also. Thank you.
Rachel
Sorry, a question? Howard much did you pay and to whom??
Hi, as stated in the post we employed a local agent Gianna Peteraki and we paid according to our circumstances, everybody is different it depends on what you need the agent to do for you. We obtained our license over 4 years ago and things have changed.
hi, wow that was a real journey!! I’m thinking to do the same with my place but i’m trying to understand if I really need a Eot if I just want to rent rooms with private toilet and not the whole house. do you know if there is any diffence?I’m getting mad to find those informations on internet.
Thank you for this articles bytheway
Yes you do, as stated in the article if you receive money for any accommodation then you must have a license, we don’t rent the whole house because we live in it, we only rent our 2 rooms upstairs. The law is very very strict now and the Greek Government have set up teams of people to go out and check all the accommodations for license, they search the internet and ask locally. You must have a license to pay your taxes, for every euro you earn, there is no tax breaks anymore, if you don’t have a license then you can’t pay your taxes and then you will be taken to court for tax evasion. The current crisis in Greece means that the government are very hard on tax avoidance it’s really not worth the risk and only fair for people like us who have a license and pay all our taxes with all the other costs mentioned in my article. Please think very carefully and get professional advise. Your blog looks wonderful, I have not had time to write in mine for ages, life here in Crete is so wonderful and I have so much I like to do with our guests and the garden and our animals that I simply don’t have enough time, but hope to this winter. Thank you for your comment and good luck. Helen
oh Helen, I wish I could have an other answer, that scares me a little if I have to be sincere. I’m from Italy and here the law is little different that’s why I though there was an other way to pay taxes without go through the all process, but well I will take all my energy and I will start with the Eot. I have been many times in Crete and I really love that island, if u like next here I could pass your contact to my collegues they come often to Crete as well. Can I ask you just the last information? How much is the tax? I mean do you pay a percentage on what you earn or is fix fee? Thank you for all the informations. γεια σας
First we pay VAT 6.5% plus local authority tax 0.50% and then we pay income tax of 26% on everything that is left from 1 euro up.
So for example with the taxes as above, the accountant charges , VAT returns every quarter (3 months) plus health certificate, fire safety equipment checks, price list and all the things I mentioned in my blog, our average overheads work out at 40%, so for every 1 euro we take we pay 0.40 cents. Nearly half your income will be just to run the business. Unfortunately here in Greece they do not make any incentives for people to do small business. Maybe things will change when the Government and TROIKA realize that they are suffocating this country and they need to change the law for small businesses. Sorry to give you all this bad news, we love it here even with the crazy tax laws and we always say that we would rather be here with no money than anywhere else with money. We think it is better for anybody wanting to start a business here in Greece to wait until things are better, maybe a few more years.
I would be very happy for you tell your friends about us, we have a very unique place here in Crete.
You can see our website http://www.aretecrete.com and we now have 38 reviews on Tripadvisor all 5 stars at
http://www.tripadvisor.com/VacationRentalReview-g189415-d1753843-Arete_Crete_Apartments_Agrotourism_in_Crete-Chania_Town_Chania_Prefecture_Crete.html
Thank you. Helen xxx
Well done! I have seen you place and It really looks beautiful and people is very happy about your place, I will tell my collegues to visit you next here has we all work for airlines so is quite common we fly to crete for vacations. Thank you for your suggestions. My dream is to go and live in Greece but I’m afraid we could loose everything if we don’t earn enough to pay taxes… I wish they will solve this situation. I will do my best to realize that dream. You are right better there than here working hard for nothing. I have the last question, I promise 😉 , I was thinking to open my B&B just during summer but You told me there is not anymore season break that’s means that I will have to pay taxes also during winter time when I will be not open righ? How do they charge this period if we don’t earn nothing? Again thank you for all the information.
Ambra
Hi Ambra
Thank you for your very nice comments and we look forward to welcoming your colleagues some day here at Arete.
I’m afraid that yes you do have to pay even in the winter, you still have to make the VAT returns every 3 months so you will have to pay an accountant even if your income is zero. The Greek government also make their own calculation based on the size of your house and how much they think you are earning, they call this Imputed Income, so they will charge you tax on this figure they think you earn just in case you are trying to hide income from them. It’s very complicated Ambra, I strongly advise you to get an accountant who can advise you on all these things. Were in Crete is your place ? If you are in the west like us then I will give you our accountant’s number, he specializes in the tax laws for non-Greeks, he’s very good and as an accountant myself, when I was in the UK, I am very happy with him. Helen xxx
oh no Helen, My place is in Dodecanese’s Island, in a very small place where here there is not much tourism that’s why I really need to be carefull If I decide to run a business, I don’t wonna have surprises. Thank you again for your help you have been super kind! keep in touch
Ah ok well good luck and enjoy your little piece of paradise.