If you earn income from short-term rentals in Crete, the most important thing to understand right now is that two different tax scales are in force at the same time, each governing a different tax year. Income earned in 2025, which you declared this year, was assessed on the old scale. Income you are earning now, during 2026, will be taxed on the new one and declared in 2027.
That distinction is why a lot of what is written online is wrong. The law passed in November 2025, so several sources wrote that it applied from that year. It does not.
The short version
- Tax year 2025 income (declared in 2026): 15% up to EUR 12,000, 35% from 12,000.01 to 35,000, 45% above 35,000.
- Tax year 2026 income (declared in 2027): 15% up to 12,000, 25% from 12,000.01 to 24,000, 35% from 24,000.01 to 36,000, 45% above 36,000.
- The new 25% intermediate band is the substantive change and lowers tax on the 12,000 to 24,000 slice.
- Property income is taxed on its own scale. It is not aggregated with salary or pension.
- Up to two properties per individual: property income. Three or more: business activity.
- No part of Crete is inside a suspension zone for new registry entries.
The scale for 2025 income
The return you filed in spring or summer 2026 covered 2025 income and was assessed on the old three-band scale: 15% on the first EUR 12,000, 35% on the slice from 12,000.01 to 35,000, and 45% above 35,000. This is what ΑΑΔΕ's own Ε1 completion guide, issued on 16 March 2026, sets out.
The old scale is not obsolete information. It remains the operative scale for any amended return, late filing or audit covering 2025 and earlier.
The scale from tax year 2026
Law 5246/2025 reformed the scale in article 40(4) of the Income Tax Code. The new bands are: 15% up to EUR 12,000, 25% from 12,000.01 to 24,000, 35% from 24,000.01 to 36,000, and 45% above 36,000.
The scale is progressive, not flat. The whole amount is not taxed at the top band's rate. On income of EUR 24,000 the total tax comes to EUR 4,800; on EUR 36,000 it comes to EUR 9,000.
Article 47(3) of the same law states expressly that the new scale applies to income acquired from tax year 2026 onwards. It is not a one-year measure.
Position as at 2 August 2026. Confirm with your accountant before using this for calculations.
When it stops being property income
For an individual, short-term rental income is treated as property income where up to two properties are let, and the properties are let furnished with no service provided other than bed linen.
From the third property onwards, or if services beyond bed linen are provided, or if the activity is carried out by a legal entity, it counts as business activity. That changes the picture entirely: different taxation, social security contributions, the trade fee and VAT obligations.
The two-property threshold is where most owners miscalculate, because it counts per individual rather than per dwelling. If you are considering handing over management of your property, classification is one of the first things we settle.
Suspension zones and Crete
As at 2 August 2026, no part of Crete, in Chania, Rethymno, Heraklion or Lasithi, is subject to a suspension on new entries in the short-term stay property registry.
The law currently provides for exactly two geographic suspensions and names them: the 1st, 2nd and 3rd municipal districts of the Municipality of Athens, and the 1st Municipal Community of the Municipality of Thessaloniki. No Cretan municipal unit is included.
In practice this means three things. You can register a new property and obtain an ΑΜΑ today with no geographic obstacle. The rule deleting a registry entry on transfer applies only inside those two areas, so selling a Cretan property does not remove the ability to let it short-term. And the EUR 20,000 and 40,000 penalties reported in the press relate to letting inside suspension zones.
This is a statement about today, not a guarantee about tomorrow. Both existing suspensions expire on 31.12.2026, so the year-end tax bill is the moment worth watching. We track this for the properties we manage in Chania, Heraklion, Rethymno and Agios Nikolaos.
Common mistakes
- Using the new scale to calculate tax on 2025 income. This is the most widespread misunderstanding and gives you a figure ten points too low on the 12,000 to 35,000 slice.
- Reading rates without checking which tax year they refer to. If a text does not state a year, you cannot use it.
- Counting properties per dwelling rather than per individual, and crossing into business activity without realising.
- Adding services beyond bed linen, thinking of it as good hospitality. It changes the tax category.
- Leaving registry registration until after the first booking.
The climate resilience levy: who owes it, and how much
On top of income tax, every short-term rental night carries the climate crisis resilience levy, the successor to the old stayover tax. Since 1.1.2025 the amounts are: 8 euros per night from April through October and 2 euros from November through March. If the property is a detached house of more than 80 square metres, the levy rises to 15 and 4 euros respectively; a house of exactly 80 square metres stays on the base rate. It is charged per property and per night, not per person, and carries no VAT.
The levy is owed by the guest, but collecting and remitting it is the manager's job: a special receipt is issued before departure and the amount is remitted with a monthly return on myAADE, by the end of the following month. No nil return is needed for months without stays, and stays spanning two months with different rates are charged month by month. Mind the most expensive oversight of all: the platforms do not collect this levy for you. If you do not charge the guest yourself, you pay it out of your own pocket. For the properties we manage, collection and the monthly returns are part of our job.
When you definitely need an accountant
If you have three or more properties, if you are considering transferring a property that is already let short-term, if you provide or intend to provide services beyond bed linen, or if the activity runs through a company, an article will not settle it. You need a tax professional.
We work with ΤΕΧΝΟΟΙΚΟΝΟΜΙΚΗ S.M LTD and can introduce you for exactly these questions, so that the letting model is chosen knowing its tax consequence rather than discovering it afterwards. Tax services are not part of the management agreement; they are agreed separately between you and the tax professional.
