Thinking of Investing Overseas?
Written by Nick Holevas on January 7, 2019
As we are considering growing our vacation rentals business internationally, by converting an apartment in an Athens suburb in Greece, we have a lot of considerations to go through.
Greece follows the taxation model of Germany, by imposing a cash tax on vacation rentals. The Finance and Tourism Ministry recently passed a bill to tax peer-to-peer property rentals as unlicensed accommodation. Fines will be imposed to owners found to be renting out their property without a registration on Greece's tax platform and if they don’t fulfill certain criteria.
The rules are somewhat similar as the United States, where a property is either considered a rental and goes on Form Schedule E, or a business, and goes on Form Schedule C.
Once we identify the property as a short-term rental, we will then have to register it on, Greece's online tax platform. If we fail to do this, fines of up to 5,000 euros are due. We definitely do not want to pay 5,000 euros, so we will contact a local tax attorney to make sure we do everything right, before we even start the process.
Once registered, we would have to get a tax ID number specifically for that property, for us to operate the rental as a business.
Then we would have to file a tax return and pay any taxes due, for the revenue received on the rental.
The great news is that as rental real estate owners, we can expand all over the world, where online platforms such as Airbnb, and VRBO, TripAdvisor, are allowed. We just have to do research. Heck even in the US, there are municipalities that have restrictions on short-term rental owners (Asbury Park, NJ, and Austin, TX, for example).
Another consideration is that we must file the appropriate tax forms here in the USA for any income received from Greece, and pay the tax on it. The good news is that there is a treaty between our two countries, and we will not need to pay taxes twice, as the amount paid in Greece gets credited in the USA.
The main lesson here is, as a short-term rental owner in a foreign country, you must do your due diligence. Find a good team in the foreign country who can help you with tax matters; ask an attorney about the different entity structures you might want to pursue; take compliance seriously.
Also, ask your team in the United States if there are any complications, either legal or tax-related, that may arise by making an real estate investment in a foreign country. You do not want to be stuck in a situation where you did not file the appropriate tax foreign tax for with the IRS.
Of course, please be cautious. There are so many investment scams out there. You don't know if the person on the other side of the website is a crook. Everyone seems nice when they want your money. That's why I always suggest traveling to the country before investing in it.
We look forward to the day where we can help people internationally, create even more success in the short-term rentals business. 

Michael & Nick

Michael Davis helps real estate investors attract high-paying guests for their vacation rentals by designing  ideal spaces.  Nick Holevas helps real estate investors increase sales by pricing their rentals at an optimum price while being compliant with local and federal requirements. If you are a real estate investor interested in increasing the return on investment on your single family home, then definitely reach out and request a free strategy session today.
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