Greece to Introduce New Tax Incentives for Tenants to Curb Undeclared Rent

The Greek government is set to roll out tax incentives for tenants and reform property income taxation to tackle undeclared rent payments.

The changes, which aim to expose “under-the-table” transactions, will benefit tenants and adjust the tax scale for property owners.

Key Changes in Rental Taxation

1. Tax Deductions for Tenants: The government plans to allow tenants to deduct 50% of rent from taxable income or 10% from final tax, encouraging accurate reporting of rent amounts to reduce tax evasion.
2. Undeclared Income Issue: Significant rental income goes unreported, costing the state hundreds of millions annually and undermining tax collection efficiency.
3. Revised Tax Scale for Owners: New tax rates, potentially 20% or 25% for incomes between €12,001 and €20,000–€25,000, will be added to the existing 15%–35% scale.
4. Targeted Beneficiaries: Tax exemptions will primarily benefit primary residence tenants, student families, and those with secondary residences.
5. Long-Term vs. Short-Term Rentals: The new tax scale may apply only to long-term leases, leaving short-term rentals like Airbnb under the current regime.
6. Personalized Exemptions: Tax relief will vary based on income, family status, and rent amount, prioritizing lower-income households.
7. Implementation Timeline: Final decisions are expected post-June 2025, contingent on budget performance, global economic trends, and fiscal constraints.

These reforms aim to enhance transparency in the rental market, provide financial relief to tenants, and ensure fairer taxation for property owners.