Tax break for long rentals
Gov’t offers incentives to owners so as to increase the supply of houses on the market
A three-year tax exemption will be granted to property owners who put their shuttered apartments on the market, as well as for those who switch from short-term to long-term lease, as per the plan that the government seems to be advancing with the aim of dealing with the housing crisis.
The new measures will be announced by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair this weekend and will be specified next Monday by the minister of national economy and finance, Kostis Hatzidakis, aiming to reduce the prices of residential leases.
According to the plan, those who open and lease (long-term) their properties for three years will be exempt for as many years from income tax. A necessary condition is that the properties were closed from 2023 until today. The data will be collected from the E2 and E1 forms of the tax returns in order to identify the number of beneficiaries. The measure will apply to individuals, however, it may be extended to legal entities that keep thousands of closed properties.
Those who shift from short-term to long-term tenancies will also be exempt from income tax for three years provided the property is rented out as a main residence for at least one of the three years.
As reported by the market, this transitional intervention is expected to lead to the opening of tens of thousands of properties and, combined with the other measures (“Renovate-Rent” and “My Home 2”), will also lead to a reduction in prices, which are currently particularly high.
It is noted that today rental income is taxed at rates of 15-45%. The first 12,000 euros of income is taxed at 15%, in the range from €12,001 to €35,000 the rate is 35%, and incomes of €35,000 and over are taxed at 45%.
With the new regime expected to be announced by the government, an owner who “opens” their house and rents it out, for example, for €500 a month (€6,000 a year), will save €900 a year from the tax office and a total of €2,700 in three years.
