The Minister of Finance, Kyriakos Pierrakakis, is reportedly preparing a significant reduction in tax rates for rental income, while also considering a revision of the existing three-year tax exemption measure.
According to reports, the government’s plan includes a reduction in the minimum tax rate from 15% to 5% or 7% for income from long-term leases up to 5,000 euros. This is expected to result in an annual benefit of 300 to 500 euros for thousands of property owners. Additionally, the gradual reduction of higher tax brackets is being considered to provide broader relief for owners with larger rental incomes.
The current tax scale imposes separate taxation of rental income with rates of 15%, 35%, and 45%, depending on the level of annual income. Furthermore, a 5% automatic deduction is allowed from the declared amount, as a presumed maintenance expense, without the need for supporting documentation.
Regarding the existing provision for the three-year tax exemption, which applies to cases of renting out properties that remained vacant or were used for short-term rentals, significant issues have been identified. The restrictions on the duration of the lease and the consequences of a possible interruption made the measure impractical, discouraging many owners from utilizing their properties.
The Ministry is reportedly planning to modify the relevant provision, reducing the minimum lease duration to one or one and a half years and allowing successive leases within a three-year period. This would cover more cases, such as those of public servants and military personnel. In this way, the goal is to enhance the availability of long-term rental housing without the stringent conditions that have applied until now.
Source: "Eleftheros Typos," "Kathimerini," "RED"
