The ‘tangle’ of the rental market is called upon to unravel the Finance ministry so as to limit the tax evasion “hiding” behind the low -declared income and “black money” that is being carried out under the table for the payment of real rents, according to ERTNEWS.
The planned measure of the Ministry of Finance that will make the payment of any rent through the banking system or other electronic payment average by 2026, does not solve the problem of “black leases” (ie tax evasion in income from rents) if it is not accompanied by the establishment of the landlords and Real and not a fictitious price.
The announced subsidy of a monthly rent for nearly a million households from autumn and some tax breaks for landlords are in the positive direction, however, do not seem enough to eliminate tax evasion.
When the gap between declared rents and real amounts paid is enormous, the subsidy of EUR 800 (plus 50 euros for each dependent member) does not register a strong incentive for tenants to request a statement from the owners.
However, if the new framework for electronic payment of rents is combined with strict terms, intersections and penalties for offenders, everything will evolve differently.
Already, for business rentals, it is true that only the amounts paid digitally deduct from gross income. The same standard is now transferred to private leases, making cash payments virtually invalid for the tax office.
In terms of intersections, it will be based on lease contracts, electricity consumption and new digital real estate registers.
Violators are planned to adopt the “model” applied to real estate trades when the payment is made by cash and not by bank means. By the applicable provision, the offenders are sentenced to a fine equal to 10% of the cash paid with the fine being a minimum of 10,000 and up to EUR 500,000 for each infringement.
For example, in the case of a property of a property worth 100,000 euros, the contract is canceled and taxpayers are confronted with a fine of 10,000 euros, which is 10% of the cash price.
The wide occult income in rents are revealed by the same information available to the Ministry of Finance (AADE in particular). Accordingly, the annual reported cost of housing rents amounts to just EUR 3,058, which corresponds to an average monthly rent of EUR 254.83, a size that has nothing to do with the actual market prices.
Tax cuts
To avoid social reactions and not to dismiss the cost of changes to tenants, the government is also considering interventions on the taxation scale of rents.
The aim is to mitigate the sharp escalation between current rates (15% – 35% – 45%) with intermediates or even a decrease in the original rate.
Today, rental incomes are taxed independently:
- 15% for amounts up to 12,000 euros,
- 35% for the section from 12,000.01 to 35,000 euros, and:
- 45% for income over 35,000 euros.
It is worth noting that a tax is estimated at 95% of income due to an automated 5% deduction for maintenance costs of the property.