Prime Minister Kyriakos Mitsotakis announced a significant new tax reduction on rental property income, setting specific conditions. The tax relief will be implemented provided there is an increase in declared rental income. Speaking to SKAI TV, the Prime Minister emphasized: “I have committed that if we see an increase in declared rental income, I am ready to reduce rental taxation next year. I believe this creates a positive cycle of compliance, with money ultimately returning to society.”
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Rental income tax reduction: Massive gap between actual and declared amounts
Official data from the Ministry of National Economy reveals a striking difference between actual rental prices and declared income. In 2023, the average declared income for primary and student housing reached just €255 monthly.
In contrast, according to Spitogatos.gr data for the same period, the average asking rent in central Athens reached €10 per square meter. In southern suburbs, prices reach up to €12 per square meter. A typical 80-square-meter apartment in the city center costs approximately €800 monthly, while comparable properties in southern suburbs can exceed €950. Real prices are up to four times higher than amounts appearing in tax returns.
Causes of rental income underreporting
The significant gap is mainly due to extensive underreporting of rental income or complete concealment of property rental revenues. Cash transactions and avoidance of official lease agreements contribute to perpetuating this phenomenon.
Additional tax return data shows that average monthly rent expenses for primary residence reached €211 per taxpayer in 2023. For student housing, the corresponding average expense was €173. In 2019, average rent expenses amounted to €186.
New tax brackets for property income from 2026
A new tax scale for rental property income takes effect from 2026. The reform will benefit approximately 150,000 small property owners, who will see related reductions in 2027 when filing their tax returns.
The new progressive scale will be structured as follows:
• Income €0 to €12,000: tax rate 15%
• Income €12,001 to €24,000: tax rate 25%
• Income €24,001 to €35,000: tax rate 35%
• Income €35,001 and above: tax rate 45%
Specific example of benefits from the new tax reduction
A property owner with rental income of €20,000 currently pays €4,600 to tax authorities. With the existing 5% discount, the tax amounts to €4,370. From 2026, under the new scale, tax is reduced to €3,800. After the 5% discount, the final tax drops to €3,610. The total annual benefit for the property owner reaches €760.
