Declaring Rental Income in Greece: A Step-by-Step Guide

Table of Contents

1. Introduction to Rental Income in Greece
2. Understanding the Greek Tax System
3. Types of Rental Income in Greece
4. Legal Requirements for Landlords
5. Steps to Declare Rental Income
6. Tax Rates and Brackets for Rental Income
7. Deductions and Expenses
8. Special Cases and Considerations
9. Penalties for Non-Compliance
10. Tips for Efficient Rental Income Management
11. Recent Changes in Greek Rental Income Laws
12. Conclusion
13. FAQs

1. Introduction to Rental Income in Greece

Greece, with its stunning landscapes, rich history, and vibrant culture, has long been an attractive destination for property investors and landlords. Whether you own a cozy apartment in Athens, a seaside villa in Santorini, or a charming cottage in the Peloponnese, understanding how to declare rental income is crucial for legal compliance and financial success in the Greek real estate market.

This comprehensive guide will walk you through the intricacies of declaring rental income in Greece, ensuring that you stay on the right side of the law while maximizing your property investment returns. From understanding the Greek tax system to navigating the declaration process, we’ll cover everything you need to know as a landlord in this beautiful Mediterranean country.

2. Understanding the Greek Tax System

Before delving into the specifics of rental income declaration, it’s essential to have a basic understanding of the Greek tax system. Greece operates on a progressive tax system, where higher incomes are taxed at higher rates. The tax year in Greece runs from January 1st to December 31st, and tax returns are typically due by June 30th of the following year.

The Greek tax authority, known as the Independent Authority for Public Revenue (AADE), oversees tax collection and enforcement. As a property owner generating rental income, you’ll be dealing with this authority for your tax declarations and payments.

Key Components of the Greek Tax System

• Income Tax: Applies to various sources of income, including rental income
• Property Tax: An annual tax based on the value of your property
• Value Added Tax (VAT): Applicable to certain types of short-term rentals
• Social Security Contributions: May apply to some landlords, depending on their status

3. Types of Rental Income in Greece

In Greece, rental income can come from various sources, each with its own set of rules and regulations. Understanding these different types is crucial for proper declaration and taxation.

Long-term Residential Rentals

This is the most common type of rental income in Greece. It involves leasing a property to tenants for periods typically longer than one year. These rentals are subject to standard income tax rates and are relatively straightforward to declare.

Short-term Vacation Rentals

With the rise of platforms like Airbnb, short-term vacation rentals have become increasingly popular in Greece. These rentals are subject to different regulations and may incur additional taxes, including VAT in some cases.

Commercial Property Rentals

Renting out property for business purposes falls under this category. Commercial rentals often involve longer lease terms and may have different tax implications compared to residential rentals.

Agricultural Land Rentals

Leasing agricultural land for farming or other agricultural purposes is another form of rental income in Greece. This type of rental may have specific tax considerations and exemptions.

4. Legal Requirements for Landlords

Before you can start declaring rental income, there are several legal requirements you must fulfill as a landlord in Greece:

Property Registration

Ensure your property is properly registered with the Greek land registry (Ktimatologio). This is a crucial step for legal property ownership and rental.

Tax Registration Number (AFM)

All individuals and entities generating income in Greece must have a Tax Registration Number (AFM). If you don’t have one, you’ll need to obtain it from the local tax office.

Rental Agreement

A written rental agreement is mandatory for all types of rentals in Greece. This agreement must be registered with the tax authorities within 30 days of signing.

Energy Performance Certificate

For long-term residential rentals, you must provide an Energy Performance Certificate (EPC) for your property.

Short-term Rental Registration

If you’re offering short-term vacation rentals, you need to register your property on the AADE’s short-term rental registry platform.

5. Steps to Declare Rental Income

Now that we’ve covered the basics, let’s walk through the step-by-step process of declaring rental income in Greece:

Step 1: Gather Necessary Documents

Collect all relevant documents, including rental agreements, receipts for expenses, and proof of rental payments received.

Step 2: Calculate Total Rental Income

Sum up all rental income received during the tax year. This includes rent payments, any additional fees charged to tenants, and security deposits that were not returned.

Step 3: Determine Deductible Expenses

Identify and calculate all eligible deductible expenses related to your rental property. We’ll cover this in more detail in a later section.

Step 4: Complete the E2 Form

The E2 form is specifically for declaring rental income. Fill this out with details of your property, tenants, and rental income.

Step 5: File Your Annual Tax Return

Include your rental income and expenses in your annual tax return (E1 form). This should be done electronically through the TAXISnet system.

Step 6: Pay Any Tax Due

If you owe tax on your rental income, you’ll need to pay it according to the payment schedule provided by the tax authority.

6. Tax Rates and Brackets for Rental Income

Rental income in Greece is taxed at progressive rates, which means the tax rate increases as your income increases. As of 2023, the tax brackets for rental income are as follows:

It’s important to note that these rates are subject to change, and you should always check the most current tax laws or consult with a tax professional for the most up-to-date information.

7. Deductions and Expenses

To reduce your taxable rental income, you can deduct certain expenses related to your rental property. Here are some common deductible expenses:

Maintenance and Repairs

Costs for maintaining and repairing your rental property are generally deductible. This includes painting, plumbing repairs, electrical work, and other necessary upkeep.

Property Management Fees

If you use a property management company to handle your rentals, these fees are typically deductible.

Insurance Premiums

Premiums paid for insuring your rental property can be deducted from your rental income.

Property Taxes

The annual property tax (ENFIA) you pay on your rental property is deductible from your rental income.

Utility Costs

If you pay for utilities as part of the rental agreement, these costs can be deducted.

Depreciation

Greek tax law allows for depreciation of rental properties, which can be a significant deduction. The current rate is 4% per year for residential properties.

It’s crucial to keep detailed records and receipts for all expenses related to your rental property, as the tax authority may request proof of these deductions.

8. Special Cases and Considerations

While the general process for declaring rental income is straightforward, there are some special cases and considerations to be aware of:

Non-resident Landlords

If you’re a non-resident landlord (i.e., you don’t live in Greece), you’re still required to declare your rental income and pay taxes in Greece. You may need to appoint a tax representative in Greece to handle your tax affairs.

Multiple Properties

If you own and rent out multiple properties in Greece, you’ll need to declare the income from each property separately on the E2 form.

Vacant Properties

Even if your property was vacant for part of the year, you still need to declare this on your tax return. You may be eligible for certain tax relief for periods of vacancy.

Rental Income in Kind

If you receive rent in the form of goods or services rather than cash, this still counts as taxable income and must be declared based on its fair market value.

9. Penalties for Non-Compliance

Failing to declare rental income or providing false information on your tax return can result in severe penalties. The Greek tax authority takes tax evasion seriously, and the consequences can be significant:

• Fines: These can range from a percentage of the undeclared income to fixed amounts, depending on the severity of the violation.
• Interest: Late payment of taxes incurs interest charges.
• Criminal Charges: In severe cases of tax evasion, criminal charges may be filed, potentially resulting in imprisonment.

It’s always better to be honest and accurate in your declarations to avoid these penalties and maintain a good standing with the tax authority.

10. Tips for Efficient Rental Income Management

Managing rental income efficiently can help you maximize your returns and minimize stress during tax season. Here are some tips to help you stay organized:

Keep Detailed Records

Maintain a comprehensive record of all rental income and expenses throughout the year. This includes rent receipts, utility bills, repair invoices, and any other relevant documentation.

Use Accounting Software

Consider using accounting software specifically designed for landlords. This can help you track income and expenses, generate reports, and prepare for tax time more easily.

Set Aside Money for Taxes

As you receive rental income, set aside a portion for taxes. This will help prevent financial strain when it’s time to pay your tax bill.

Stay Informed About Tax Laws

Tax laws can change frequently. Stay informed about any updates or changes that might affect your rental income declaration.

Consider Professional Help

If you’re unsure about any aspect of declaring rental income, consider hiring a tax professional or accountant familiar with Greek tax law. Their expertise can save you time and potentially money in the long run.

11. Recent Changes in Greek Rental Income Laws

The Greek government periodically updates laws and regulations related to rental income. Some recent changes worth noting include:

Short-term Rental Regulations

Stricter regulations have been introduced for short-term rentals, including mandatory registration and potential limits on the number of properties an individual can rent out short-term.

Electronic Payments

There’s an increasing push towards electronic payments for rent, which helps authorities track rental income more effectively.

Tax Incentives for Renovations

The government has introduced tax incentives for landlords who renovate their properties to improve energy efficiency.

Always check for the most up-to-date information, as these laws can change rapidly.

12. Conclusion

Declaring rental income in Greece may seem daunting at first, but with the right knowledge and preparation, it can be a straightforward process. By understanding the Greek tax system, knowing what income to declare and what expenses you can deduct, and staying compliant with all legal requirements, you can successfully navigate the world of Greek rental income taxation.

Remember, transparency and accuracy are key when it comes to tax declarations. Not only does this keep you on the right side of the law, but it also helps you maintain a clear picture of your rental property’s financial performance.

Whether you’re a long-time landlord or just starting your journey in the Greek real estate market, proper management and declaration of your rental income is crucial for your success. Stay informed, keep good records, and don’t hesitate to seek professional help when needed. With these tools at your disposal, you’ll be well-equipped to make the most of your rental property investment in beautiful Greece.

13. FAQs

Q1: Do I need to declare rental income if I only rent out my property for a few weeks each year?

A1: Yes, all rental income, regardless of the duration, must be declared. Even if you only rent out your property for a short period, you are obligated to report this income to the Greek tax authorities.

Q2: Can I deduct the cost of furnishing my rental property?

A2: The cost of furnishing a rental property is typically not immediately deductible. However, you can depreciate these costs over several years. Consult with a tax professional for the most current rules on furniture depreciation in rental properties.

Q3: What happens if I accidentally make a mistake on my rental income declaration?

A3: If you realize you’ve made a mistake on your tax return, it’s best to file an amended return as soon as possible. If the tax authorities discover the error first, you may face penalties. Being proactive in correcting mistakes shows good faith and can help mitigate potential consequences.

Q4: Are there any tax benefits for long-term rentals compared to short-term rentals?

A4: While both types of rentals are subject to income tax, long-term rentals often have simpler regulations and may be viewed more favorably by local authorities. Short-term rentals may be subject to additional regulations and potentially higher tax rates in some areas. Always check the most current local laws for specific differences.

Q5: Can I offset losses from one rental property against profits from another?

A5: In Greece, rental losses from one property can generally be offset against rental income from other properties. However, there are limitations and specific rules about how these losses can be carried forward. It’s advisable to consult with a tax professional to ensure you’re applying these rules correctly to your specific situation.

Article reviewed by Everett Bellingrath, CEO | Business Growth Consultant | Transforming Mid-Sized Companies Through Operational Efficiency & Market Expansion Strategies, on March 3, 2025