By Chrysostomos Tsoufis

1 in 5 apartment renters and 1 in 3 business renters pay their rent late.

This results from a survey by KAPA RESEARCH on behalf of the Panhellenic Federation of Property Owners. Figures that have improved significantly compared to 2018 when the respective percentages of late payments were 38% and 49% (that is, in commercial properties half were late to pay).

Figures that have improved despite the fact that the landlords themselves admit that in the last three years they have significantly increased their “claims” from the tenants of their properties:

  • 86% say they have raised their rent by up to 20%
  • 12% admit an increase between 20% and 50%
  • 2% has increased the rent by more than 50%

Of course, market agents commented on that these are the increases that the owners themselves admit and that in fact the majority have increased prices by more than 20%.

In this context of a significant improvement in the image of the market and while a great debate has begun regarding which tax reductions should be included in the new round of tax reductions prepared by the government, P.OM.I.D.A. reinstates its request for the reduction of rental tax rates.

A request that has been in the drawer of the leadership of the Ministry of Finance since the days when Haris Theocharis was a part of it and which property owners describe as “frozen” at the time e.g. which has warmed up for good and ripens the request for the reduction of the rates of another scale, that of the taxation of the incomes of natural persons.

The Ministry of Finance admits that the way the rent taxation scale is structured, favors tax evasion. It would be very interesting for e.g. let’s see if the improvement in rent collection combined with the increase in interest rates shown by the Kapa Research survey has been passed on to the revenues that have entered the public coffers.

  • Under the current system, the first 12,000 euros of income are taxed at a rate of 15%.
  • From €12,001 to €35,000 the rate jumps to 35% and excess income has a rate of 45%.
  • A taxpayer with an income of 12,000 euros will pay a tax of 1,800 euros.
  • On an income of 15,000 euros, the tax rises to 2,850 euros

In this big gap between the first and second echelons they see in the ministry that tax evasion can….flourish.

Inserting one more intermediate coefficient would be the obvious solution for most.

The desire of the property owners according to information is to reduce the rates by 50%. Let’s go to a system with a rate of 7.5% for the first €12,000, 17.5% for the part from €12,001 to €35,000 and 22.5% for the excess.

They would not say no of course to a horizontal reduction of the rates by 10 points as a model with rates of 5% – 25% – 35% leads to the first bracket in which most taxpayers are concentrated in even more relief.

In “reserves» there is also the complete abolition of the system of independent taxation of rental incomes and their integration into the general income tax scale, which would favor low incomes or those who have incomes only from rents.

Apart from everything else, property owners raise a moral issue as they claim that all direct taxes have been reduced except for their own taxation. They believe that the current system is counterproductive as it pushes them into short-term renting which exacerbates the housing program facing the country.

The truth about the imbalance in the taxation scale is also demonstrated by the comparison with the rest of the European countries.

The Global Property Guide ranking shows that Greece for a monthly rent of up to 1500 euros has the 10th highest tax rate out of 35 countries.
But for higher rents, our country has the 3rd highest tax rate.