Imputed income: changes and 30% cut

The government's economic headquarters, in its “agenda” for 2025, envisages a redesign of the imputed income system from a zero base, with changes in the way expenses are calculated and a reduction of them by 30%.

A special committee tasked with modernizing imputed income is currently reviewing microscope all potential costs on accommodation, cars, housing, purchasing goods, paying for private schools and yachts, and will then present its proposals for the type and scope of changes to increase income taxes on tax residents.

Goal: “to eliminate the distortions and inequities that cause hundreds of thousands of low-income citizens to pay disproportionately high taxes, since, as evidence shows, the majority of taxpayers caught in the net of the presumption of income are mainly employees and pensioners who “live” in at the very bottom of the tax scale, paying extra taxes because they live in rented or own housing and have a car.”

Notably, according to the latest tax return statistics, 547,827 workers who declared income of €1.46 billion were taxed at €2.84 billion, as the application of the presumption of wealth added a further €1.38 billion.

In addition, 465,238 pensioners who declared income of €992 million were taxed €2.29 billion on imputed income, paying significantly higher taxes.

“Inflated” declaration also received 377,292 private entrepreneurs and 91,045 farmers, who were taxed 1.78 billion euros and 328 million euros, respectively, in excess of imputed income.

Competent sources leave open the possibility that changes will be made to the way presumptions are covered, and any changes would correspond to an average reduction in presumption of 30%, which means a reduction in the cost of living:

• From €3,000 to €2,100 for a single or married person or civil partnership member who chooses to file their return separately from their spouse or partner or other civil partnership member.
• From €2,500 to €1,750 if he is married or in a civil partnership and decides to file a joint return with his spouse or the other party to the civil partnership.

It should be noted that the following presumptions currently apply under tax law.

Housing

Imputed income for the taxpayer's main place of residence is calculated based on its area on the following scale:

• Up to 80 m² of main premises – 40 euros per m².
• From 81 m2 to 120 m² main premises – 65 euros per m².
• From 121 m2 to 200 m² main premises – 110 euros per m².
• From 201 m2 to 300 m2 of main premises, EUR200 per m².
• From 301 m2 and above – 400 euros per m².

For auxiliary premises of the main residence inchanged income is 40 euros per square meter, regardless of the size of the property.

Imputed income should be increased:

• by 40% for housing located in areas with an objective price of 2,800 to 4,999 euros per square meter.
• By 70% for housing located in areas with an objective price of 5,000 euros per square meter or more.
• For detached houses, the above amounts increase by 20%, and for secondary housing they decrease by 50%.

It should be noted that imputed income applies to taxpayers regardless because whether they own the property themselves, rent it, received it for rent or for free use.

Cars

Imputed income for owners of passenger cars owned by taxpayers is calculated as follows. In the table below you can see the estimated cost for the most popular passenger cars on the Greek market:

Depending on the age of the car, amounts are reduced by 30% for cars over 5 and under 10 years old, and by 50% for cars over 10 years old.

Which vehicles are exempt? imputed income? Electric cars valued up to 50,000 euros (retail price before tax) are exempt from inclusion in the list of imputed income. For electric vehicles costing more than 50,000 euros, the imputed income is set at 4,000 euros. In addition, the imputed income does not apply to private passenger cars with a certificate of authenticity, that is, historical cars, as well as to cars specially adapted for disabled people with a disability rate of at least 67%.

Of course, to determine whether you can get the car you want based on your income, it's a good idea to consult with an accountant to avoid having to pay extra tax come tax season.

Boats/cutters/yachts

• For open motor boats, both high-speed and non-high-speed, up to 5 meters in length – 4,000 euros, and over 5 meters this amount increases by 2,000 euros per meter.
• For sailing, motor or mixed vessels up to 7 meters in length the amount is 12,000 euros,
  • over 7 meters and up to 10 meters – 3,000 euros for each additional meter of length,
  • from 10 meters to 12 meters – 7,500 euros for each additional meter of length,
  • over 12 meters and up to 15 meters – for each additional meter of length 22,500 euros are added,
  • for vessels longer than 15 meters and up to 18 meters – 22,500 euros,
  • for vessels longer than 18 meters and up to 22 meters – 30,000 euros,
  • for vessels longer than 22 meters – 50,000 euros.

Imputed income decreases depending on the age of the vessel: by 15% for ships older than 5 and up to 10 years from the year of registration, and by 30% for ships older than 20 years. For sailing ships the amount is reduced by 50%.

Swimming pools

For outdoor swimming pools the amount is 60 euros per square meter for an area of ​​up to 60 square meters. m and 320 euros per square meter for an area over 60 sq. m.

For indoor pools, the above amounts are doubled, and for communal pools in apartment buildings, the presumption is distributed among property owners, based on the mileage of each apartment on the site.

Aircraft:

• for gliders the amount is 8,000 euros,
• for aircraft with a common internal combustion engine and helicopters – 65,000 euros for the first 150 hp. With. engine power, with an additional 500 euros for each hp. With. over 150,
• for jet aircraft – 200 euros per kilogram of thrust.

Tuition fees

• Amounts paid for tuition in private schools and training centers.

Support staff

• Costs for au pairs, car drivers, teachers and other staff.

Loans and credit cards

• Amounts spent on repaying loans, credit cards, donations to private organizations in the amount of more than 300 euros and the purchase of real estate and movable property in the amount of more than 10,000 euros.

Living wage

Documentary costs of EUR 3,000 for unmarried persons and EUR 5,000 for spouses filing a joint return.

PS Many years of experience living in Greece, as well as close acquaintance with the country’s tax system, tells me that the redistribution of the tax burden “from the poor to the rich” is just words. Especially under the current Mitsotakis government.

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