Uncollected Rent: Find out what you need to do to avoid paying taxes.

Property owners who have unpaid rent payments and will not take the necessary actions, risk facing taxes to 45%.

To avoid paying extra taxowners It is not enough to simply state that they had no rental income. Before filing a tax return (an electronic portal opens this year March 15) necessary:

• Issue an order for payment or an order for the return of the rental property to the tenant, or a judgment for eviction or judgment of rent, or file a lawsuit against the tenant for eviction or judgment of rent.
• Submit to the tax office copies of orders, court decisions or claims that have been filed. If the required documents are not provided to declare unpaid rent, the amounts claimed as unpaid income will be taxed in the normal manner.

In the event that the tenant has gone bankrupt, it is sufficient to provide a copy of the debt declaration table, which indicates the landlord/sublessor's claim. Of all the required documents that can be submitted to the tax office, the time for which rent is in arrears must be indicated.

Lease payments that were not received on 2024must first be specified in the form Ε2and will be automatically transferred to the form Ε1 tax return. If the required documents are not submitted, amounts claimed as unpaid income will not be taken into account and the tax office will re-examine the return, imposing tax on the reported income.

According to data ΑΑΔΕ (Ανεξάρτητη Αρχή Δημοσίων Εσόδων), more 4500 owners declared in their tax return for 2024that they did not receive income from real estate for the total amount 15 million euros.

The situation appears to be getting worse as rising rental rates increase the number of owners without income while demand for real estate is at historically high levels. This phenomenon is worrying as it is directly related to the difficulties of tenants in meeting increasing demands.

It is worth noting that, according to the current scale, the annual net taxable rental income is taxed on the first euro after deduction 5%which is recognized as an expense for repairs, maintenance, reconstruction and other operational needs of the rental property. Tax rates are as follows:

• 15% for the first 12,000 euro income;
• 35% for the next 23,000 euros, that is, for part of the income from 12 001 to 35,000 Euro;
• 45% for part of the income above 35,000 Euro.

Based on the above, the taxpayer who received 2024 total income 15,000 euros from rent, will be required to pay income tax in the amount of 14 250 euro (reduced by 5% due to the automatic deduction of expenses for repairs, maintenance and other operating needs of the rental property), and the tax will be calculated as follows:

• 12,000 euro x 15% = 1800 Euro;
• 2250 euro x 35% = 787.50 Euro;
• 1800 euro + 787.50 euro = 2587.50 Euro.

Thus the total tax amount will be 2587.50 Euro.

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