The announcements of Prime Minister Mr. Kyriakos Mitsotakis at the TIF include several positive regulations for the national economy, such as income increases and reductions in tax burdens, as well as the long-term and particularly useful measure of the New Generation “piggy bank”.
More specifically, in relation to this year’s announcements concerning private real estate property, POMIDA points out the following:
- There is no provision, although it is absolutely necessary, for a continuation in the reduction of capital and income taxes, namely ENFIA and income tax on rents, except for the special case of the ENFIA exemption in small settlements, which concerns only 62,000 owners.
- Also not included, although it is likewise absolutely necessary, is the extension of the three-year tax exemption for income from long-term leases to all closed properties without exception and all properties that are not currently rented under a long-term lease, properties, without exceptions, restrictions and conditions, provided they enter the market increasing supply, which is also the urgently sought objective.
- Also, nothing was said about a measure with no fiscal cost that the government itself has announced but has not implemented. We are referring to the credit assessment of prospective tenants, which would provide a basic sense of security to the owner and could also lead to a reduction in rent levels since the highly deterrent factor of the insecurity of every new lease would disappear to a significant extent.
A. More specifically regarding the measures that were announced:
The following are considered positive measures: the extension of the three-year exemption from income tax for vacant homes entering the long-term rental market and for homes leaving the short-term rental market, the extension of the tax deduction of €16,000 for building upgrade expenses and the VAT exemption on new buildings, which however needs very serious improvement in its terms, as well as the extension of the ENFIA exemption to 131 additional settlements.
The following are considered ineffective measures: the annual extension for 2027 of the restriction on new short-term rentals in the three municipal districts of Athens and in Thessaloniki’s 1st district, and the increase from 1.7.2027 of the transfer tax for the purchase of a home by citizens – natural persons of third countries (outside the European Union), increasing from 3% to 15%.
B. The measures that were missing from the announcements, which are those that will open the “closed homes”, increasing supply and benefiting owners but above all tenants, are in our opinion the following:
- Extension and expansion of the three-year tax exemption from rental income tax to every home that is currently unrented (newly built, renovated, newly acquired, owner-occupied, granted free of charge, or owned by legal entities), as an exceptional incentive for the immediate supply to the long-term rental market of a huge number of homes throughout the country.
- Reduction of the tax rates on rental income by 5% in the three brackets that were not reduced last year.
- Implementation of the solvency assessment of prospective tenants, which will radically change the way the market operates in favor of genuine tenants.
Also, from the measures for ENFIA, at least the following were missing:
- Increase of the discount due to home insurance from 20% to 50%.
- A 3% discount for its lump-sum payment by consistent taxpayers.
- Abolition of the main ENFIA tax for listed buildings.