BUSINESS

Greek government going after undeclared rents

PROKOPIS HATZINIKOLAOU

TAGS: Property

The government, always on the lookout for more revenues, plans to make rent payment through bank accounts compulsory and to penalize cash transactions.

The reason for this is widespread tax evasion by owners who rent out their properties. But what prompted authorities to act was a rather extreme case regarding a property on the island of Mykonos. The person who rented the property declared it to the tax authorities, reporting a 12-year contract stipulating the monthly rent at 1,666.67 euros, which would triple during the final four years of the contract. The owner, on the other hand, reported the property as a second, vacation home.

Authorities say that payment through bank accounts would protect owners from delinquent clients and would help them prove nonpayment and thus avoid additional taxes.

Critics note that the two parties could draw up a bogus contract with an artificially low payment, which both parties could adhere to and save the owner having to pay higher property taxes.

Property incomes have their own rates, 15, 35 and 45 percent, the latter for rent incomes over 35,000 euros annually.

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