BUSINESS

Which firms deserve rent reduction

PROKOPIS HATZINIKOLAOU

TAGS: Property, Taxation

The Finance Ministry reached a decision on Tuesday as to which enterprises have been hurt by the pandemic and deserve a 40% discount on their rent for September.

The decision signed by Deputy Minister Apostolos Vesyropoulos concerns enterprises in the sectors of transport, food catering, tourism, culture and sport, while the list further includes professionals involved in the production, manufacturing and sale of furs.

The ministry has also determined which other enterprises hurt by the pandemic can negotiate a rent reduction of at least 30% with their landlords for September. They include corporations in a large section of commerce, such as the fields of cosmetics, advertising, apparel, flowers, gifts, and the trading of food, drink, tobacco and textile products.

In cases of both mandatory and voluntary rent reductions, landlords will qualify for a tax discount offset by income tax or Single Property Tax (ENFIA) dues. As far as mandatory cuts are concerned, the state’s compensation will amount to 30% of the revenues lost. If the rent cut is voluntary, the tax rebate will amount to 12% of the original amount. This means that for a monthly rent of 1,000 euros with a reduction of €300, the state’s contribution will come to €120, or a maximum of 40% of the losses. The greater the discount agreed, the lower the state support percentage will be.

Crucially, while mandatory rent reductions end on Wednesday, the voluntary cuts can apply until the end of the year. The reduction agreement will have to be submitted to the Independent Authority for Public Revenue, and the rent will have to be paid in time, by the end of each month.

The voluntary rent reductions apply to commercial lets leased by corporations that continue to suffer as a result of the pandemic, and concern the period from September to December 2020. It also applies to main residence rent contracts where the tenant is a worker or the spouse of a worker in one of the above types of enterprises whose labor contract has been temporarily suspended. It also concerns properties rented by the children of those workers if they are studying away from home.

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