ECONOMY

Government pondering ways to support landlords

government-pondering-ways-to-support-landlords

The Finance Ministry is considering measures to support property owners forced to contribute toward supporting enterprises and workers through the temporary reduction of their rents by 40 percent. Some of the measures may apply from this year.

Speaking on Mega TV on Wednesday, Minister Christos Staikouras said the government will soon announce its initiative for supporting landlords. He said what is currently being examined is whether that will apply in 2020 or be activated with the tax declarations of 2021.

Staikouras did make it clear that taxpayers who see their rental incomes shrink this year due to the pandemic measures will be asked to submit a special declaration of losses on the online platform of the Independent Authority for Public Revenue, to account for the rent they have not collected and provide a receipt for the payment of the reduced rents.

There are two ideas under consideration, with the first one being an income tax exemption for the rental revenues made in the months when tenants only paid 60 percent of the monthly rent. Property owners will need to submit declarations of losses and therefore will pay less in tax in 2021. It is noted that rental revenues are taxed separately from other earnings, at a 15 percent rate for annual revenues up to 12,000 euros, 35 percent for the next €23,000 (from €12,001 to €35,000 of annual takings) and 45 percent for any amount earned above €35,000 per annum.

For example, if a landlord rents his property to a company for €4,000 per month, he will receive €4,800 less in total for March, April and May. If those three months’ rent is not taxed, he would pay tax of €10,300 for the rest of the year (nine months) instead of the €15,700 he would pay for the entire year, thereby saving €5,400 euros.

The second idea provides for the doubling of the 5 percent discount on the taxable income from rents (for maintenance or renovation work) to 10 percent. It is possible this idea will be applied in combination with the first one.

Another possibility is a discount on this year’s Single Property Tax (ENFIA) for any landlords hurt by the rental reduction who also pays the 2020 ENFIA in a lump sum.