Taxation on rents. Transfers of property and unpaid debts.
More than 3 million taxpayers will be taxed from 15% to 45% this year on real estate revenues earned in 2017.
In addition, these incomes will also be taxed with a special solidarity tax of 2.2% to 10%, provided that their total income for 2017 is over € 12,000.
According to the current legislation, real estate income is what comes from renting or subleasing, as well as the imputed income from the use of real estate or the free allocation of the use of real estate to third parties. This income may be acquired and declared by any natural person to whom the right of full ownership or right of domicile or habitual residence, as the case may be, has been legally transferred, by a court order, by a final contract or utility, etc.
Income from real estate property is also considered to be any amount resulting from the rental or sublease or free concession of the use of signs and public spaces, the amount of compensation for the premature termination of the lease paid by the lessee, the amount of the indemnity for the reclassification or non-contractual use of real estate property, and the amount of the intangible commercial value paid by the lessee on the letting of real estate property in the case of mixed contracts, that is to say contracts right of commercial exploitation of the property.
According to the “Eleftheros Typos” newspaper, 5% of gross real estate income is recognized without justification as a deductible amount of annual expenses for repair, maintenance, renovation or other fixed and operational costs of the real estate property yielding taxable income, irrespective of the type and use thereof. Also, expenditure on flood protection works and drying projects is deducted at a rate of 10% of gross income from renting, sublease, free concession and land use. In addition, the gross rental income of a real estate is deducted from the compensation paid by the landlord to the lessee (the landlord to the tenant) for the termination of the lease. In order to prove the amount of the costs for flood and drainage works and the amount of compensation for the termination of the lease of property, the supporting documents are receipts issued in accordance with the applicable provisions of the tax legislation.
The imputed income from free housing allocation of up to 200m2 to the children or parents of the taxpayer or to other relatives in the ascending or descending order from the blood or marriage relatives in order to be used as principal residence is not subject to tax.
Income from real estate is stated in sub-table D2 of Table 4 of the electronic tax return. This subsection lists all property income (from rental or sublease or from private use or free concession, etc.). The fields to be filled in the base codes 101-108, 111-114, 129-134 and 141-150 of sub D2 are pink. The amounts to be filled in these codes are all property income. These amounts are automatically transferred and supplemented by the TAXISnet system to these codes as soon as the taxpayer completes the completion and electronic submission of Form E2 “Detailed Statement of the Rent of Real Estate”, which must precede the submission of the E1 Declaration.
Form E2 shall not be completed in the case of:
(a) Payment of compensation for the early termination of the lease by the lessee and of the immaterial value in the case of mixed contracts, ie contracts where, in addition to the lease, the right to commercial exploitation of the property is included. These figures are shown in codes 121-122 of this table. It is noted that the clearing of the income tax stamp duty stamp and stamp duty of these cases is not assured, but their payment is regulated by the provisions of the stamp.
- b) Domicile of main or secondary residence (country/non-country house) or use for the needs of the taxable space (parking space, storage) in a different address from that of the main residence or secondary. In this case, nothing is added to sub-table D2 in Table 4, but only the indications in Table 5 (sub-box 1a) are completed, according to the instructions given below for completing it.
Rents that the owner has not been able to recover from his tenant during 2017 may also be declared separately in this year’s E2 form, bearing the title “ANALYTICAL SITUATION FOR LEASE OF REAL ESTATE”, and in separate codes on Form E1. In particular, unsecured rentals must be declared in column 16 of the first page of form E2 and then transferred to codes 125-126 of subsection D2 in Table 4 on page 3 of Form E1 of the tax return.
A separate indication of these amounts is necessary in order for property owners to be exempt from additional taxation. However, in order to declare these amounts in separate codes and not to be taxed, the other conditions laid down by law must be met. Thus, until the deadline for submitting the statement, the order for payment or order for the use of a medium or judicial decision to expel or to award a lease or to have an injunction against him / her have been issued against him / her. In particular, for the separate declaration of non-taxable rents and not to be taxed, the owner must provide before the electronic submission of the E2 and E1 forms to the competent tax office clear photocopies of the orders, court orders issued or actions have been exercised up to the deadline for submitting the income tax return.
How they are taxed
Net property income, i.e. amounts resulting from the deduction of deductible expenses from the gross amounts of property income, is taxed separately, at a scale at which tax rates apply:
(a) 15% up to the level of annual income of EUR 12,000.
(b) 35% in the annual revenue share from 12.001 to 35 000 euros.
- c) 45% in the annual income segment of more than 35,000 euros.
In addition, if a taxpayer who has acquired property income declares a total annual personal income of more than EUR 12,000, either from real estate property or from other sources, this total income is subject to a special solidarity levy, levied on a par with 2.2 % to 10% in the over 12,000 euro portion of income.