The rally recorded in rent prices in recent years has “inflated” the fez from unpaid rents.
Tenants who, while initially accepting and agreeing with the owner of the residence, shop or office on the rent increase, then under the burden and punctuality that gnaws away at the incomes, stopped paying the rents on time, resulting in the owners not only to not collect the amounts stated in the leases but also to risk paying a tax of 15% to 45% for non-existent incomes.
The AADE figures show that in the tax returns submitted in 2022 (2021 income) thousands of taxpayers declared that they did not collect real estate income totaling €12.5 million. With the explosion that has occurred in the last two years in the rental market, the number of landlords with uncollected rents is estimated to have increased significantly. In order for these taxpayers to be exempt from the tax, it is not enough to declare the amounts in their tax return. Before their annual appointment with the Tax Office, they should proceed with specific actions.
In particular, in order to zero out the tax burden, they should:
To have published against the lessee, a payment order or an order for the use of rent or a court decision to dismiss or award rents, or to have an action for dismissal or awarding rents brought against the lessee.
To testify to the Tax Office photocopies of orders, court decisions that have been issued or lawsuits that have been brought. If the required supporting documents for the declaration of uncollected rents are not submitted, then the amounts declared as uncollected income will not be taken into account and the Tax Office will proceed with a new liquidation of the declaration by taxing the specific amounts.
In case where the lessee is bankrupt, it is required to present a copy of the debt declaration table, in which the claim of the lessor / sublessor is shown.
By all the prescribed supporting documents that are presented to the DOU, as the case may be, should indicate the period of time for which rents are due.
The rents that were not collected during 2023, but also rents that were declared as uncollectible in the previous tax year and were collected in 2023, should be declared first on form E2 of the tax return and will automatically be transferred to E1.
If not submitted the required supporting documents then the amounts that have been declared as uncollected income will not be taken into account and the Tax Office will proceed with a new liquidation of the declaration by imposing tax on the specific amounts.
It is pointed out that based on the current scale, the annual net taxable income from rents is taxed independently from the first euro after previously deducting a percentage of 5% which is recognized as an expense for repair, maintenance, renovation and other operational needs of the rented properties.
Rental income is taxed as follows:
15% for the first 12,000 euros of income
35% for the next 23,000 euros, i.e. in the part of the income from 12,001 to 35,000 euros
45% for the part of the income over 35,000 euros.
For example, a taxpayer who obtained during 2023 a total rental income of 15,000 euros will be required to pay income tax on an amount of 14,250 euros (reduced by 5% due to an automatic imputed deduction of expenses for repair, maintenance and other operational needs of the rented properties).
The tax will be calculated as follows:
12,000 euros x 15% = 1,800 euros
2,250 euros x 35% = 787.50 euros
1,800 euros + 787.50 euros = 2,587.50 euros.
Therefore, the total income tax bill is 2,587.50 euros.
