Three-Year Tax Break for Landlords Renting Vacant Properties – Major Changes for Larger Homes

Incentives to Unlock Vacant Homes

Thousands of homeowners hesitant to rent out their properties now have a strong incentive. Under the new measures included in the Finance Ministry’s tax reform bill, landlords who transform vacant or short-term rental homes into long-term leases can enjoy 36 months of tax-free rental income, provided they meet the eligibility criteria and deadlines. The reforms aim to increase long-term rental housing availability, especially for families with children, doctors, teachers, and uniformed personnel.

Eligibility and Duration

The tax break applies to homes vacant for at least 36 consecutive months before rental, initially up to 120 square meters. For families with three or more children, the size threshold increases:

• Three children: up to 140 sqm

• Four children: up to 160 sqm

• Five children: up to 180 sqm, plus 20 sqm per additional child

Exemptions remain valid until December 31, 2026, and consecutive rentals within this three-year period continue to qualify. If a tenant leaves early, landlords have three months to find a replacement without losing the benefit.

Requirements for Declared Vacancies
To qualify, properties must have been declared “vacant” on the E2 form for three consecutive years prior to leasing, or registered as short-term rentals for at least one year before conversion to long-term leases. This ensures transparency and prevents abuse of the tax relief.

Flexibility for Public Sector Tenants
The new framework allows shorter leases of at least six months for tenants such as teachers, doctors, or uniformed officers, who often relocate before completing three years. Consecutive leases to such tenants still count toward the full exemption.

Loss of Exemption

The three-year tax break is forfeited if:

• No new tenant is found within three months of a vacancy

• The property is temporarily listed for short-term rentals, including platforms like Airbnb

In such cases, landlords retain the exemption for previously received rent but future income is taxed at normal rates, and retroactive penalties may apply.

Practical Examples

• An 85 sqm apartment declared vacant in 2023–2025 does not qualify until January 1, 2026.

• Homes converted from short-term rentals in 2024 become eligible immediately, provided all other conditions are met.

• On islands, if a teacher leaves early and a replacement tenant qualifies, the exemption continues uninterrupted.

The updated tax relief framework balances incentives for landlords with protection for long-term tenants, encouraging the availability of larger and more sustainable rental homes across Greece.

Source: pagenews.gr