Greece Offers Three Years of Tax-Free Rental Income

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Greek property owners are approaching a crucial deadline if they want to secure a three-year exemption from income tax on rental income for homes they return to the long-term rental market after years of being vacant or used for short-term rentals.

The tax incentive expires on December 31, 2026, and the countdown is already underway.

Despite calls to extend the measure beyond 2026, it remains unclear whether the government will do so. Final decisions will likely come toward the end of the year, alongside the submission of the 2027 Budget to Parliament.

The uncertainty creates a dilemma for many property owners who want to take advantage of the existing incentive and pay no income tax for three years on qualifying rental properties.

If September and the Thessaloniki International Fair pass without clarity over an extension, owners will have increasingly little time to complete the necessary steps and secure the tax benefit before the deadline.

Time Is Money

For owners of homes that remain vacant or operate as short-term rentals, the key fact remains clear: if they meet the eligibility requirements and conclude the qualifying lease by December 31, 2026, they can secure a full income tax exemption on three years of rental income — 36 monthly rents.

The measure began as a temporary incentive designed to encourage owners to return properties to the long-term rental market. Its goal was to increase the supply of available rental homes and ease pressure on housing and rents.

With uncertainty surrounding 2027, owners face a double risk.

On one hand, rushing to rent a property without properly checking the tenant, lease and technical requirements could create problems.

On the other hand, waiting for a possible extension could leave owners without enough time to complete the necessary procedures and ultimately cost them the tax incentive.

Importantly, the December 31 deadline does not simply concern applications or preparations. Owners must complete the eligible rental arrangement by that date.

This effectively creates a 100-day race, with late November or early December representing a practical target for owners who want enough time to complete all the necessary steps without operating under extreme deadline pressure.

Which Steps Take Time?

The first step involves checking the property’s tax history, probably with the assistance of an accountant.

Simply declaring that a property was vacant is not enough. The owner must be able to demonstrate through the Independent Authority for Public Revenue (AADE) platform that the property appeared as vacant on the E2 tax form for the period required by law.

Alternatively, owners must demonstrate that the property previously operated as a short-term rental through the relevant registry.

Owners must then determine whether the property is actually ready for long-term rental.

Homes that have remained vacant for years — or even decades — may require painting, reconnection to electricity or water networks, certificates, electrical or plumbing repairs, replacement windows or flooring, bathroom or kitchen renovations, heating and air-conditioning checks, and basic energy or functional upgrades.

All these tasks take time, making an early start particularly important for properties that need work.

Finding a suitable tenant also takes time. Owners may need to advertise the property, appoint a real estate agent, arrange viewings, negotiate terms and prepare the lease.

However, none of these steps alone secures the tax exemption.

The owner must also electronically register the qualifying lease through AADE’s myProperty platform.

Even after reaching an agreement with a tenant, signing documents or receiving a deposit, the owner will not secure the tax benefit unless the eligible lease is properly submitted to AADE and all requirements are satisfied.

For this reason, owners who want to avoid last-minute complications should ideally complete the tenant search and sign the lease by late November or early December.

Who Qualifies for the Tax Exemption?

The exemption applies to individuals who convert the following properties into long-term rentals:

• A residential property declared vacant for at least three years.
• A residential property previously used for short-term rental.

The property must then serve exclusively as a residence under an electronic long-term rental agreement.

The standard long-term lease must last for at least three years, as stated in the electronic lease.

A special provision applies to leases of at least six consecutive months for public servants, teachers, doctors and nursing staff in the General Government, as well as members of the Armed Forces and security services.

The measure applies to qualifying leases concluded between September 8, 2024 and December 31, 2026.

For vacant properties, the previous status must appear on the E2 tax form. For properties previously used for short-term rentals, owners must demonstrate their previous use through the relevant declarations and records.

How Much Can Owners Save?

The exemption begins in the month in which the qualifying lease starts and applies to homes of up to 120 square metres, with an additional 20 square metres allowed for each dependent child.

The measure does not eliminate every tax or operating cost associated with owning a property. It specifically exempts qualifying rental income from the 15%-45% income tax that would otherwise apply during the relevant period.

Owners must still pay ENFIA, Greece’s property tax, as well as insurance and other costs associated with owning and renting the property.

The potential saving can nevertheless prove substantial because Greece taxes rental income separately according to a progressive scale.

The exact benefit varies from owner to owner and depends on:

• Monthly and annual rental income
• The duration of the lease
• Whether all eligibility requirements are met
• The ownership structure
• Whether the property has co-owners
• Whether the lease is correctly declared to AADE

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