Greece ranks in 8th place among 42 European nations in taxing income coming from rented properties, says a Global Property Guide report.
The new tax rates on income from rented properties have made real estate investment in Greece less attractive, the report says. The new tax rate stands at 21 percent, putting Greece in 8th place among 42 European countries.
Switzerland has the highest tax rate for rented properties (48.55 percent) followed by Norway (27.67 percent). Portugal comes third at 26.44 percent.
In contrast, there is no tax on income from rent in Great Britain, Luxembourg and Monaco. In Cyprus, rental income is not taxed separately but is included in the taxpayer’s total income, deducting 20 percent from the rental income.
The tax on rental income is separate from the single property tax (ENFIA). For those who own properties valued above 200,000 euros, the combination of rental tax and ENFIA can be up to seven or eight months’ rent. This makes investment in real estate very unattractive, both for foreign and Greek investors.
At the same time, the report says, rental prices have dropped up to 40 percent since 2011 to date, while the delays in rent payments due to the recession have bothered 90 percent of property owners. At the same time, the state does not offer owners any tax breaks for maintenance and repair of their properties.