The Tax Department determines the procedures and prepares the documents for the mandatory payment of rents through bank accounts. The measure will come into force from July 1 and is included in the actions undertaken by the competent Department to deal with tax evasion and tax avoidance.
The competent authorities had before them many complaints, according to which property owners who have a lot of rental income do not record them in their tax returns. Under the new legislation, as of July 1, the payment of rent for real estate in the Republic must be made exclusively by bank transfer or by payment by debit or credit card, or through another recognized electronic means.
Under the new legal framework, payment by cheque or cash will not be allowed. At the same time, property owners must not accept the collection of rents in any other way.
Everyone wins
With the mandatory payment of rents through banks, both the state and the property owners, as well as the tenants, will benefit. The state will win, as it will collect more taxes.
On the other hand, landlords and tenants will win, as they will receive greater tax deductions from income tax. For example, in the case of tenants, they will receive a discount of €2,000 from income tax on rents and on the interest on a mortgage performing loan of the main residence, when the annual incomes exceed €22,000.
At the same time, they also benefit from the adjustment of tax scales. More specifically, for incomes from €22,001 to €32,000 the tax will be at 20%, for incomes from €32,001 to €42,000 the tax will be at 25%, for incomes from €42,001 to €72,000 the tax will be at 30%, while incomes over €72,001 will have a 35% tax.
The above regulations will be implemented in the tax year 2026 and will be included in the tax returns that will be submitted next year. However, those who violate the law will face sanctions.
It should be noted that, before the implementation of the legislation, an information note will be circulated by the Tax Department, with clarifications on the new measure, as well as on the obligations of property owners and tenants.
Through Tax For All, solemn declarations
In the meantime, yesterday the Tax Department, with its announcement, proceeded to inform about the procedure for submitting a solemn declaration for the non-subjection of lease and/or rental of real estate to VAT.
Specifically, based on the Notification of the Tax Commissioner, which was published in the Official Gazette of the Republic on April 3, 2026, the solemn declaration for non-subjection of lease and/or rental of real estate to Value Added Tax, Form T.F.1220 2026, is now submitted exclusively through the Taxpayer Portal Tax For All.
The application/declaration must be submitted within 30 days from the date of signing the lease. The Tax Commissioner has the right to approve another date, later than 30 days, for the submission of the application/return, upon request.
The application must be accompanied by a copy of the lease and/or rental agreement of the property, as well as a copy of the signatory's identity card and, for legal entities, a certificate of directors.
Finally, in case this form is submitted for part of the property, a relevant description should be attached.
