Starting in 2026, all rental payments must be conducted electronically, requiring tenants to transfer the agreed-upon amount directly into the landlord’s bank account.
Cash payments or direct transactions will no longer be recognized for tax purposes, and strict penalties may apply to both landlords and tenants. While this regulation is still under review, it serves as a key initiative from the Ministry aimed at reducing tax evasion, which is reflected in property rental income reports.
This regulation is informed by findings indicating a significant gap between reported and actual incomes. The Independent Authority for Public Revenue (AADE) reveals that the average declared rental income for primary residences in 2023 was only €255 per month, whereas actual rental prices in Attica are notably higher, often exceeding €800 to €1,000. Currently, cross-checks are underway for cases where landlords have reported significantly lower rents, and the new framework aims to establish a fully controlled and digital housing market.
Bank payments have been utilized since 2020 for commercial leases, where bank transfers are necessary for expense recognition. This approach is now being expanded to residential leases, in hopes of increasing transparency and an accurate representation of the market.
During the 3rd Real Estate Conference, Minister of National Economy Kyriakos Pierrakakis addressed the issue of transparency, stating: “It is widely accepted that the average rent in the country is not €255. The actual figures are clearly much higher, and we need tools to accurately reflect this reality.” With a focus on audits and cross-verifications, the government aims to address a substantial tax gap that results in millions in annual losses.
However, implementing this measure comes with challenges. Past experiences suggest that some landlords and tenants may still engage in fictitious leases, reporting lower “official” amounts while continuing cash transactions. Furthermore, many individuals—particularly the elderly and vulnerable populations—may struggle with electronic payments, creating potential burdens for small landlords who have not previously adhered to accounting practices.
This new system will necessitate continuous monitoring of bank accounts, transaction tracking, and alignment with tax declarations—a process that may not be straightforward for everyone.
Officials from the Ministry of Finance acknowledge that strict sanctions will accompany this measure. They emphasize that there will be both incentives and penalties. For instance, the existing regulation on real estate transactions imposes a 10% fine on payments made outside the banking system. Fines can range from a minimum of €10,000 to €500,000, with the possibility of contract cancellation in cases of cash payments. Ministry representatives indicate that AADE is already conducting audits and plans to extend this scrutiny to rental agreements as well.
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