Tax-free rental income for 36 months – Who can still benefit before the deadline

The deadline is approaching for property owners who want to secure a three-year exemption from rental income tax on homes that they are returning to the long-term rental market for the first time in years.

The tax window closes on December 31, and time is already running out for those who want to take advantage of the incentive.

Despite proposals and requests to extend the measure beyond 2026, it remains unclear whether this will happen. Current indications are that the government’s economic team will likely make its final decisions toward the end of the year, alongside the submission of the 2027 Budget to Parliament.

However, as the Athens-Macedonian News Agency (ANA-MPA) reports, this uncertainty is putting many property owners in a dilemma. Since 2024, they have known that they could pay no income tax for three years on properties returned to the long-term rental market. The risk is that if September and the Thessaloniki International Fair pass without clarity on whether the incentive will be extended, those interested will have only a limited window to complete the necessary steps — potentially risking losing the tax benefit altogether.

“Time is money”

The only certainty for owners of homes that have remained vacant or have been used for short-term rentals (“Airbnb-style”) is that, provided they meet specific conditions and the lease is signed by December 31, 2026, they can secure a full exemption from income tax on rental income for three years (36 months) for each property they return to the long-term rental market this year.

The measure was introduced from the outset as an exceptional and temporary incentive. It had a clear expiration date, aimed at encouraging owners to return properties to the long-term rental market, increasing the supply of available homes and easing pressure on housing and rental prices.

With uncertainty over 2027 remaining, however, property owners face a double risk:

• On the one hand, rushing to rent out a property without properly checking the tenant, the lease and the technical requirements could create problems.
• On the other, waiting for a possible extension could mean missing the current deadline and losing the incentive.

It is worth noting that the December 31, 2026 deadline does not simply concern applications or preparations, but the completion of the eligible lease. This means a “100-day race” is now underway for those interested to complete all the necessary steps by late November or early December. Those still facing outstanding procedures after that point risk failing to complete them before the end of 2026 and losing the benefit they were seeking.

Which steps take time

The first step for property owners is to check — probably with the help of an accountant — the property’s tax history. Simply declaring that a property was “vacant” is not enough. The owner must be able to prove through the AADE platform that the property was declared vacant on the E2 form for the period required by law or, alternatively, that it had been registered as a short-term rental in the relevant registry.

The owner must then assess whether the property is practically suitable and ready to be offered for long-term rental. For homes that have remained empty for three years — or perhaps decades — this could mean painting, reconnecting electricity or water, obtaining certificates, electrical or plumbing repairs, replacing windows or flooring, renovating the bathroom or kitchen, checking heating and air conditioning, and carrying out basic energy and functional upgrades.

All of this takes time. Owners who know that their property needs work would therefore be well advised to start early.

Finding the right tenant will also take time, as will posting advertisements or choosing an estate agent, arranging viewings, negotiating with a prospective tenant and preparing the lease.

None of these steps, however, is enough on its own to “lock in” the tax exemption if the lease is not also electronically declared through AADE’s myProperty platform. Even if the owner and tenant have reached an agreement, signed documents or paid a deposit, none of these actions guarantees the tax exemption unless the eligible lease is properly submitted to AADE and all requirements are met.

For this reason, the safest approach is to have the tenant search completed and the lease signed by late November or early December, rather than leaving everything until the last minute and risking delays or unexpected complications.

Who qualifies and how the benefit can reach 45%

The tax exemption applies to individuals who convert into long-term rentals:

• a home that had been declared vacant for at least three years;
• a home that had previously been used for short-term rental.

The property must now be used exclusively as a residence, under an electronic long-term rental agreement.

The basic duration of the long-term lease is at least three years, as specified in the electronic rental agreement. A special provision applies to leases of at least six consecutive months to public-sector employees, teachers, doctors and nursing staff in the General Government, as well as members of the Armed Forces and Security Forces.

The measure applies to leases signed between September 8, 2024 and December 31, 2026. For vacant homes, the previous status must be documented through the E2 form. For properties previously used for short-term rentals, their previous use must be demonstrated through the relevant declarations and records.

How the benefit is calculated

The exemption begins in the month in which the relevant rental agreement is signed and applies to homes of up to 120 square meters, with an additional 20 square meters for each dependent child.

The measure does not mean that the owner is exempt from every tax or operating obligation associated with the property. The exemption concerns income tax of 15%-45% on rental income received during the relevant period. It does not, however, abolish ENFIA or expenses related to insurance or other obligations arising from ownership and rental of the property.

The benefit can be significant because rental income is taxed separately under a progressive tax scale. Therefore, an owner receiving rental income over three years can estimate the amount of tax they could save depending on the rental income generated by the properties they lease.

In any case, the exact benefit varies from one owner to another. It depends on:

• the monthly and annual rent;
• the duration of the lease;
• whether all eligibility requirements are met;
• the ownership structure;
• whether there are co-owners;
• and whether the rental agreement is correctly declared to AADE.