Government’s Plan to Combat Tax Evasion and Boost Real Estate Supply

The lack of supply, high rents, and tax evasion are among the key issues the government is facing in the real estate sector. To address these challenges, the government is emphasizing the strengthening of the construction industry and the real estate market, aiming to increase housing stock through both new constructions and upgrading existing buildings. As Deputy Prime Minister Kostis Hatzidakis recently highlighted, this strategy is a top governmental priority and is being implemented through five intervention packages. These include adjusting the social rent scheme to make it more attractive and effective, along with additional tax initiatives depending on the overall state budget and national economy. Recent decisions such as returning one rent payment to tenants and extending 100% tax relief for energy and aesthetic upgrades until 2025 underline the importance given to the housing issue. The interventions also involve reducing property taxes significantly, including cuts to ENFIA, VAT suspension, and luxury taxes, alongside tax exemptions for properties rented out or converted to long-term rentals. Simultaneously, programs like ‘I Save’ and ‘I Renovate – I Rent’ aim to boost housing supply, while public property utilization is improved via the establishment of social rent. A central authority for managing social housing is planned, along with an electronic registry of eligible recipients. Improving the regulatory framework through Local and Special Urban Plans and legislative changes to the New Building Code (NOC) are also underway. The government seeks to balance modern urban rules, property ownership retention, family support, and regional development. Horizontal initiatives include forming a permanent inter-ministerial committee on housing, developing a digital platform for citizens, and creating an observatory to monitor prices and resource absorption. Notably, 2024 saw a record of €2 billion in direct foreign investments in real estate. Controls to limit tax evasion have also been intensified, with sweeping audits on 2,500 cases of cash property transactions since 2019. Emphasis is placed on transactions deviating significantly from declared values, first-home exemptions, and parental gifts up to €800,000. Cash transactions are now banned, and from January 1, 2026, all rent payments must be made via bank accounts. Enhanced controls and cross-checks using electricity consumption data and the upcoming Property Ownership and Management Registry (MIDA) will identify falsely declared vacant properties, which result in tax avoidance.