ATHENS – The new New Democracy government, in a bid to crack down on tax evasion, is making rent payments mandatory through bank accounts instead of cash, which often is used to show a landlord is receiving less than being paid.
Cash transactions in violation of the requirement will be penalized because of widespread tax cheating, especially by owners who rent out their properties, said Kathimerini.
What spurred it was a case on the notorious tax dodging tourist island of Mykonos where the paper said a person who rented his property for 12 years at a monthly rent of 1,667.67 euros ($1,848) – when would triple in the final four years – but then declared it was a second home for vacations for him to avoid paying any tax.
Authorities say that payment through bank accounts would protect owners from delinquent clients and would help them prove non-payment and thus avoid additional taxes but it also means they can’t declare less than they are receiving.
But there could still be a loophole, with both sides drawing up a fake contract with a low payment being shown to have the owner avoid paying taxes although it wouldn’t benefit the rent payer.
Property incomes have their own rates, 15, 35 and up to 45 percent for rent incomes of more than 35,000 euros ($38,784.55) annually. Like all governments previously – who had failed – New Democracy vowed it would be the one to crack down on tax cheating although it’s been in power before and didn’t.