Starting in September, the “big eye” of the tax office will delve into the real estate of over 7 million taxpayers. The “Property Ownership and Management Register” is a new database that will be connected to the Land Registry. This register will record complete details of properties such as area, location, floor, whether it has electricity, if it is unfinished or vacant, and the amount of co-ownership. It will also include additional information like whether the property is rented or granted free of charge, the rental amounts, and tenant details. The connection with the Land Registry will enable the Independent Authority for Public Revenue (AADE) to quickly cross-check for undeclared properties, false information, or undeclared rents.
The new file will include all the information from the “electronic asset register” created with the E9 declarations of individuals and legal entities, as well as from the E2 declarations for property leases. This information will be transferred automatically without taxpayer intervention.
Benefits of Digital Data
These digital data will allow the Tax Administration to compare them with tax declaration data to identify property owners who have concealed properties or declared smaller areas to avoid paying property tax (ENFIA), income tax, presumptive taxation, municipal fees, etc., or to evade penalties for potential unauthorized constructions. The Register will also automatically update every time an informational rental declaration is submitted by a property owner and accepted by the tenant. It will also update automatically whenever an owner declares the termination of a property lease. This way, AADE will have a complete and accurate picture of who is collecting rent from residential properties.
Integration with Tax Declarations
According to AADE officials, by linking the Register with the electronic file of income tax returns of individuals and legal entities, it will be possible for the incomes generated by owners from their real estate exploitation to be pre-filled by the Independent Authority on their E1 and E2 tax forms, and for tenants’ rental payments to be pre-filled on the E1 form.
Connection with the Land Registry
Moreover, the electronic Register data will be linked with the Land Registry. The data collected from Land Registry entries nationwide will allow AADE to cross-check them with the E9 and E1 forms. This will ensure that taxpayers have declared the properties they own and that the characteristics like area, type, use, location, year of building permit issuance, and other details match those recorded in the Land Registry services. This capability will enable quick cross-checks by the auditing authorities to identify taxpayers who submit fictitious E9 declarations to obtain tax exemptions pay less tax than what corresponds to the actual value of their real estate or even to illegally collect social benefits.
