Undeclared income from rentals in tourist areas and major urban centers has brought hundreds of foreign property owners in Greece under the microscope of AADE. These are citizens of EU countries and the Balkans who exploit homes and holiday properties in Crete, the Cyclades, Halkidiki, Athens and Thessaloniki, generating revenue from short-term or long-term leases without declaring a single euro to the Tax Office. The phenomenon has reached such proportions that AADE has activated a wide network of electronic cross-checks using data from platforms such as Airbnb and Booking, as well as the international Common Reporting Standard (CRS) system of the OECD for the automatic exchange of tax information.

In practice, this is the first attempt to break a parallel circuit of undeclared real estate exploitation, which has been operating outside supervision in recent years. Foreign investors, mainly Germans, Poles, Romanians, Bulgarians, Belgians and Dutch, have bought houses in tourist zones through offshore companies or intermediaries, often registering them in the name of Limited Liability Companies. In this way, they avoid being declared as owners and avoid filing tax returns in Greece. At the same time, they do not declare the income generated from renting to tourists or permanent tenants, even though amounts in popular destinations exceed 30,000 euros per year.

The problem

AADE has identified dozens of such cases and has initiated targeted audits based on information drawn from rental platforms and the CRS system. The latter functions as an international radar of tax data: each country sends and receives information on bank accounts, dividends and income declared or deposited abroad. Thus, Greece can now detect foreigners who collect rent from Greek property without declaring it, as well as Greeks who maintain undeclared income in other countries.

However, the problem lies in implementation. According to tax administration officials, the exchange of data is not always complete: some non-EU states or countries with weak administrative capacity send incomplete data, allowing many investors to keep hidden revenue flows. Nevertheless, the Greek side has begun utilizing new digital tools to identify tax evasion cases through cross-checks with the databases of short-term rental platforms, the Real Estate Registry declarations and AADE’s data.

Indicatively, in Crete dozens of luxury homes were identified as being rented through international platforms without any reference to the Greek tax authority. These properties belong to foreign nationals who had acquired them through companies based in Bulgaria or Cyprus. Similar phenomena have been recorded in Mykonos, Santorini and Halkidiki, where auditors calculated tax evasion of tens of thousands of euros per property. In some cases, rents were paid into bank accounts abroad, something that makes tracking more difficult — but no longer impossible.

Cross-checks

Tax evasion from undeclared rentals is estimated at tens of millions of euros annually, with the amounts concentrated mainly in tourist hotspots. According to AADE officials, this practice also distorts prices, since owners who do not pay taxes can offer lower rents or higher yields, putting pressure on legitimate short-term rental businesses.

The new phase of audits provides for targeted cross-checks for every foreign tax ID or company that owns property in Greece. AADE checks whether rents collected have been declared on form E2 and whether they match bookings on the platforms. If discrepancies are found, a fine equal to 100% of the undeclared tax is imposed, while retroactive taxation of up to five years is also provided. Notifications have already begun being sent to foreign owners via the myAADE platform with a deadline to submit corrective returns.

At the same time, a legislative regulation is being promoted for stricter monitoring of properties owned by foreigners. The regulation will provide for mandatory registration in the Real Estate Ownership Registry for every foreign individual or company that holds property in Greece, with automatic connection to Taxis and the National Land Registry. Thus, every transfer or exploitation will be monitored electronically and the tax administration will be updated automatically.