Tax relief for property owners of "renovate-rent"

Two new bills introduced in Parliament aim to provide tax incentives to property owners who lease their units at affordable rates under the "renovate-rent" program.

Income tax exemptions for affordable rentals

The first bill proposes amendments to the "Income Tax Law," allowing landlords to fully exempt 100% of their rental income from taxation if they offer affordable rents under the initiative. The program is designed to encourage property owners, whether individuals or businesses, to support housing for citizens meeting specific income criteria.

Enhanced capital allowances for participating landlords

Landlords will also benefit from increased capital allowances: 5% for buildings (up from 3%) and 15% for machinery and equipment (up from 10%). These increased allowances will apply to eligible purchases made between 2024 and 2027.

The fiscal impact of these measures is estimated at €1.75 million per year for the duration of the program.

Defence contribution exemption for landlords

A second bill amends the "Extraordinary Defence Contribution for the Defence of the Republic" law, ensuring that landlords offering affordable rents will not be subject to this additional tax.

Supporting the government's housing policy

These measures form part of a broader housing policy framework approved by the Council of Ministers in October 2023 and October 2024. The framework includes initiatives to address inflation, support vulnerable groups, and promote eco-friendly housing, all aimed at increasing the availability of rental properties.

Definition of affordable rent and eligible beneficiaries

Affordable rent is defined as at least 30% lower than the current market rate. Beneficiaries fall into specific income categories:

• Single individuals earning up to €25,000 annually
• Couples or single-parent families with combined incomes up to €45,000
• Families of three with incomes up to €50,000
• Families of four with incomes up to €55,000
• Families of five or more with incomes up to €65,000

Application and approval process

Landlords and tenants interested in participating can apply online through platforms provided by the Ministry of Interior, the Council of Affordable Housing (COAG), or the "Affordable Housing" e-platform. Applications will be assessed by the Central Mortgage Organization Authority (CMOA). Approved participants will receive documentation to claim their tax benefits.

Compliance with state aid regulations

The initiative has been reviewed and approved by the State Aid Control Authority, ensuring it aligns with broader state aid regulations.

The government's dedication to increasing housing accessibility, assisting low-income populations, and growing the rental sector is demonstrated by these legislative initiatives.