The initiative is being driven by the Independent Authority for Public Revenue (AADE) through the activation of a new Property Ownership and Management Registry, mandatory bank-based rent payments, and an annual rent refund scheme designed to incentivize compliance.
At the core of the reform is the compulsory registration of every property in a centralized digital registry, alongside the elimination of cash payments for rents. Authorities believe these measures will significantly reduce the flow of undeclared money in the rental market and align income taxation with real economic activity. An additional incentive comes in the form of an annual refund equivalent to one month’s rent, paid each November, capped at €800 per month, with supplements for families with children.
Data held by the tax authority highlight the scale of the problem. While property prices and rents have risen steadily across the country, declared rental income corresponds to an average monthly rent of just €255 nationwide—an amount widely considered unrealistic. According to the government’s economic team, this discrepancy points to systematic tax evasion, either through undeclared leases or by declaring rent amounts significantly lower than those actually paid. In reality, average rents exceed €450 per month, and the majority of tenants report paying up to €600.
The government’s objective is twofold: to expand the tax base by recovering revenue lost to the informal economy, and to establish a culture of compliance through technology-driven oversight. With full interconnection between property records, tax declarations, and banking data, authorities will be able to identify inconsistencies almost in real time. The Prime Minister has indicated that greater transparency in rental income could also create fiscal space for future tax reductions on rental earnings.
The new Property Ownership and Management Registry is central to this effort. Every property must be electronically recorded and classified according to its use—whether as a primary residence, secondary home, long-term or short-term rental, commercial property, or vacant asset. This creates a single, comprehensive database linked to tax filings and other government platforms, sharply limiting opportunities for misreporting.
Rental properties will face the most scrutiny. The system will be able to determine whether a property is rented or vacant, cross-check declared rents against utility consumption and bank transactions, and automatically pre-fill rental income in tax returns. Tenants will also be required to log into the platform, allowing authorities to match tenant declarations with those of property owners. As a result, the scope for hiding rental income is expected to narrow dramatically.
From April 1, rent payments must be made exclusively through the banking system, effectively ending the use of cash. Each transaction will leave a digital trail, enabling tax authorities to compare declared rents with actual deposits. If a landlord reports receiving €300 per month but consistently records deposits of €550 or €600, the discrepancy will be flagged automatically. Newly developed algorithms will also look for indirect payment methods, such as transfers to third-party accounts, triggering alerts for potential tax evasion.
Alongside enforcement measures, the government is expanding a rent refund program aimed at tenants. In 2025, nearly one million beneficiaries received refunds totaling more than €210 million, with the average household receiving €225 based on declared rent amounts. Officials expect both the number of beneficiaries and the total payouts to increase in 2026 as more real rental income is brought into the system.
Eligibility for the refund is determined by income and property thresholds, which vary depending on whether the rental concerns a primary residence or student housing. For student accommodation, only income criteria apply, regardless of whether the residence is declared by parents or by the student.
