The Ministry of Finance is exploring options to reduce taxes on long-term rental income, an idea that was previously discussed with European Commission officials but did not move forward, due to concerns about potential revenue losses.

Recent developments in real estate, including the rise of Airbnb and efforts to increase long-term rentals through renovation subsidies and temporary tax incentives, have prompted officials to consider tax reductions for long-term landlords, as a way to ensure fair treatment compared to short-term rental hosts.

However, implementing such changes depends on fiscal and political factors. One official suggested it might be possible towards the end of the current government term in 2027, provided fiscal balances are maintained. The issue may be revisited once new EU fiscal rules are clear and budget performance is assessed.

The government is particularly concerned about high tax rates on rental incomes exceeding €12,000 annually and is looking for ways to reduce these rates in the future.

The ministry is reconsidering rental income taxation partly because long-term landlords face high tax rates, which discourage them from keeping properties on the market. This contrasts with a new policy allowing owners of previously vacant or short-term rental properties to pay no tax for three years if they switch to long-term rentals.

This tax exemption applies to properties up to 120 sq.m., converted between September 2024 and December 2025, and is expected to cost the government €3 million in 2025 and €13 million annually from 2026-2028.