Rent: The end of cash payments is near

Starting in 2026, all rent payments must be made through a bank, according to a proposal from the Ministry of Finance aimed at reducing tax evasion.

Cash payments “under the table” will not be recognized for tax purposes and, as currently being considered, will result in penalties for both landlords and tenants.

The regulation has not yet been finalized, but it is a key measure proposed by the Ministry of National Economy to address tax evasion in rental income.

The measure is based on data from the Independent Authority for Public Revenue (AADE), which reveals a significant gap between reported and actual rental amounts. The average declared rent for 2023 was €255, while the actual rent was around €800.

Bank payments have been required since 2020 for commercial leases, as they are the only form recognized as an “expense.”

Cross-checks are already being conducted for cases where landlords report clearly underpriced leases, while the new framework aims to establish a fully controlled and digital system for the housing market.

However, the implementation of the measure is not straightforward, according to Proto Thema, as fake leases remain a possibility, with tenants and landlords agreeing on a lower “official” amount and continuing cash payments as they do now.

Additionally, elderly people and vulnerable social groups are not familiar with electronic transactions, and small property owners may face new costs, burdens, and procedural challenges.