Tax Declarations 2025: Pre-filled Rental Income & New Tax Exemptions

New Tax Relief for Property Owners

Property owners who convert short-term leases into long-term leases or rent out closed residential properties will be eligible for significant tax exemptions.

According to recent data, in 2024 over 1.7 million property owners reported rental incomes exceeding €8 billion. The new tax regime introduces a special code on the E2 form for those who, from September 8, 2024, onward, choose either to convert their short-term lease into a long-term one or to rent out a closed residence (up to 120 m²) for at least three years. By entering this special code, these property owners will secure an exemption from income tax on the rental income received, until the end of December of that year.

At the same time, rental income data from both short-term and long-term leases will be automatically populated in the E2 form—with the option for editing—based on information collected by the Independent Authority for Public Revenue (AADE) from digital platforms such as Airbnb and Booking.com. Naturally, property owners and managers have the opportunity to modify the reported amounts provided they submit the necessary supporting documentation. Similarly, taxpayers with income from long-term leases can verify the duration of the contracts and, if needed, terminate the lease.

The Key Change

The major change concerns property owners who, from September 8, 2024, onward, either rent out a closed residence (up to 120 m²) for at least three years or convert their short-term lease into a long-term lease. These property owners must indicate this choice by entering a special code on the E2 form, thereby ensuring exemption from income tax on the rental income received from that date until the end of December.

For the tax year 2024, rental income from properties is taxed at the following rates:

• 15% on the first €12,000 of net income,
• 35% on the portion between €12,001 and €35,000, and
• 45% on any amount above €35,000.

Instructions for Completing the E2 Form

The AADE has published a guide with questions and answers for the correct completion of the E2 form:

• Filing the E2 Form for a Spouse in Cohabiting Cases: In cases of cohabiting partners, if the spouse has income solely from property she owns, she is required to file the E2 form—either using her personal access codes or through the obligated spouse—selecting the “E2 for Spouse” option.
• Joint Ownership of Properties: When properties are owned by both spouses, each must file a separate E2 form for the properties they own, even if there is joint ownership of some or all properties.
• Completing the “Type of Property Lease” Column: Column 17 must be completed by selecting the type of lease and the category of property use (for example, office lease, free housing allocation, vacancy, short-term lease, lease of a property that is subleased, etc.).
• Reporting Income from Short-Term Leases: For the tax year 2024, property data and the total rental income from short-term leases are pre-filled based on data obtained via digital platforms. After reviewing the information, if you disagree with any of the data, you have the option to modify it.
• Handling Notifications for Discrepancies: If a notification appears during submission regarding rental amounts with which you disagree, these amounts are drawn from the electronic platform for reporting property lease data and cover all active leases for the tax year. You can check the duration of the leases and terminate any lease where necessary.
• Reporting a Property with a Minor Dependent: The property must be registered on the E2 form of the parent who exercises parental authority. This is done in the first table and in Table I (Rented Properties, etc.) of the supplementary data by selecting the property in the first column and providing the full name and tax identification number (AFM) of the child in the corresponding columns.
• Mandatory Completion of the Rent Column: For the tax year 2024, the entry of the actual or estimated monthly rent in column 11 is mandatory.
• Declaration Number for Reported Property Lease Data: This number must be completed for the leases that have been submitted to the relevant electronic application. The registration number previously issued by the competent authority should not be included.
• Entering the Provision Number for Auxiliary Spaces: For spaces such as storage rooms or parking spaces connected to the shared electricity meter, the nine-digit number 999999999 must be entered in the designated field.