Why Greece’s Push for Bank-Only Rent Payments Won’t Fix Tax Evasion
Greece is once again floating the idea of requiring all rent payments to be made exclusively through bank transfers — a move the government claims could help tackle widespread tax evasion. But while the policy might sound promising in theory, in practice it is unlikely to deliver meaningful results. This proposal is not new; it has been under discussion since 2014 but has never been implemented in a comprehensive or effective way. Its central flaw is that it assumes compliance from landlords and tenants without addressing the entrenched informal practices that dominate the Greek rental market.
The core of the problem isn’t how rent is paid — by bank transfer or cash — but the significant discrepancy between actual rental prices and what is officially declared to the tax authorities. Even with a bank-based system, it remains easy for landlords and tenants to agree on a lower rent to declare on paper, while transferring the difference informally, off the books. Without a strong verification mechanism, simply routing payments through banks does little to ensure transparency. It may create a digital trail, but it doesn't necessarily reflect the full, true value of rental transactions.
Moreover, the fact that this discussion has been revived repeatedly over more than a decade — without concrete implementation or improvement of enforcement tools — signals a deeper failure within Greece’s tax administration. Despite having access to digital technologies and financial data, the authorities have made little progress in reducing tax evasion in the property sector. This suggests the issue is not just about technical capacity, but a broader systemic unwillingness or inability to confront informal practices embedded in the economy.
A more effective approach would involve comparing the rental values declared in official lease agreements with market averages in each area. This could be done using data from online rental platforms, real estate agencies, and other tax filings. By identifying glaring inconsistencies — for example, a property rented at a price far below typical local rates — tax authorities could focus inspections on high-risk cases and uncover under-the-table income that is currently escaping the system.
Ultimately, without such targeted cross-checking and meaningful enforcement at the source, mandating rent payments through banks amounts to little more than a bureaucratic fix. It may give the appearance of reform, but in reality, it risks simply digitizing the same old problem, while leaving the structural roots of tax evasion untouched.
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