The solution that the government chooses to give this time is much more favorable for everyone, compared to the previous months. From now on, in January and February, the landlords who undergo the 80% “haircut” will find that not only do they not have such big losses, but they also have “hidden” profits from the rent reduction they make to their tenants.
In addition to the reduction in ENFIA or the abolition of the Special Solidarity Levy that they have already won for 2020 and 2021, commercial property landlords who will suffer the reduction in January and February they will see that their income is protected multiple times, as follows:
- The public will pay them directly the75% of the damage they suffer. That is, for a rent of e.g. 1,000 euros, the state covers the 600 of the 800 euros that the tenant does not pay.
2. Despite the crisis, the owners will thus collect “in their time” 80% of the rent, i.e. 20% from the tenant and 60% from the State.
3. Theoretically the owner loses the rest 20%. This is how it seems at first, because for a rent of one thousand euros (or 500+500 for January and February) 200 euros is given by the tenant and 600 by the State. The lessor thus has a loss of 200 euros.
4. However, the 60% compensation from the State – i.e. the 600 euros in the example of one thousand euros – are irremovable for the lessor. That is, they are not taken away from him if he is in debt, which would not be the case if the tenant paid normally on time.
5. But mainly, the compensation is given and remainstax free. That is, the owner saves at least 15% (or 35% and 45% more) of taxes that he would pay in 2022, if 60% of the monthly rent was normally paid by the tenant.
Practically, the state covers the 92% of the rent and more, even going so far as to… subsidize the landlord to reduce the rent!
See table with the amount of the reduction and the amount that the owner “gets back” HERE
Here’s how:
1. For every thousand euros of rent , the lessor pays the tax office 150 or 350 or 450 euros in rent tax, depending on the total rents he collects.
2. For the same rent, the lessor collects the 80% or 800 euros, but “loses” 20% or 200 euros (uncollectible part of rent)
3. If you normally collected all 1,000 euros of rent, you would pay income tax from rents of at least 150 euros (15% on 1000€) and he would ultimately have 850 euros left net.
But for the 600 euros that the State now gives him, the owner automatically saves 90 euros from taxes (15% of 600). And so the State covers 690 euros or 69% and not 60% of the rent of 1000 euros.
But automatically and without inconvenience and expenses, it saves another 30 euros from taxes, for an uncollected rent of 200 euros (tax 15% for 20% on 1,000 euros) because it will not be collected either from the lessee or from the state.
Consequently the state covers 600 + 90 + 30 = 720 euros or 72% of the rent of 1,000 euros.
The tenant will also pay 20% of the rent or 200 euros to the landlord. Only for this 200 euros, the owner will normally pay a tax of 15%, i.e. 30 euros.
Therefore, 170 euros remain “clean in the pocket” of the owner from the payment of his tenant (200-30=170€ ) and the 600 euros tax-free from the State, i.e. a total of 770 euros.
In the end, instead of earning 850 euros from the 1,000 euros rent, the owner is left with 770 euros (-80 euros).
So, in the 1000 euro example, the actual loss is 80 euro in the worst case (or 8% rather than 20% of the 1000 euro rent).
4.
strong> For the same 600 euros, if the owner collects total rents of more than 12,000 euros per year, he would pay a tax of 210 euros to the tax office (35%). However, he avoids it and thus ultimately saves 810 euros in total.
In fact, if the tenant normally paid 1,000 euros, the lessor would keep 650 and pay 350 euros in tax.
But now he will get 600 euros from the state directly and another 280 euros indirectly (210 euros tax on the tax-free 600 + 35% tax or 70 euros for the 200 he never collected).
From that is, the state “subsidizes” with 880 euros (€ 600 direct allowance + 210 + 70 from taxes). And together with the 130 euros “net” that remain to him from the 200 he will receive from his employer (35% tax on 200 euros = 70 euros), he will finally earn 880 + 130 = 1,010 euros net, an amount that exceeds the entire the rent of 1,000 euros!
Although an oxymoron, instead of 650 euros “net” that would be left over from the 1,000, the owner gets an additional 360 euros, which he earns from the 35% taxes that he would pay in State for all the other rents that he had collected normally (from residential or commercial rents that were not “cut” etc!
That is, the state subsidizes the owner by 360 euros because it will reduce the rent to the tenant by 80% .
5. Income earners and landlords who collect multiple rents from multiple tenants, to reduce rents to more people, benefit even more!
With tax 45 %, the normal rental collection of one thousand euros means 550 in the pocket and 450 in the State, as long as the rental income exceeds 35,000 per year.
But if 600 of the 1,000 is given by the State and another 200 by the tenant , the thing changes: then the owner saves 270 euros (45% of the tax-free 600 euros) + 90 euros or 45% for the 200 euros of uncollected rent, i.e. a total of 960 euros!
To these is added and what remains after taxes 45% of the 200 euros that the tenant will pay him (200 -45% = 200 – 90 = 110 euros).
In the end instead of just 450 euros , “in the pocket” the owner puts a compensation of €600 + €360 from taxes + €110 from his tenant, i.e. a total of €1,070 “net” for a rent of €1,000 which he “cut” by 80%.
This does not mean, however, that the owner should not check his tenant if he was really forced to suspend operations due to KAD, as well as if he took the necessary actions to be able to finally compensate the lessor, so that he does not have the fate of the approximately 80,000 March-August compensation beneficiaries who have not yet received it.
Source: Protothema
https://www.protothema.gr/economy/article/1075774/meiosi-enoikion-krufa-ofeli-stous-idioktites/
