Taxation of Rental Income in Greece for an Israeli Investor: Greek Brackets, the Israel-Greece Tax Treaty and Reporting in Israel

1Who taxes the rent: Greece, Israel or both?

Greece always taxes the income, because the property is located there. The interesting question is what happens in Israel, and the answer runs through the tax treaty between the two countries, which was signed in Jerusalem on 24 October 1995 and ratified in Greece by Law 2572/1998.

Article 6(1) of the treaty, in the English text, provides that income derived by a resident of one State from immovable property situated in the other State “shall be taxable only in that other State”, that is, it is taxed only in the State where the property is located. Article 6(3) clarifies that the rule also applies to income from letting. Most treaties Israel has signed provide only that the State where the property is located “may” tax, leaving Israel a residual right to tax with a credit. This wording is broader.

Two points call for caution. First, according to an analysis published by an Israeli law firm, the Hebrew text of Article 6 gives Greece only a primary right to tax, not an exclusive one. The treaty itself provides that the Greek, Hebrew and English texts are all authentic, and that in case of conflict of interpretation the English text prevails. Second, we have not found any ruling or public position of the Israel Tax Authority confirming this interpretation with respect to rental income from Greece. This means that the position is well founded, but it is not immune to dispute.

2How much tax is paid in Greece on rental income?

In Greece, rental income is taxed on a scale separate from other sources of income. From tax year 2026 the scale includes an intermediate 25% bracket, which softens the jump that previously went straight from 15% to 35%.

Source: PwC Worldwide Tax Summaries, as of September 2026. Suppose your taxable rental income is EUR 20,000 a year. The tax will be EUR 1,800 on the first EUR 12,000, plus EUR 2,000 (25% of 8,000) on the balance: a total of EUR 3,800, an effective rate of 19%.

• Gross income versus taxable income: In Greece, the expenses that an individual may deduct from rental income are limited. As a rule, a fixed and limited deduction is allowed for repairs and maintenance. As a result, taxable income is very close to gross income, which is the main difference from the Israeli method.
• No personal reliefs for an Israeli resident: According to PwC, a non-resident is entitled to the reliefs of a Greek resident only if he or she lives in the European Union or the EEA and meets additional conditions. An Israeli does not fall into that category.
• The scale applies per taxpayer: Where spouses hold a property in equal shares, each reports his or her share according to the ownership percentage, and each has his or her own 15% bracket. This is a planning consideration that should be examined before registration, together with other implications of joint ownership.

3How do you report and pay in Greece?

An Israeli resident with rental income in Greece files an annual tax return in Greece. According to PwC, returns are filed online between 15 March and 15 July each year, and a non-resident files with the tax office for non-residents. One point surprises many people: on income from which no tax was withheld at source, and rent is a clear example, an advance payment of 55% of the year's tax, on account of the following year, is collected together with the assessment, and 50% in the first reporting year. In the first year, therefore, you will actually pay almost one and a half times the annual tax.

1. Registering the lease agreement: A long-term lease is reported on the Greek tax authority's platform, and the tenant confirms it. This report is the basis for the authority's cross-checks.
2. Receiving payment: According to the tax guide we published, from 2026 rent payments in Greece must be made by bank transfer and not in cash. Even apart from the obligation, a dedicated Greek account for the property simplifies reporting.
3. Short-term rental: Anyone who rents through Airbnb or similar platforms is also subject to registration and reporting in the short-term rental registry. In this registry the income is divided among the owners according to actual ownership percentages. We detail the special rules for this area in a separate article on short-term rental in Greece.
4. Filing the annual return: With a Greek accountant or your tax representative, within the filing window.
5. Paying the tax and the advance payment: According to the payment schedule set in the assessment.

4What happens in Israel: a treaty exemption or taxation with a credit?

An Israeli resident is generally taxed on worldwide income, so the question is whether the treaty removes the Greek rent from the Israeli tax base. There are two practical approaches, and we recommend making the choice between them together with your Israeli tax adviser, before the first return.

Approach A - exemption under Article 6 of the treaty. Based on the English text, the income is taxed in Greece only, and no tax is paid on it in Israel. Even under this approach, the income is not concealed. A person required to file an annual return in Israel reports it and states that it is exempt under the treaty. It is worth checking with the adviser whether the position requires special disclosure in the return.

Approach B - taxation in Israel under domestic law. If the Israel Tax Authority does not accept the exemption, or if the taxpayer prefers not to take a position, Israeli law offers two tracks for rental income from abroad:

In the 15% track you do not receive a credit for the Greek tax, which in practice results in double taxation. Therefore, when the Greek tax starts at 15% and rises, the regular track with a credit for the foreign tax is usually the more reasonable outcome. The track that suits you depends on the amount of income, the expenses and your marginal tax rate, so it is worth calculating both alternatives before deciding. According to professional sources in Israel, rental income from abroad taxed under the 15% track, which does not amount to a business, is also exempt from National Insurance contributions.

5What changes if you rent through a company?

A Greek company that leases out a property pays corporate tax in Greece, and according to professional sources the rate is 22%. There is then an additional layer of tax when profits are distributed to shareholders in Israel. Such a structure also requires checking that the company will not be treated as an Israeli resident, where its control and management are exercised from here, and that Israeli anti-deferral rules will not apply to it. In most cases of one or two apartments, personal ownership is simpler and cheaper. A company becomes relevant mainly in projects, large property portfolios or rental on a business scale.

6Which mistakes do we see again and again?

• Assuming that if “the treaty exempts”, nothing needs to be reported in Israel.
• Automatically choosing the 15% track in Israel without noticing that it rules out a credit for the Greek tax.
• Forgetting the Greek advance payment in the first year, followed by a cash-flow surprise.
• Collecting rent in cash or into a relative's account.
• Registering the property in the name of one spouse only without first examining the implications.
• Failing to report the lease on the Greek platform, which leads to gaps against the authority's cross-checks.

7What to do before signing, and how we accompany this

Rental taxation is planned before the purchase. In whose name the property will be registered, whether joint ownership makes sense, whether to rent long term or short term, and what the reporting in Israel will look like are decisions that are easy to make at the outset and hard to change afterwards. We coordinate between the accountant in Greece and the tax adviser in Israel, build a reasoned position on Article 6 of the treaty, and make sure the documentation is in order from the first lease.

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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.