Renting Out a Room in Your Home? What You Need to Know About Taxes
Do you have an extra room in your home and are thinking about renting it out? For many homeowners, the idea is simple: an unused room can become an additional source of income every month, while at the same time a student or young professional can find a more affordable place to live.
However, once you receive rent, that money becomes income that needs to be declared. The fact that you are renting out only one room while continuing to live in the same home does not mean that the income is exempt from taxation.
Here is what you need to know in practice for 2026, with specific examples.
If You Rent Out a Room Under a Standard Rental Agreement
If you own the property and rent out one room of your home to someone as their living space, the income is generally treated as income from real estate property.
This applies even when you are not renting out the entire apartment but only part of it.
For a standard long-term residential rental, you do not need to start a business simply because you are renting out one room. The income is declared as income from real estate, as long as it is a straightforward rental arrangement.
How Much Tax Do You Pay in 2026?
From the 2026 tax year, a new tax scale applies to income from real estate:
| Annual income from property | Tax rate |
|---|---|
| Up to €12,000 | 15% |
| €12,000.01 – €24,000 | 25% |
| €24,000.01 – €36,000 | 35% |
| Above €36,000 | 45% |
The rates are applied progressively. This means that if your income goes above €12,000, your entire income does not suddenly become subject to the 25% rate. The first portion remains taxed at 15%, while only the amount above €12,000 moves into the next tax bracket.
Example 1: Renting a Room for €500 per Month
Let’s say you rent out the room for €500 per month.
€500 × 12 = €6,000 annual gross rental income
A 5% deduction is recognized for expenses related to income from property, so for this simplified calculation:
€6,000 × 95% = €5,700 taxable income
The tax would be:
€5,700 × 15% = €855 per year
That is approximately €71.25 in tax per month, calculated on an annual basis.
Example 2: Renting a Room for €700 per Month
With monthly rent of €700:
€700 × 12 = €8,400 annual gross income
After the 5% deduction:
€8,400 × 95% = €7,980
Tax:
€7,980 × 15% = €1,197
So, on €8,400 of annual gross rental income, the income tax would be approximately €1,197.
Example 3: Renting a Room for €1,000 per Month
Annual gross income:
€1,000 × 12 = €12,000
After the 5% deduction:
€12,000 × 95% = €11,400
Because the taxable income remains below €12,000:
€11,400 × 15% = €1,710 tax
So, after this specific income tax, approximately €10,290 per year remains.
What If the Room Costs More Than €1,000?
This is where the new tax scale becomes more important.
Let’s assume that the room is rented for €1,500 per month.
Annual gross income:
€1,500 × 12 = €18,000
After the 5% deduction:
€18,000 × 95% = €17,100
The tax is calculated progressively:
€12,000 × 15% = €1,800
€5,100 × 25% = €1,275
Total tax: €3,075
This is a good example of why it is important to understand the tax brackets rather than simply looking at the highest applicable tax rate.
What If You Already Have Income From Another Property?
This is very important.
The tax scale applies to your total income from real estate, not separately to each room or each property.
For example, let’s say:
- You receive €900 per month from an apartment
- You receive €500 per month from a room in your own home
Your total annual gross rental income is:
€10,800 + €6,000 = €16,800
After the 5% deduction:
€16,800 × 95% = €15,960
The 2026 tax would be calculated as:
€12,000 × 15% = €1,800
€3,960 × 25% = €990
Total tax: €2,790
So, when deciding how much it makes sense to charge for a room, you should look at your total income from property, not just the rent from that particular room.
How Do You Declare the Rental?
The rental is declared electronically to the Greek tax authorities through the Declaration of Real Estate Lease Information.
The declaration must generally be submitted by the end of the following month after the rental begins or is amended.
The process includes information such as the landlord and tenant details, rental period, monthly rent and property information.
The rental income is then included in your annual tax return through the relevant E2 and E1 forms.
Do You Have to Charge VAT on the Rent?
In the case of a standard long-term residential rental, you are not operating as a service business simply because you rent out a room.
Short-term rentals are different.
Since 2024, when an individual offers up to two properties for short-term rental, the income may continue to be treated as income from real estate, provided the relevant conditions are met and no additional services beyond the provision of bed linen are offered.
When additional services are provided or when someone operates with a larger number of properties, different tax treatment may apply.
So there is an important difference between renting a room to a student for one year and systematically offering the room for short-term accommodation.
What About Utilities and Shared Expenses?
This is another area where it is worth being careful.
If you agree on a specific rent with your roommate and they separately pay their share of electricity, water, internet or other genuine shared household expenses, the tax treatment can depend on how the arrangement is structured and what exactly the landlord receives.
For this reason, it is better for the rental agreement to clearly state what is included in the rent and which expenses are paid by the tenant, rather than having a vague arrangement such as “€700 all-inclusive.”
In more complicated situations, especially when services or fixed charges are included together with the room, it is worth checking the arrangement with an accountant before signing the rental agreement.
What If You Are Not the Owner but Rent the Home Yourself?
This changes the situation considerably.
If you are renting the entire home yourself and want to rent one of its rooms to another person, this is considered subletting.
Subletting has different tax considerations and, more importantly, you should first check whether it is permitted under the rental agreement you signed with the property owner.
It is not a good idea to move a roommate in and collect rent without first checking the terms of your own lease and the applicable tax treatment.
What Should You Do Before Listing the Room on Flatshare.gr?
If you are a homeowner and want to rent out a room, the process becomes much easier when everything is organized from the beginning.
1. Clearly agree on the monthly rent and what it includes.
2. Agree on who pays electricity, water, internet and common building expenses.
3. Prepare a proper rental agreement.
4. Submit the rental declaration to the Greek tax authorities within the required deadline.
5. Declare the rental income in your annual tax return through the E2 and E1 forms.
6. Keep the relevant records and payment receipts.
And, of course, before deciding how much rent to charge, it is worth calculating not only how much you will receive but also how much you will actually keep after tax.
One Final Example
Let’s say you have a room that you can rent for €600 per month.
Over one year, you will receive:
€7,200
After the 5% deduction:
€7,200 × 95% = €6,840 taxable income
At a 15% tax rate:
€6,840 × 15% = €1,026 income tax
So, after this specific income tax, you are left with:
€6,174 per year or €514.50 per month.
This does not mean that the room generates €514.50 in net profit, because there may be additional costs such as increased electricity and water consumption, maintenance, repairs, wear and tear or other expenses.
It simply gives you a more realistic picture of what a €600 monthly rent means when you look at it on an annual basis.
A Room Can Become Extra Income — If Everything Is Organized Properly
Renting out a room can be a very practical way to make use of a space that would otherwise remain empty. But for the homeowner, the process does not end when you find a good roommate.
You need the right rental agreement, the correct tax declaration and a clear understanding of what each side is responsible for paying.
At Flatshare.gr, we want to make the process as simple as possible: helping you find people who are looking for a room, view their profiles and find a roommate who is genuinely compatible with your home.
Have a spare room? Find your next roommate on Flatshare.gr.
Note: This article covers the general tax treatment in Greece and information relating to the 2026 tax year. Actual tax obligations may vary depending on the individual situation, particularly in cases involving subletting, short-term rentals, co-ownership or the provision of additional services. For personal tax advice, consult an accountant.