AI data privacy risks in real estate and tax sectors

Real estate and tax professionals face significant legal risks when using artificial intelligence to process sensitive personal data. Under the General Data Protection Regulation (GDPR), information such as property addresses, purchase prices, rental income, and tenant names are considered personal data that require strict protection.

Key compliance challenges include the physical location of servers and the legal basis for data transfer. While US-based providers like ChatGPT or Gemini often process data outside the EU, EU-based providers like Mistral AI offer higher levels of direct GDPR compliance. Furthermore, the EU AI Act introduces stricter oversight for AI systems used in credit scoring or financing decisions, classifying them as high-risk.

In the rental sector, both legal frameworks and provider policies prohibit fully automated decision-making. GDPR Article 22 restricts decisions that significantly affect individuals—such as housing access—from being made solely by machines. Similarly, OpenAI’s terms of service prohibit using its tools to automate sensitive decisions in housing without human verification. Professionals are advised to ensure they have formal Data Processing Agreements (DPA) in place before inputting client or tenant information into AI models.