Real Estate Taxation in Greece: Regulations and everything you need to know.

GR Version

The taxation of real estate in Greece is regulated by a specific legislative framework which, in order to determine any tax liability, takes into account important factors of both the ownership status and the cost of real estate.

In this article, we will briefly address the key issues in order to provide fundamental knowledge to all those who are interested in making a similar real estate purchase investment.

In general, property taxation could be divided into three sections:

1.The taxation of the acquisition of real estate by inducement (e.g. sale, exchange).

2.The taxation of the acquisition of real estate by gift (e.g. inheritance, donation, gift, parental provision).

3.The taxation of the maintenance of real estate.

If you are a property owner or if you intend to become one immediately, it is advisable to know the tax regime currently in force. In this article we will present key points in property taxation, and what you should look out for.

In particular, the taxes associated with a purchase and sale of a property are as follows:

1. value added tax (VAT), which is charged to the buyer;*

2. transfer tax (VAT), which is charged to the buyer;

3. capital gains tax on immovable property, payable by the seller;

4. the single property tax (ENFIA), paid by the owner of the property every year, and in any case it must be paid before the signing of the purchase contract;

5. the real estate tax (TAP), paid by the property owner every year through the electricity bills.

*Value added tax

According to the current Greek legislation, the purchase of real estate charges the buyer with 24% VAT on the sale price, for the purchase of a secondary, holiday home, office or shop with a building permit issued after 1 January 2006. However, it should be noted that according to the latest legislative changes, VAT on the purchase of new properties has been suspended until 31 December 2024. Buyers acquiring their first home are exempt from paying VAT and are subject to the tax-free property transfer tax.

Real estate transfer tax

Every purchaser who proceeds to purchase a property must pay transfer tax. Payment of the tax must be made before signing the purchase contract. Nowadays, the transfer tax is also paid electronically. The buyer makes an application to the relevant DIO, then the DIO issues the relevant payment ID for the payment of the tax. As for the payment amount, the transfer tax amounts to 3% of the property's objective value. Municipal taxes, which amount to 3% of the property transfer tax, are also applied to it.

Photo Credits: unknwon

The purchaser is exempt from the obligation to pay tax if the purchase of a first home with an objective value of up to:

- EUR 200,000, when the buyer is unmarried,

- EUR 250 000, where the purchaser is married or in a civil partnership without children,

- if there are up to two children in the family, then the buyer is exempted by an additional EUR 25 000 for each child. From three children and above, for each additional child the limits are increased by EUR 30,000.

Real estate capital gains tax

The legislation (Act 4172/2013) provides for the imposition of a 15% tax on the positive difference (capital gains) resulting from the sale of a property at a price higher than the price at which it was acquired. If three or more sales of real estate have taken place within a period of two years, then the capital gains tax will have a higher rate, because the seller is now considered by the tax authorities as a businessman and the capital gains from the sale of the real estate will be classified as profit from business activity. Therefore, it is taxed according to the income tax scale for freelancers at 9% - 44%, (Article 29 of the Income Tax Code). However, the application of the law has been suspended initially until 31 December 2022 and subsequently until 12 December 2024, in order to support the real estate market.

Single Real Estate Ownership Tax (ENFIA)

The Single Real Estate Ownership Tax (ENFIA) is paid by the property owner every year. ENFIA is calculated as the sum of the main tax and the additional tax.

The main ENFIA is calculated on the basis of a scale of zoning values and determination coefficients, which vary according to specific characteristics of the building, such as, but not limited to: age, floor, surface area, use. ENFIA generally ranges from 0,001 to 13 EUR/m2.

The new ENFIA statement is different from previous years. In particular, due to the new property values, the new tax statement shows:

- The new total value of the real estate, which has arisen after the revaluation of the objective values,

- The main tax,

- the deduction or increase of the main tax in relation to the total value of the immovable property,

- the deduction (e.g. for low-income property owners),

- supplementary tax (if you have real estate with a total value of more than EUR 200,000, then the additional amount is taxed additionally at a rate of 0.1% to 1.15%),

- the total amount of ENFIA.

Real estate tax (TAP)

In addition to the ENFIA, a property is also subject to municipal taxes and the Real Estate Tax (TAP). The TAP depends on the surface area, age and zoning value of the property and is calculated at rates ranging from 0.025% to 0.035% of the property's objective value. Certain buildings are exempted from the payment of TAP; in particular: the common parts of apartment buildings, buildings designated as "historical monuments", and those under construction for 7 years after the granting of a building permit or until they are rented or otherwise used before the 7 years have elapsed.

In fact, for a transfer of a property to be complete, the TAP must have been paid for the last 5 years.

Use of property

If you are an owner - an individual - of a property and you rent it out, you will be taxed on the income from the rental:

- At a rate of 15%, for an amount up to 12,000 euros,

- at a rate of 35% for an amount from 12,001 to 35,000 euros, and

- at a rate of 45% for a higher amount.

After the enactment of the Act 4646/2019, the landlord, must cover 30% of his annual real income from the rent received with expenses for the purchase of goods and services paid electronically.

For legal entities, i.e. companies that have properties for rent, the net income from the rental of the property is added to the profits from business activity and taxed at a rate of 29%. If the tenant is a business, then the rents are subject to a 3.6% paper tax and depending on the personal agreement will be borne by the landlord or the tenant.

The above applies at this time and is subject to change.

STAMOS & ASSOCIATES Law Firm, in cooperation with experienced and qualified Tax Consultants, Financial Consultants, Engineers, Surveyors, Notaries and Real Estate Agents, provides sound legal advice on the tax status of real estate.

As a specialized lawyer in Real Estate Law, Ms. Anna Ignatenko and members of our legal team, undertake entirely all the necessary actions for the transfer and management of real estate.