Property taxation
Real estate property situated in Greece is subject
to several kinds of taxes. Key issue relevant to real estate
taxation in Greece is the concept of the 'objective value',
which is a deemed value determined according to a formula
prescribed by the tax authorities and regularly revised; such
value does not coincide with book or market value, and varies
between different areas. Individuals or companies (Greek and
non-Greek) acquiring real estate property in Greece or receiving
income from such property situated in Greece, need to obtain
a Greek tax registration number called AFM (ÁÖÌ)
and file a Greek income tax return. A reform of Greek taxation
on real estate in Greece found place in 2005. One of the key
issues of this reform is the introduction of VAT on the delivery
of buildings for which a building permit is issued after January
1, 2006.
AFM
The AFM is the Greek tax registration number
and required by the Greek Tax Authorities is necessary for
purchasing or renting a property, opening a bank account,
buying a car and in many other occasions. To apply for a the
AFM you need usually only a copy of your passport (in some
tax offices they may ask you for a copy of your birth certificate
as well) and go to the nearest tax office. This can be also
done by a person who has a simple power of attorney from you
e.g. relatives, lawyer, accountant.
Real estate transfer tax
The tax rate on transfer of real estate property
of up to 15.000 Euros is 7% and 9% for any amount beyond 15.000
Euros of the 'objective value'. These rates increase by 2%
when the property is situated in an area covered by a public
fire brigade.
The real estate transfer tax is reduced to ¼
in the following cases
Distribution of real estate property parts among co-owners
Dissolution of partnerships and limited liability companies
(Ltds)
The real estate transfer tax is reduced to ½ in the
following cases
Compulsory trade-off of neighbouring properties
Merger of Societe Anonymes (SAs) or take-over of one by the
other.
Take-over of real estate property by the state for public
use and for the public benefit
Trade-off of real estate of equal value
Tax free is the purchase of the first-ever principal residence
for Greeks or EU-citizens who maintain their usual residence
in Greece, and for Greeks living abroad, worked outside Greece
for the last 6 years and still remain registered with a Greek
Community Register.
Tax exemption for a non-married person - up to 75.000 Euros
for a house or flat and up ot 35.000 Euro for a plot of land
Tax exemption for married persons, divorced or widowed parents,
and non-married persons, to whom the parental care has been
entrusted - up to 115.000 Euros for a house or flat and 64.000
for a plot of land.
for the first 2 children - additional 23.000 Euros for each
- 10.000 Euros for each for a plot of land
every further child - additional 35.000 Euros for each - 12.000
Euros for each for a plot of land
On the real estate transfer tax calculated as
mentioned above, a municipality tax of 3% has to be paid.
Current legislation states that VAT will be
charged on the supply of buildings whose construction licence
is issued on or after 1st January 2006. This is a change from
the above mentioned taxation. VAT is imposed at the standard
rate of 19% for the transfer of new real estate properties,
together with the part of the plot corresponding to such property.
Annual real estate tax
An annual real estate tax is imposed on legal
entities and individuals owning Greek real estate property
and calculated on the 'objective value':
For legal entities
The first 243.600 Euros of the 'objective value' of the property
is not subject to tax.
Any value of the property beyond 243.600 Euros is subject
to 0,7% tax
For individuals
The first 243.600 Euros of the 'objective value' of the property
is not subject to tax.
Any value of the property beyond 243.600 Euros is subject
to tax according to a scale ranging from 0,3% to 0,8%.
Tax steps |
Tax factor |
Tax amount |
Total property value |
Totaly tax amount |
243.600
|
0% |
0 |
0 |
0 |
146.750 |
0.3% |
440.25 |
390.350 |
440.25 |
146.750
|
0.4% |
587 |
537.100 |
1.027 |
146.750
|
0.5% |
733,75 |
683.850 |
1.761 |
293.500
|
0.6% |
1.761 |
977.350 |
3.522 |
293.500
|
0.7% |
1.761 |
1.270.850 |
5.576,50 |
Exceeding
|
0.8% |
- |
- |
|
Legal entities: |
0.7% |
|
|
|
|
|
|
|
|
For couples double of the above mentioned ammount
is not subject to tax; 487.200 Euros.
And for the first 2 children another 61.650 Euros for each
are not suject to tax and for any further child 73.400 Euros
each.
Certain exemptions from real estate tax apply
in the cases of:
Forest areas, agricultural and mining areas, real estate property
used by industrial, trade or hotel and professional units
for satisfying their operational needs, hotel businesses for
50% of the value of the land which they own and which are
used for tourist purposes and on which they have constructed
buildings that satisfy their operational needs.
Municipal real estate duty - Telos Akinitis
Periousias (TAP)
Real estate ownership is also subject to a municipal
real estate duty, currently calculated at a range of 0.25‰
to 0.35‰ on the objective value of the real estate property;
which is incorporated in the electricity bill payable every
second month.
Exemptions are granted from municipal real estate
duty in the case of:
Buildings under construction, for a seven-year
period following the granting of the construction license,
or until they are rented or in any other way used prior to
the
lapse of such seven-year period.
The commonly used sections of residential buildings.
Buildings characterised as historical monuments.
Capital gains tax on the sale of property
For properties purchased, donated etc. at and
after the 1st January 2006 the new Capital gains tax will
effect a sale of this property in the future. This Capital
gains tax will have to be fully paid before the execution
of the transfer of the property, will be imposed on the difference
between the acquisition cost (purchase price) of the real
estate property to be transferred and its sales price. The
rates of Capital gains tax is inversely proportionate to the
time of ownership of the real estate to be transferred, charging
thus more short-term capital gains.
20% in case the property remained at the ownership of the
seller for less than five years
10% in case the property remained at the ownership of the
seller for more than five but less than 15 years
5% in case the property remained at the ownership of the seller
for more than 15 but less than twenty 25 years
0% in case the property remained at the ownership of the seller
for more than 25 years
Gains made by companies upon the sale of real
estate property are treated as part of the company's taxable
profits. However, in case of a transfer of shares of a company
holding real estate, the following tax implications will arise.Upon
the transfer of Greek SA shares non-listed on the Athens or
any other stock exchange, a 5% tax is imposed on the transfer
price of such shares. For listed shares the tax is 0,15%.
Further tax depends on theidentity and residence of the shareholder.
Upon the transfer of parts of an Eteria Periorismenis
Efthinis (EPE), or limited liability company, a capital gain
tax of 20% is imposed upon any resulting capital gain. Further
tax depends on the identity and residence of the shareholder.
Ad hoc 3% tax
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