It is also different for individual and corporate owners. For businesses, the tax rate is set at 24%, while all property maintenance expenses are deducted from gross income. Greece has a very fair approach to capital gains tax for owners. Individuals are generally temporarily exempt until the end of 2022, but on two conditions: However, the Greek property tax system is extremely complex. The tax consists of two levels: a main tax and an additional tax. The main tax on buildings and land is determined by multiplying the square meters by the main tax and certain coefficients that affect the value of the property. The information about the changes will be useful for Greek tax residents and those considering buying a property in the country. In Greece, you are subject to property tax when you buy and rent it. In addition, you also pay taxes on the acquisition and pay a property tax every year. Capital gains from the sale of real estate are taxed at a flat rate of 15% on real estate that you have owned for less than 5 years. For properties held for more than 5 years, profits are not taxed. Taxable capital gains are the selling price less acquisition costs and related expenses. Once the property tax is calculated, an age and base coefficient is applied to determine the final amount of tax.
There are also coefficients that can reduce the tax rate, for example for additional use spaces. Depending on the legal framework of taxation, the size of the taxable property may be reduced if it is a special purpose building. Greek property taxes are calculated individually based on property qualities such as height and age. Municipalities levy another tax of 0.025 to 0.035% and include it in electricity bills. Local property tax is due to the municipal administration. The interest rate varies between 0.025% and 0.035% of the appraised value of the property. To transfer their tax residence to Greece, foreigners must make a minimum investment of €500,000. To attract wealthy individuals, Greek policymakers are considering reducing the unified property tax (ENFIA) by raising the threshold from €250,000 to €300,000, or €350,000.
Q. I read that property taxes in Greece are higher than in many other European countries. What for? After the 2008 crisis, the Greek real estate market had been in deep recession for many years. It only started to recover in 2016, and we saw a rapid increase in prices in 2018. Nevertheless, real estate in Greece is almost the cheapest of all EU countries. If we compare the prices of a hypothetical apartment of 120 m² in the Central Metropolitan Area, we see that real estate is only cheaper in Cyprus. But even then, we must bear in mind that Cyprus is not part of the Schengen area. Greece is therefore winning in this hypothetical race with its competitors in the Golden Visa program. When a business sells a property, the profits from the sale are considered part of the corporation`s taxable profit.
They are therefore taxed at the standard rate of income tax. However, a stock trade is the most common exit structure. The transfer of unlisted shares to Greek companies by Greek companies is subject to an income tax rate of 29%. There are two groups that are not subject to capital gains tax if they sell shares in a Greek or foreign company that owns real estate in Greece. These are: The property tax or ENFIA is calculated in the same way as the tax for individuals. However, companies are subject to an additional tax of 0.55% of their property rights. If the property is used for the production or exercise of a commercial activity, the additional tax rate is 0.1%. Golden visas are issued to applicants who have invested at least €250,000 in the Greek economy. The minimum amount applies to real estate options: purchase of property or land, 10-year rent or timeshare.
When applicants buy securities or open a securities deposit, they must invest at least €400,000. Residence permits are valid for five years. Its amount is 24%, but if an investor pays it only in certain cases, if the object of the purchase was built or inhabited after January 1, 2006. In addition, Greece has temporarily abolished VAT on the purchase of new real estate for two years (from 2020). Greece is one of the European countries that relies heavily on property taxes. In 2018, all property taxes (including property taxes and other property taxes) accounted for 7.9% of total Greek tax revenue. In European OECD countries, the share of property tax revenues was only 4.6%. Property taxes. When you buy a property in Greece, you pay real estate transfer tax or FMA in the amount of 3.09% of the value of the property. Then you pay annually a flat property tax or ENFIA and a housing tax or TAP.
If the individual property has more than one storey (i.e. a two-storey apartment), the relative coefficient is calculated on the basis of the top floor. For single-family homes, the floor coefficient is 1.02 and for ancillary rooms 0.1. The flat property tax consists of the principal tax and the additional tax. The main tax applies to buildings, land, fields, etc. The main tax is calculated based on the location of the property, size, use, age of the property, the floor where the property is located, and the number of open sides of the property. The additional tax (called the marsh tax) is levied on the property whose estimated value exceeds € 30,000 for an owner and € 600,000 for common property. The tax rate is between 0.1 and 1% of the estimated value. In addition, as an additional tax base, ENFIA calculated the objective value of the property on 1 January, as estimated by the tax authority. Real estate held by individuals is taxed progressively (see table below).
We have dedicated our material to the costs (taxes and payments) incurred by the owner of a property in Greece at all stages: from purchase to sale. As you can see, Greek laws in this area are very complex and confusing – moreover, they change often. In order to obtain legally correct information, we recommend that you contact specialists in real estate purchase and taxes. When you buy a property in Greece, you pay a real estate transfer tax, which is FMA. The tax rate is 3.09% of the assessed value of the property. There is a system of “objective value”. It calculates the value of a property based on its size, location and technical specifications. In cases where the objective value is higher than the purchase price, you pay taxes on that value instead of the price. Alternatively, for large investment properties, transfers can be made through a share transaction. It is not subject to real estate transfer tax. In December 2021, the Greek Ministry of Finance set new “objective values” for prices per square meter in 13,808 real estate areas in the country. These values are used in the calculation of an amount of transfer tax paid by a buyer of Greek real estate.
Do you want to buy a property in Greece and get a residence permit? In Greece, taxes are paid by individuals and companies. Taxes are levied on income, movable and immovable property, capital gains, value added, gifts and inheritances, dividends, interest, royalties, etc. The high burden, the complexity, the fact that property tax is levied not only on the value of the land itself, but also on the buildings erected on it and that it is a non-deductible tax, puts Greece at a disadvantage compared to other OECD countries. Greece ranks 33rd out of 36 countries in terms of property taxes in our 2019 International Tax Competitiveness Index. All this shows that property taxes in Greece should be a target for reform even before considering the impact on foreigners, especially given Greece`s position compared to other European OECD countries. The payment of the real estate transfer tax is mandatory when buying the property in Greece, the property is taxed in two ways: State property tax is levied annually on natural and legal persons who own Greek property.