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%.

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