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 '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 and file a Greek income tax return.
A major reform of Greek tax regime on real estate is expected to be enacted within 2005, which may significantly affect the information presented below. One of the key issues of such reform may be the introduction of VAT on the delivery of buildings for which a building permit is issued after January 1, 2006.
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. These rates are increased by 2% when the property is situated in an area covered by a public fire protection service (which is almost always the case).
On the real estate transfer tax calculated as mentioned above, a local authority surcharge (i.e. municipality tax) is imposed, equal to 3%.
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 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 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%.
Municipal real estate duty
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.
Capital gain on the sale of property
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 the identity 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
Any legal entity, which does not provide full disclosure for its shareholding structure, is subject to an annual 3% tax on the objective value of real estate property.
Revaluation of immovable property
Land and buildings must be revaluated for accounting and tax purposes every four years in accordance with the rates specified by the Ministry of Finance. Most recent revaluation year was 2004. Such provision does not apply to companies maintaining IFRS as their statutory reporting system.
Value added tax (VAT)
Greek VAT will probably apply to new constructions for which the building license will be issued from 1 January 2006 and onwards.
Today transfer and lease of real estate property is not subject to VAT in Greece.
Stamp duty
Rentals are subject to a 3.6% stamp duty.
Additional tax on income from real
estate property
Income from real estate property (e.g. rentals) is subject to an additional tax calculated on gross income, which may not exceed the annual income tax liability for the same period. Such tax is calculated at the following rates:
- 3% for legal entities
- 1.5% for individuals, increased to 3% for residences exceeding 300 square meters
