Real Estate Taxation

Real estate property situated in Greece is subject to various 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.
Pursuant to the provisions of Law 3427/2005 effective since December 2005, from 1/1/2006 onwards, the transfer of real estate is subject to a new tax regime.

Real estate transfer tax (FMA) 

From 1/1/2006 onwards, the first transfer for consideration of real estate, which is not subject to VAT is subject to the 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. 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%.

Value added tax (VAT) 

From 1/1/2006 onwards, the supply before first occupation of real estate is subject to VAT at the standard rate of 19%. The taxable value is the price that the taxable person received or is deemed to receive or is anticipated to receive increased by any additional provision connected with the abovementioned transaction.
The above transaction is taxable only when the following conditions are fulfilled:

  • the person who transfers is a taxable person or anyone who carries out, on an occasional basis, the aforementioned transaction on condition that he opts
    for the standard VAT regime
  • the construction license is issued after 1/1/2006.

Real estate capital gain tax (FAY) 

Any further transfer for consideration of real estate after 1/1/2006 is subject to the real estate capital gain tax, in case where the seller has initially acquired through transfer, inheritance or donation the property after 1/1/2006.
The tax is imposed on the balance between the acquisition value and the value of the real estate at the time of its sale and burdens the salesman.

The rate is determined as follows:

  • 20% if the transfer takes place within 5 years from the real estate’s acquisition
  • 10% if the transfer takes place between 5 to/and 15 years from the real estate’s acquisition
  • 5% if the transfer takes place between 15 to/and 25 years from the real estate’s acquisition.
  • No capital gain tax is imposed on the transfers, which will take place after the elapsing of 25 years from the real estate’s acquisition.

The said Law provides for specific exemptions from the real estate capital gain tax mainly for public legal entities, for legal or natural persons who carry out a business of constructing and selling buildings whose profits are subject to income tax as well as for legal entities whose capital gain is subject to normal income tax.

Real estate transaction duty (TSA) 

Any further transfer for consideration of real estate after 1/1/2006, in case where the seller has initially acquired through transfer, inheritance or donation the property after 1/1/2006 is also subject to the real estate transaction duty.
The said duty is computed at 1% of the real estate’s value and it burdens the purchaser.

Real estate duty (ETAK) 

A new tax law, which was enacted on 22 January 2008, has abolished the annual real estate tax (FMAP) and replaced it by a duty at a rate ranging from 0,1% to 0,6% imposed on the objective value of the real estate property of the individual or the company owning assets in Greece as determined by 1st January each year.

For individuals, the tax rate is 0,1% on the objective value and there is a tax exempt threshold of 200 square metres or of 300.000 Euro.

For the legal entities, the general tax rate is 0,6% on the objective value, reduced to 0,3% for non – profit organisations. For self-used buildings the rate is reduced at the rate of 0,1% (to be noted that the land in this case, continues to be taxed at a rate of 0,6% or 0,3% respectively).

Municipal real estate duty (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.

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.

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 initially acquired no later than 31.3.2009, a duty of 0.15% is imposed on their transfer price. For listed shares initially acquired from 1.4.2009 onwards, a tax at a rate of 10% is imposed on the capital gains deriving from the sale. 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.

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 2008.

Stamp duty 

Rentals are subject to a 3.6% stamp duty. As of 2008, stamp duty on rental of residential properties is abolished.

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