Taxes for property owners in Greece
Taxes for property owners in Greece
If you're buying a property in Greece, you will end up paying Greek tax. No two ways about it.
You'll pay a tax on the acquisition. You'll pay a property tax each year. And if you rent it out, you'll be taxed on the rental income.
Some of these taxes are a bit on the high side for the EU. However, it's not all bad news - property taxes are lower than in the US. And the tax system is easy to get into - in fact, you'll get your tax number as soon as you buy a property - and managed over the internet.
Greece property buying guide
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When you buy a Greek property, you'll pay a transfer tax (FMA). It's assessed at 3.09% of the taxable property value. (It actually consists of a 3% transfer tax, plus a 3% municipal tax on the transfer tax. Confusing - so it's easier to think of it as 3.09% in total.)
There's a little complexity as to what the value is. The Greek tax authorities are well aware that they had the wool pulled over their eyes for years by people who said their million-dollar villas were only worth a handful of drachmas. There's therefore a system of 'Objective Value' which calculates what a property should be worth, according to its size, location and specification. If the Objective Value is higher than the purchase price (which isn't often the case, though because of the fall in property prices it does sometimes happen) you'll pay tax on that instead of the price.
Normally, new properties (watch out! that includes all properties whose planning permission is dated after January 2006) attracted 24% Value Added Tax. However, the Mitsotakis government decided to give an exemption from VAT to new properties for three years from 2019 in order to kickstart the property market.
Annual property taxes
The main property tax is the ENFIA. It's charged per square metre of Objective Value but with a hideously complicated set of calculations and range of tax rates, so it's best to check what the property tax is currently. If you're buying resale that shouldn't be a problem; if you're buying new, you'll need to check comparable properties in the area. For properties worth more than €250,000, there's a supplementary tax. Scale rates start at 0.1% of value, but rise to 1.15% for properties over EUR 1m.
ENFIA gets Greeks really riled up. There have been seven separate increases since the financial crisis - it's a much easier tax to collect than income tax, for instance. However, the most recent move has been downwards, with cuts expected to amount to about 30% by 2021.
Still, ENFIA is not a huge amount. A €400,000 property might pay €600. You could pay, for instance, €300 a year on a small villa in Halkidiki or a flat in a suburb of Athens, or €600 a year for a larger property on Crete. It's only in central Athens where ENFIA could really give you a headache.
Oddly, you can either pay your ENFIA as a lump sum, or pay in five monthly instalments from September to January. Twelve equal instalments would be just too easy!
There's also a municipal tax called TAP which is charged at 0.025 to 0.035% of property value, and is usually charged through your electricity bills. Municipalities also have powers to levy other taxes - so again, make sure you find out the relevant details.
If you rent out a property that you own in Greece, you'll be liable to pay tax on that income. The rates are • up to €12,000 rent - 15% • between €12,000 and €35,000 rent - 35% • above that, 45%.
Depending on your total income that needs to be declared in Greece, there may be a 'solidarity contribution' (social charges) of up to 10%.
Don't try to get away with renting and not declaring the income. The Greek tax authorities have shown themselves quite motivated to find and penalise landlords who don't declare their rental income - and they have deals with major booking sites to make sure they can find out who's letting out their property.
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Capital gains tax
If you sell a property that you've held for less than five years, then you're liable for 15% of any profit that you make. Gains on properties held for more than five years are exempt. That's actually one of the lowest tax regimes in Europe.
However, remember that if you're resident in another country you may be liable to pay a higher rate of capital gains tax there.
Like many other countries, Greece is cracking down on complex corporate structures used to shelter real estate holdings from tax. So, there's an extra annual charge for properties held in a company, and it's a swingeing big hike - 15% of value every year.
There's an exception for companies that are resident in the EU, and where all the shareholders have a Greek tax number - that is, companies that are totally transparent to the Greek authorities. Thus using a corporate structure for your family holdings is still possible, but you'll need to take good advice to make sure you don't get caught in the tax trap.
While in theory you should queue up at a tax office to get your tax number, in practice most foreign buyers have their lawyer do that for them as part of the process. At the same time, you'll get your access codes for the TAXISnet online account, which administers almost all taxes.
If you have rental income in Greece, you have till June to file your report for the tax year ending the previous December.
It's actually not a bad system. But even so, many foreign property owners use an accountant to prepare their tax filings; count on paying around €1,000 a year to get everything shipshape.