- Greek Property Laws
Changes to the law
New tax laws were brought in on 1 st January 2006 that will affect anyone wishing to buy or sell property in Greece
The first concerns the “objective value” which is the value of the house or land based on a formula and typically 60% or less of the market price. The government wants to bring the objective value closer to the market value because the property transfer tax is calculated on the objective value.
At the same time it intends to reduce the percentage charged for tax.
It is not clear whether the net effect will be to raise taxation overall, largely because the details of the legislation have not been revealed. We’ll keep you informed.
The second change is that VAT at 19% will be charged on new building work from 19th January 2006. Building permits issued before this time will probably not attract the VAT, even if the building work starts later.
As a result, many Greeks and others in the know are buying their plots of land and getting building permits as quickly as possible.
Building permits issued before this time will probably not attract the VAT, even if the building work starts later (although the details have not been published)
There is also an introduction of capital gains tax on the resale of property. The government has designed these taxes to combat tax and real-estate speculation.
On the sale of houses built before January 2006 purchase tax will now be paid at 7%, 9% or 11% depending on the price the property is bought for.
The capital gains tax has a diminishing rate and is set against the number of years a person owns their property. If a property is sold with less that five years of ownership tax is charged at 20% of the price difference between the original purchase price and the price sold. If the property has been owned for between five to fifteen years then tax is charged at 15%, for properties owned for 15 to 25 years tax is charged at 5%. No tax is charged on properties owned for more that 25 years.
Capital gains tax will be have to be paid if you buy a property built after January 2006 or if a property has been sold once since that date. In addition there is now a 1% tax to be paid on transfer of property
