- New tax laws for property owners in Greece – UPDATE
This update kindly provided by Maria Rizopulu, solicitor, Skopelos Greece
An older tax regulation which applies to foreign owners of property in Greece has been “revived”. Owners of Greek property living abroad are now obliged to file annual income tax returns.
The I.R.O (Internal Revenue Office) assumes the income you need to prove to maintain your property. (calculations according to square meters of property), the pool and the car you own, there is also a yearly income amount that is assumed you will need to support yourselves in Greece (whether you have been to Greece or not throughout the year) The amount is 3,000 euros for unmarried owners and 5,000 euros for married couples (if the property is in both names). These amounts are added to your total annual tax bill. For this additional assumed amount you need to pay extra tax of euro 230 for unmarried owners or, euro 380 for married owners.
Proof must be attached to your tax return that you have imported into Greece the relevant amount during last year by transfer from a non-Greek bank to your Greek bank. (Please note that the name on the sending account must match the name on the beneficiary account).
Proof is in the form of the certificates from the Greek bank (called in the past – pink slips). If you don’t have that proof than you will be taxed by 5% as if that amount (assumed income) was really income.
The taxation is 5% – Not 10% ( as previously mentioned) for the amount of euros you are not able to prove importation for (pink slips).
You should ensure that whoever is to make your tax return has plenty of notice. Tax returns can now be filed electronically and individual code numbers have to be issued.
Tax returns for foreigners are filed during May and any “pink slips” should reach your tax representative by mid April at the latest
An additional (approx.) 53% of the tax is charged as advance payment for the next year which can be returned if you have the necessary pink slips to prove and cover the amount to you would need to import.
If you do not pay this tax then you will be fined and if you owe more than 5000 euro you could e sent to prision.
To explain
Property owners in Greece are now charged ‘a living expense tax’ of euro 3000 if you are a single person and euro 3000 for each single owner of the same property. So, if there is 3 single owners of one property you are charged euro 15000. It is euro 5000 if you are a married couple.
You are then charged tax for each square meter of property you own. The pool and type of car you own are also calculated taxed accordingly. (Please see the culculation table below.)
Before you panic, you do not have to pay euro 3000 or, euro 5000 and then for each added square meter of property per year. YOU ONLY HAVE TO PAY 5% of the entire culculated final amount.
For example it is: 230 or 380 euros for assumed income to support yourselves in Greece and then, 5% of each square meter of property. If you own a car and pool, It is 5% for type of car and pool.
Property owners only pay tax on the on the amount they cannot prove they have imported into Greece. So if your final tax amount is culculated at 6000 euro per year and you have not imported any euros. Your tax bill is 300 euro. If you have imported 2000 euro your tax bill for the year will be 5% of the remaining 4000 euro (euro 200 to pay). If you can prove import for the full amount then you pay zero tax that year.
How do you import your euros into Greece?
You can transfer your money directly into your Greek bank account
You can withdraw money from your UK GBP from a cash machine in Greece.
BEWARE: IF FOR EXAMPLE, YOUR ACCOUNT IS WITH THE NATIONAL BANK OF GREECE YOU CAN ONLY WITHDRAW MONEY FROM A NATIONAL BANK OF GREECE CASH MACHINE – THE CASH MACHINE MUST MATCH THE BANK YOUR ACCOUNT WITH. YOU MUST KEEP THE SLIP THAT COMES OUT OF THE MACHINE.
Take your cash machine slips to the bank with your bank book and ask them for pink slips. Remember to ask for a pink slip for all the money transfered into your account from abroad. Give your lawyer the pink slips you got from the bank and have your tax return done. More to follow…
Please see the new Greek property tax laws explaned below:
Houses
the first 80 square meters ———€30 per sq.m.
next 81-120 sq.m ——————–€50 per sq.m.
next 121-200 sq.m——————-€80 per sq.m
next 201-300 sq.m——————-€150 per sq.m.
300 sq.m ——————————€300 per sq m.
Garages/storage rooms and other “assisting” rooms (as in the building permit) €30 per sq. m.
All above stated amounts have a 20% levy if they are independent private houses (not apartments) as it is the usual thing for foreigners.
If the house is a secondary house for you (not main residence) the above amounts are reduced to ½. This applies only if you declare residency abroad and not in Greece.
Cars
Cars up to 1,200 cc ————— €3,000
1,200-2,000 cc ——————— €300 per 100 cc
2,000 c———————————€500 per 100 cc
The amount is reduced depending on how old the car is:
30% for over 5 years to 10 years old
50% for over 10 years old
Pools
External: up to 60 sq.m. ————-€60 per sq.m.
over 60 sq.m. ————————–€200 per sq.m.
Internal pool: —————————The amount is doubled
Please see an example below:
A house of 110 sq. m. with an external pool of 30 sq.m.
House
The first 80 sq. m. at €30 per sq.m. —————— €2,400
The next 30 sq. m. at €50 per sq.m. —————– €1,500
Subtotal: —————————————————– €3,900
Plus 20% levy: ——————————————— €780
Subtotal: —————————————————–€4,680
Less 50% “second house” allowance, leaves — €2,340
Pool
30 sq. m. at €60 per sq.m. —————————– €1,800
Yearly assumed income to support yourselves in Greece
—————————————————— €3,000 0r €5,000
Total: ——————————————– €7,140 or 9,140
This is the amount you must demonstrate you have imported during the tax year to pay zero tax.
If you have only imported €3,671 (for example) you must pay 5% of the balance
For a single owner – Total to pay: €173,45
For a married couple – Total to pay: €273,45
For multiple single owners – Amounts are multiplied by number of owners.
To contact Angels Greek Island Homes click here:
I am not sure about this ‘assumed’ income of 3000/5000 euros. Many of my friends have certainly not paid the tax of 230 euros – most only about 50 euros. And what if your total income in UK is only 3000 for the year? How are you expeceted to pay such a high tax bill?
I think the tax officials only ‘assume’ an income if you have not put in your pink slips. is this not the case? And I do not think there is a condition you have to import 3000 euros yearly. What if you are only there for a month a year?
Comment by Julie Peakman — July 28, 2011 @ 4:24 pm
I amazed but not surprised that inability to tackle tax evasion and corrupted tax inspectors has resulted in such a stupid law. I wanted to invest in a house in Greece but now I see no reason to do this. I was thinking of retiring in Greece but now forget it.
Well I wish my compatriots well. I will be following developments from a distance.
Comment by greeks abroad — August 31, 2011 @ 6:55 pm
I have a question about the tax and date of ownership. Is there a specific date that you have to have owned the property for the tax to be imposed.
Comment by USGreek — December 2, 2011 @ 3:18 pm
Julie (and others): our accountant in Alonnysos has calculated that even for a non resident the assumed income (for a couple) of 5000 euros plus house ‘costs’ at 30 euros per square metre must stand. I think this should be illegal under EU law but beware of provoking the Minoan bull as the new property taxes are still relatively light in the islands- France for example is toying with its own draconian property tax proposals for non residents.
I have been told that once you have the pink slips to cover the assumed income you can do anything with the money – eg repatriate the bulk of it (less anything you have actually spent of course) back to where it came from until the next year! This would seem to make nonsense of the law – any comments?
Comment by anthony Lambert — December 14, 2011 @ 7:02 pm