Capital gains tax in Greece is one of the most misunderstood topics for foreign property owners. Many buyers hear that “there is no capital gains tax”, while others worry that selling a property could result in unexpected taxation.
The short answer is that you don’t pay capital gains tax on a straightforward property transaction if you’re selling a property at a higher price than you bought it. The longer answer is more complicated and needs more context and explanation. Greece does have a capital gains tax framework, but its application for individuals has been repeatedly suspended for more than a decade. Understanding how and why this happened, and whether the tax may still apply, is essential for anyone buying or selling property in Greece. In this article, we aim to clarify the situation to avoid any misconceptions.
A Simple Example: Will You Pay Capital Gains Tax?
Let’s start with a real-world scenario:
Mark and Sophie, a couple from the Netherlands, bought a nice property in Greece in 2018 for €225,000. After using and enjoying this property for some years, they are about to sell it in 2026 for €385,000.
Will they pay capital gains tax?
No. They will not pay any capital gains tax.
Despite the profit they are about to make, no capital gains tax is due, as the sale is treated as a private transaction and not as a business activity.
This often surprises foreign owners, so let’s look at why.
Does Capital Gains Tax Exist in Greece?
Yes and no. Capital gains tax does exist in Greece, but only on paper. The story dates back to 2013, when Law 4172/2013 introducing this tax was voted on during the height of the Greek financial crisis, as part of broader efforts to increase state revenue. The tax was scheduled to take effect on January 1, 2014.
The idea was simple: when someone sells property at a higher price than they acquired it, the difference (the “gain”) would be taxed. Every owner was entitled to a tax-free profit of €25,000, and if the profit was higher, a capital gains tax would apply, adjusted according to the length of time the property was held. This new law was supposed to be enforced by notaries, who were asked to calculate the exact profit made. However, in practice, the system proved extremely difficult to apply.
Why the Tax Was Never Properly Implemented
From the very beginning, the biggest issue was how to define the acquisition price, especially for older properties, inherited homes, or properties acquired decades earlier. Imagine your grandfather inheriting a piece of land 50 years ago, where your parents slowly built a home over the years. No invoices, no purchase deeds. How do you calculate an acquisition price for such a property?
Notaries, who were legally responsible for applying the tax during property transfers, faced significant challenges because there was no clear or consistent way to calculate the taxable gain in many cases.
As a result, notaries effectively stopped applying the tax, even organising work stoppages, because it was impossible to implement fairly and legally. This caused unrest in the market, as contract signings stalled and, in some cases, came to a complete standstill. As a result, the Greek government suspended the capital gains tax for individuals on the 1st of January, 2015, and has continued doing so year after year to date.
Continuous Suspension: What’s the Situation Today?
The capital gains tax law still exists, but has effectively remained “frozen” for more than a decade. For individuals, the capital gains tax on real estate sales is, once again, currently suspended until December 31, 2026.
This means that, in standard private sales, individual sellers do not pay capital gains tax.
Importantly, Greece’s economic environment has changed significantly since 2013. The country is no longer in crisis mode, and there is little political appetite to reintroduce a tax that proved unworkable and discouraged transactions.
Does This Mean Private Owners Never Pay Tax on Property Profits?
Not exactly. While this is true for probably 99.99% of all private property transactions, there are two key situations in which tax authorities may step in: in some exceptional situations, they may treat a sale as a business transaction, even if it’s performed by private persons.
1. Repeated Transactions (Business Activity)
If a private person completes three or more property transactions within two years, the tax office may classify these as business activity rather than private ownership. In that case, profits are taxed under business income rules (currently 22%).
2. Property Built or Bought for Immediate Sale
If someone buys or builds a property, never occupies it and/or sells it quickly at a significantly higher price, the tax authorities may argue that the intention was to resell it for profit.
In such cases, the profit (sale price minus construction or purchase cost) may again be treated as business income, potentially subject to income tax and, in some cases, VAT.
What About Companies and Legal Entities?
For legal entities (companies), the situation is different.
Companies do not benefit from the suspension in the same way individuals do, as the capital gains tax was intended only for private persons and didn’t apply to companies. For companies, property profits are generally taxed as part of corporate income under standard corporate tax rules. The profit from the sale of property for businesses is taxed at the applicable corporate tax rate, which currently is 22%.
This is why the distinction between private ownership and business activity is so important when structuring a purchase.
The Bottom Line
The capital gains tax in Greece is a classic example of a law that exists but is not applied in practice. For private sellers, capital gains tax has effectively been non-existent for over a decade.
However, this does not mean that all profits are always tax-free. Transactions that resemble professional trading or development can still be subject to taxation under business income rules.
Disclaimer: The information provided in this article is for general informational purposes only and does NOT constitute legal or financial advice. We strongly recommend consulting with a qualified Greek tax professional or lawyer to discuss your specific situation before making any real estate decisions.
