New Tax Exemptions For Homes in Greece

1. Extension of VAT Suspension for New Buildings Until the End of 2025

You may have heard of a “VAT exemption” in Greece. Greek developers have the option to apply for a VAT exemption for their construction projects until the end of 2025. In that case, the buyers won’t have to pay 24% VAT for a house in such a project; instead, the buyer will pay 3.09% transfer tax. This is an initiative of the Greek government to make it easier to buy newly built properties.

In plain English, with the proposed changes this week, the VAT exemption is extended from the end of 2024 to the end of 2025.

If you buy a plot with the intention of building a home, you will need to pay transfer tax (3.09%) on the purchase of the plot. When construction starts, the contractor will issue invoices (with VAT) for all construction stages. You cannot get a VAT exemption for these invoices.

2. Exemption From ENFIA for Historic Buildings Worth up to 400,000 Euros

Historic buildings with a taxable value of up to EUR 400,000 are exempt from ENFIA, while temporary exemptions may also be provided for properties located in certain regions of the country.

What is ENFIA Tax?

ENFIA is the main ongoing tax you will pay on your home in Greece. It is calculated based on your tax zone and is therefore higher in more desirable areas (think Mykonos, Santorini, and the centre of Athens) and is lower in the countryside. Usually, for properties in the countryside, it is 3-4 euros yearly per built square meter. For example, a home of 100 square meters would have ENFIA taxes of 300-400 euros per year (depending on the exact location). In the case of unbuilt plots, ENFIA costs are very low.

To see if you qualify, be sure to consult a tax professional for more details.

ENFIA 20% Reduction if you are Insured

If your home has a taxable value of up to €500,000 and is insured against fire, earthquake, and flooding, you may be eligible for a 20% discount on ENFIA.

3. Extension Until the End of 2026 for Capital Gains Tax Sunspension

Yes, that’s a lot of fancy words. What exactly does this mean? This will apply to you if you are planning to sell your property soon.

The capital gains tax (you might also hear it called the “goodwill” tax), is a tax calculated based on the difference between a property's purchase price and sale price. In Greece, it was established in 2013 but suspended later that same year, and this suspension has been extended ever since. Not surprisingly, the Greek government proposed to extend its suspension for another two years. With the suspension, if you plan to transfer property by the end of 2026, you will not be subject to this tax.

This means that as an individual seller, you won’t be taxed in Greece for any profit you make on the sale of your property. Keep in mind that if you are a resident of another country, you may have capital gains taxes in your home country. However, Greece has treaties to avoid double taxation with many nations.

Be sure to consult a tax professional for more details on capital gains tax in Greece.

4. Income Tax Exemption for Three Years for Rentals

Are you planning to rent out your home in Greece? To make a long story short, this new scheme rewards you for using your home for long-term rentals.There will be an income tax exemption for properties that were once declared as vacant (or previously used for short-term rentals) but that will now be used for long-term rentals.The conditions for the exemption are:

• Size: The property needs to have a surface area of up to 120 sqm
  
  

• Timing: Three-year leases must be entered into between September 8, 2024, and December 31, 2025
  
  

• Property’s History: To be eligible, the property must have a history of being vacant or being used only for short-term rentals in 2022, 2023, and 2024

The new tax laws are not yet confirmed and could change in the coming months. Be sure to consult a tax professional for the most up-to-date details.

Disclaimer: The information provided in this article is for general informational purposes only and does NOT constitute legal or financial advice. The current suspension of the 15% capital gains tax on real estate sales for individuals in Greece is valid until December 31, 2026. However, it's crucial to note that Greek tax authorities may still classify a sale as a "business activity" based on specific criteria (e.g., intent for profit, quick resale), which would subject the profit to standard income tax rates and potentially VAT.

For instance, if the property was built or bought specifically for sale rather than for personal use (e.g., never occupied by the owner), the tax office may view the profit as business income. If a sale is reclassified as business activity, the "profit" (the difference between construction cost and sale price) is taxed as business income rather than capital gains. We strongly recommend consulting with a qualified Greek tax professional or lawyer to discuss your specific situation before making any real estate decisions.