Yes, you do pay VAT on property purchases in Greece, but only when buying new properties directly from developers or companies. For older properties sold by individuals, you pay transfer tax instead of VAT. The distinction depends on whether you’re purchasing from a business entity or a private seller, making it essential to understand which tax applies to your specific transaction.
Understanding VAT obligations for Greek property purchases
Greek property taxation follows a dual system that distinguishes between commercial and private sales. When purchasing real estate in Greece, you’ll encounter either Value Added Tax (VAT) or transfer tax, but never both on the same transaction.
VAT applies exclusively to properties sold by registered businesses, including developers, construction companies, and commercial property entities. This tax structure ensures that business transactions contribute to government revenue through the standard VAT system used across the European Union.
Transfer tax, conversely, applies to properties sold by private individuals who aren’t conducting business activities. This creates a clear legal framework that prevents double taxation whilst ensuring appropriate revenue collection from property transactions.
International buyers must understand these obligations before completing their purchase, as the tax type affects both the total cost and the administrative procedures required for legal compliance.
Do you pay VAT on property purchase in Greece?
You pay VAT when purchasing new properties from developers, construction companies, or other business entities registered for VAT purposes. This includes newly constructed homes, commercial buildings, and properties being sold as part of a business operation.
The key determining factor is the seller’s status rather than the property’s age alone. If a registered company sells a property as part of their business activities, VAT applies regardless of when the building was constructed.
Properties sold by private individuals who aren’t engaged in property development or commercial real estate activities fall under the transfer tax system instead. This distinction protects private sellers from VAT obligations whilst ensuring commercial transactions contribute appropriately to tax revenue.
For international buyers, this means verifying the seller’s legal status before finalising any purchase agreement. Professional legal guidance ensures you understand which tax applies and can budget accordingly for your Greek property investment.
What is the VAT rate for new properties in Greece?
The standard VAT rate for new properties in Greece is 24%, applied to the total purchase price when buying from developers or registered companies. This rate aligns with Greece’s standard VAT rate for most goods and services.
Under Greek law, a ‘new’ property includes any building sold by a business entity, regardless of construction date. The classification depends on the seller’s commercial status rather than the property’s physical age or condition.
This VAT rate applies to the entire transaction value, including any additional services provided by the developer such as furnishing packages, parking spaces, or storage areas included in the sale contract.
The 24% rate represents a significant portion of your total investment, making it crucial to factor this cost into your budget planning. Unlike transfer tax, VAT cannot be reduced through property age or other mitigating factors when purchasing from commercial sellers.
When do you pay transfer tax instead of VAT?
You pay transfer tax at 3.09% when purchasing properties from private individuals who aren’t registered for VAT or conducting commercial property activities. This applies to most resale properties in the holiday home market.
Transfer tax scenarios include purchases from Greek residents selling their family homes, inherited properties being sold by heirs, or international owners selling their holiday properties. These transactions fall outside the commercial VAT system.
The 3.09% transfer tax rate applies to the property’s objective value as determined by Greek tax authorities, which may differ from the actual purchase price. This system prevents tax avoidance through artificially low declared prices.
Determining whether VAT or transfer tax applies requires examining the seller’s legal status and the transaction’s nature. Private sales between individuals typically qualify for transfer tax, whilst purchases from property development companies require VAT payment.
Are there any VAT exemptions for property buyers in Greece?
VAT exemptions for property purchases are extremely limited in Greece, with the standard 24% rate applying to most commercial property transactions. However, certain specific circumstances may qualify for reduced rates or exemptions.
Some agricultural properties and specific rural developments may qualify for reduced VAT rates under particular conditions. These exemptions typically apply to working farms or properties designated for agricultural use rather than holiday homes or residential investments.
Golden Visa investors don’t receive VAT exemptions, but the investment threshold includes VAT when calculating the minimum €250,000 requirement. This means VAT-inclusive purchases can still qualify for residency by investment programmes.
Professional legal advice becomes essential when exploring potential exemptions, as eligibility criteria are strict and misapplication can result in penalties. Most international buyers purchasing holiday properties should expect to pay the full VAT rate when buying from developers.
Key takeaways for international property buyers in Greece
Understanding Greek property taxation prevents unexpected costs and ensures legal compliance throughout your purchase process. The distinction between VAT and transfer tax significantly impacts your total investment and administrative requirements.
Budget planning must account for either 24% VAT on new properties from developers or 3.09% transfer tax on resale properties from private sellers. These taxes represent substantial portions of your total investment and cannot be avoided through negotiation.
Professional legal guidance ensures you understand which tax applies to your specific transaction and helps navigate the complex administrative requirements. This support becomes particularly valuable for international buyers unfamiliar with Greek tax regulations.
Für diejenigen, die erwägen Verkauf Ihres Hauses in Griechenland, understanding these tax implications helps determine the most appropriate sale structure and buyer targeting strategy.
Proper tax planning affects both your purchase timeline and total costs, making professional advice essential for successful Greek property transactions. When you’re ready to navigate these complexities with expert guidance, don’t hesitate to Kontakt our experienced professionals who understand both Greek regulations and international buyer needs.
