You’re on your way to buying your dream property in Greece. The home you viewed has a sea view, access to the beach, and your favorite taverna is within walking distance. The home has captured your heart, and you’re convinced it’s the right place for you. When purchasing a property in Greece, one thing to keep in mind for the future are taxes.
Taxes at Time of Purchase
On most real estate sites, all prices are excluding taxes. In purchases of a home in Greece, one of two taxes will apply: Transfer tax or Value-added tax (VAT).
Transfer Tax
The transfer tax which you pay when purchasing a property in Greece is called FMA. It is 3.09% of the purchase sum, and it’s for the buyer to pay. Transfer tax is paid when purchasing plots or existing houses. This tax is based on the purchase price or the so-called ‘objective tax value’ of the property, whichever is higher. The objective tax value is calculated by the tax office based on objective criteria, independent of the sale price. In the Greek countryside, this value is very rarely above the market price.
Value-Added Tax (VAT)
Good to know: all homes on our website include VAT, where applicable. Normally, building companies or professional builders need to charge 24% VAT when transferring newly built homes to their first owners.
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 2024. 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.
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 can not get a VAT exemption for these invoices.
Annual Taxes
ENFIA
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.
Rental Tax
Note that if you don’t plan on renting out your home in Greece, this section won’t be relevant. If you plan on renting out your property, you will need to pay tax on rental income in Greece. For individuals, progressive tax rates apply to rental income and are calculated per owner on the gross rental income of the property.
- Up to a rental income of €12,000: 15 percent
- Between €12,001 & €35,000: 35 percent
- Greater than €35,000: 45 percent
Benefits of Co-Ownership
In general, it benefits couples to buy with two names rather than one, because the above tax rates apply per owner.
With two buyers, the tax brackets are as follows:
- Up to a rental income of €24,000: 15 percent
- Between €24,001 & €70,000: 35 percent
- Greater than €70,000: 45 percent
In cases of high-income rental properties, it is almost always best to purchase property as a company because you can deduct expenses, costs, and the depreciation of the building. Company tax in Greece is 22% and will decline in the coming years. To see how you can purchase as a company, contact us. Our legal team would be glad to help you explore this option.
Capital Gains Tax
Good news – according to current legislation, the capital gains tax is suspended in Greece until 2024, and the suspension will likely be extended after that every 2 years. 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 in your home country for more details.
TAP (Telos Akinitis Periousias)
TAP is a tax from the municipality and is the smallest of the taxes listed. TAP is usually only a few euros and is charged to your electricity bill.
Doing Your Taxes in Greece
It’s always helpful to work with an accountant, since they understand the local systems and will save you a lot of time doing taxes in Greece. You can expect to pay them about 150-200 euros per year for filing taxes.
