Property Taxes in Greece: The Ultimate Guide by Experts

When purchasing real estate in Greece, you will eventually have to pay property taxes, including acquisition and annual property taxes. You must also pay taxes on rental income if you rent out a property. The good news is that property taxes in Greece are lower than those in the US, even though some are slightly higher than the average across the EU. Nevertheless, the tax system is simple to use; you receive your tax identification number as soon as you purchase a property, and it can be managed online. In this guide, we’ll explain some of the property taxes in Greece:

Your Guide to Property Taxes in Greece

There are certain taxes in Greece that every foreigner must consider, especially when purchasing property there. Before diving into the specifics of the Greek property tax 2022, let’s take a look at these general taxes:

• Corporate income tax – 29 percent
• Dividend tax – 15 percent
• VAT (value-added tax) – 24 percent
• TAP (municipal tax) – 0.025 – 0.035 percent
• Real estate transfer tax – 3.09 percent
• ENFIA (uniform real estate property tax) – €0.0037 to €11.25 per m2
• Special tax – 15 percent

Transfer Tax

There is a real estate transfer tax that you must pay when buying a home in Greece. The tax rate is 3.09 percent of the taxable property value. To determine a property’s value, the Greek Ministry of Finance established a new Objective Value system for prices per m2 in 13,808 property areas in the country in December 2021. The Objective Value system determines how much a property should be worth according to its location, size, and technical specifications. This value is then used to determine the transfer tax payment that has to be made by the buyer.

Note that when the Objective Value exceeds the purchase price, you’ll pay tax on the Objective Value. More significant investment properties may be transferred through a share arrangement, exempting them from real estate transfer taxes.

Rental Tax

When renting a property in Greece, you must pay tax on your rental income. People have progressive tax rates depending on the gains accrued from the rent.

• 15 percent for rent up to €12,000
• 35 percent for rent between €12,000 and €35,000
• 45 percent for rent upwards of €35,000

Rental income is part of the taxable income for corporations. The corporate tax rate is 29 percent, with a 15 percent dividend WHT. Foreign investors may qualify for the Parent-Subsidiary Directive exemption if they own Greek companies through an EU-based corporation, and there will be no dividend WHT in this situation.

Rental income is subject to solidarity contribution, calculated on a progressive tax scale of up to 10 percent. A person’s total income is used to determine mutual assistance. You must declare your overall income since the government in Greece is cautious about this; they maintain tabs on landlords who own rental units. Therefore, homeowners may face penalties if they fail to disclose their rental revenue.

Capital Gains Tax

If you have owned of a property for less than five years and decide to sell it, any profits you make will be subject to a 15 percent tax. However, the profits you gain from a property will not be subject to taxes if you have owned it for more than five years. Remember that if you are a resident of another nation, your capital gains tax rate may be higher.

ENFIA

The ENFIA tax is a standard real estate property tax. Both natural and legal entities that possess real estate in Greece must pay it yearly. There are two options for you to make an ENFIA payment: either as a lump sum payment or five monthly payments between September and January.

The objective property value measured on 1 January each year serves as the ENFIA’s tax base. Tax authorities make an assessment, and regarding ENFIA, there are two different tax rates:

• Primary tax: Each property is subject to a primary tax. The floor, price zone, surfaces, building age, facade, the proportion of ownership, and other specific elements are some of the criteria that determine the tax.
• Secondary tax: For individuals, the tax is assessed when the owner’s total property value exceeds €200,000. An additional secondary tax of 0.1 – 1.15 percent is for the excess amount. The tax is assessed on the aggregate value of each owner’s property with regard to legal entities, and it is 0.55 percent of the total value of all the properties. A tax rate for immovable property is 0.10 percent for properties utilized for conducting/producing business activities.

TAP

TAP (Telos Akinitis Periousias) is a municipal tax typically added to electricity bills and assessed at a rate of 0.025 to 0.035 percent of the property’s actual value. The owner of the property is subject to it. However, if the bill is issued in the tenant’s name, the sum is deducted from the monthly rent. Municipalities may also apply additional taxes depending on the area, activity, and other factors.

Special Tax on Property (SRET)

The special tax on property applies to all Greek corporations with real estate holdings. The government expects to stop businesses from hiding their real estate properties with this tax. The company must pay a 15 percent yearly rate on the property’s objective worth if it is not exempt.

The following exemptions apply:

• From corporations with registered shares to individuals, the companies must be residents of Greece or another country. Individual shareholders must also keep their Greek tax identification number current.
• Businesses that banks and prominent investors own are exempt from disclosing ownership information to individuals (if the latter are not established in the non-cooperative states and if they are being kept in check by a state’s authorized supervisory authority).
• Organizations whose shares are listed on a regulated exchange
• Shipping or ship owner firms with Greek offices that use their real estate only as offices or warehouses or lease to other shipping companies
• Legal entities with a focus on philanthropic, educational, cultural, and religious activities for the buildings that are used to support those purposes and for abandoned buildings or other property that they exploit. The requirement is that any profits must be allocated to the goals mentioned above.
• Companies operating in Greece in commerce, industry, or manufacturing – the gross income from this activity should be higher than the gross income from the real estate they own during the relevant fiscal year. Regardless of the country in which they were founded, if the aforementioned legal entities build a space to use solely for the pursuit of their commercial, manufacturing, or industrial activity (self-use), they are eligible for a seven-year SRET exemption beginning with the submission of all required paperwork for the granting of the building permit.
• For companies whose registered shares or stocks belong to a national or foreign institution seeking philanthropic objectives in Greece.
• Social security organizations, insurance funds, or real estate mutual investment companies and regulated funds supervised by the competent authority at the place of their registration. Except for those whose registered office is in non-cooperative states.

Greece Non-dom Tax Regime

In December 2019, Greece implemented a new non-dom tax regime, which provides foreign nationals who transfer their tax residence to Greece the opportunity to exclude foreign income from taxation. Instead, they can fulfill their tax obligations by paying a fixed annual tax amount of €100,000. A distinct feature of the non-dom regime is that the tax exemption is extendable to relatives of the non-dom resident, provided they pay an additional annual fee of €20,000 per resident.

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Taxes on Exit

Income from the sale of real estate is included in the company’s taxable profits when it sells its property. They are, therefore, subject to the standard income tax rate. The most typical exit structure is a share deal.

Greek entities that transfer non-listed shares in Greek companies are subject to a 29 percent income tax rate. When selling shares in a Greek or foreign corporation that owns real estate in Greece, two categories are exempt from paying capital gains tax:

• Legal entities from other countries without a permanent presence in Greece
• Individuals who are tax residents of nations with which the government of Greece has signed a DTA (Double Taxation Agreement)

Other Issues

To get your tax identification number, you must visit a tax office. However, most foreign buyers grant their attorneys power of attorney to take care of things on their behalf.

Engaging with an accountant while filing taxes could be beneficial to avoid any future hassles. Many foreign property owners are already doing this. You’ll pay about €1,000 a year for it.

If you get rental income in Greece, you must file the annual tax report for the previous year anytime between the end of December of that year and before the start of July the following year.

Frequently Asked Questions about Property Taxes in Greece

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