Quick overview of Greek Real Estate

Rental income and capital gains on Greek real estate

Taxpayer

Basis of Tax

Tax levied

Tax Rates (2020)

Resident Individual

Rental Income
Capital Gains

Individual Income Tax
Individual Income Tax

15-45%

Not Applicable

Non-resident Individual

Rental Income
Capital Gains

Individual Income Tax
Individual Income Tax

15-45%

Not Applicable

Resident Company

Rental Income
Capital Gains

Corporate Income Tax
Corporate Income Tax

24%

24%

Non-resident Company

Rental Income
Capital Gains

Corporate Income Tax
Corporate Income Tax

24%

24%

Rental income

Individuals

Introduction
Rental income is taxed as ordinary private or business income.

Liability to tax

Rental income received by individuals is subject to individual income tax.

Basis to tax

Income of individuals is allocated to one of the following four categories (schedules):

  • Income from employment and pensions
  • Business income
  • Investment income
  • Income from capital gains

Rental income is categorised as investment income and is taxed at the following rates:

Rental/ Income Bracket (€)

Income Tax Rate

0-12,000

15%

12,001 - 35,000

35%

31,001 -

45%

 
Companies

Introduction
Rental income is taxed as business income.

Liability to tax

Rental income earned by companies is subject to corporate income tax as business income. Business income is the profit resulting from the deduction of expenses from gross revenue i.e. the profit and loss account determined in accordance to Greek accounting standards.  All forms of legal entities (including limited liability companies, private limited companies and partnerships) are subject to income tax under identical rules.

Basis to tax

Business income is taxed at the rate of 24%.

Capital gains

Individuals

Introduction
In general, capital gains realised by individuals are subject to personal income tax (see basis
of tax below).

Liability to tax

Capital gains realised by individuals are calculated as the difference between sales and purchase price and are subject to income tax at a rate of 15%.

Basis of tax

Capital gains are generally taxable at a rate of 15%. The taxation of capital gains realised on the disposal of real estate is deferred until 31 December 2022. This deferral has been enacted every year since 2013 and is expected to continue until other taxes on real estate are rationalised.

Companies

Introduction

Capital gains realised by companies are subject to corporate income tax as business income.

Liability to tax

Business income is taxed at a rate of 24%.

Greek VAT & transfer taxes

Taxpayer

Basis of Tax

Tax levied

Tax Rates (2020)

Resident Individual

Rental Income
Transfer of real estate services

Value Added Tax
Transfer Taxes

24%

3%

Non-resident Individual

Rental Income
Transfer of real estate services

Value Added Tax
Transfer Taxes

24%

3%

Resident Company

Rental Income
Transfer of real estate services

Value Added Tax
Transfer Taxes

24%

3%

Non-resident Company

Rental Income
Transfer of real estate services

Value Added Tax
Transfer Taxes

24%

3%

Value Added Tax

Individuals

Introduction

Value-added tax is a tax based on the increase in the value of a product or service at each stage of the supply chain.

Liability to tax

If an individual performs commercial or professional activities in Greece, it will be in principle subject to VAT.

Basis of tax

As a general rule, the supply and lease of immovable property are exempt from VAT. However, VAT is charged if a newly created building is sold prior to its first occupation. The applicable VAT rate is 24%.

Interaction with transfer tax

Where VAT is charged because a newly created building is sold within two years of its first occupation, the transfer of the real estate is exempt from transfer tax.

Companies

The same rules as for individuals apply.

Transfer Taxes

Individuals

Introduction

Transfer tax is a tax on the passing of real estate from one person or company to another. Rights of immovable property qualify as real estate. 

Liability to tax

Transfer tax applies to the acquisition of the legal or economic ownership of Greek real estate and is payable by the purchaser.

Basis of tax

Real estate transfer tax is levied on the taxable value (commonly referred to as ‘objective’ value) which is calculated based on a number of factors such as the location and other characteristics of the property.

Exemptions

There are various exemptions available in the case of first residence and agricultural land. However, various detailed conditions apply.

Companies

The same rules as for individuals apply.

Greek Local taxes

Taxpayer

Basis of Tax

Tax levied

Tax Rates (2020)

Resident Individual

Size of property

Municipal Tax

Depends on the municipality

Non-resident Individual

Size of property

Municipal Tax

Depends on the municipality

Resident Company

Size of property

Municipal Tax

Depends on the municipality

Non-resident Company

Size of property

Municipal Tax

Depends on the municipality

Introduction

Every municipality levies an annual municipal tax on Greek real estate. The annual municipal tax is deductible from rental income.

Liability to tax

Every owner or user of residential or commercial buildings in Greece is liable to local municipal tax.

Basis of tax

The local tax is based on the size of the property. Local authorities determine the local tariffs.

Greek Net Wealth/worth taxes

Taxpayer

Basis of Tax

Tax levied

Tax Rates (2020)

Resident Individual

Tax Value

Annual real estate tax

0-1%

Non-resident Individual

Tax Value

Annual real estate tax

0-1%

Resident Company

Tax Value

Annual real estate tax

0-1%

Non-resident Company

Tax Value

Annual real estate tax

0-1%

Individuals

Introduction

Annual real estate tax (ENFIA) is a tax levied on the total value of real estate owned by an individual or company.

Liability to tax

Annual real estate tax is due on the total value of real property owned by an individual on January 1st of each year.

Basis of tax

The basic tax depends on the size and location of each property and varies from €0.003 to €9.00 per square meter. The additional tax is levied on the total taxable value of an individual’s properties at rates ranging from 0% to 1%.

Companies

Same rules as for individuals apply.

Vehicles for Greek real estate

Commonly used vehicles for Greek real estate

Limited

The so-called ‘AE’, the Greek limited liability company, and the ‘IKE’, the Greek personal limited company are the most frequently used vehicles for the ownership of Greek real estate. The equity is divided into shares and the shareholders of the AE and IKE are not personally liable for debts of the business.

Partnership & joint ventures

Partnerships and limited partnerships are rarely used for holding real estate.

Trusts

The concept of the trust is not known under Greek law. For tax purposes, the assets and liabilities of a trust are allocated to the trustor as personal income. Profits realised by the trusts will be taxed on the trustor as personal income tax.

Unlisted legal entities which do not disclose their beneficial owners are subject to an annual special tax levied on their taxable (objective) value at the rate of 15%. Evidently, this is a prohibitive anti-tax evasion tax.

Specific real estate vehicles for Greek real estate

Real estate investment companies

Real Estate Investment Companies (ΑΕΕΑΠ) are limited liability companies with a minimum share capital of Euro 25 million, which invest exclusively in real property. ΑΕΕΑΠs enjoy considerable tax exemptions from property taxes and are subject to income tax, not on their profit, but on a percentage of their portfolio of real property.

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