Taxation

 

Up to date: 12/31/2013 (Law 4223/2013)

Ownership

Property taxation has increased greatly in recent years in Greece, due to a government effort to accumulate public revenues. However, tax burden related to ownership, is expected to decline in 2014, as some taxes will be abolished, such as EETIDE (Electrified areas fee), and some others will be concentrated in the United Property Tax (EN.F.I.A.).

The principal taxes relating to real estate ownership are:

• EN.F.I.A. (Annual Property Tax) – effective since 2014

This tax is calculated in accordance with the objective value of the property and some other characteristics such as the property’s age. The objective value constitutes a theoretical price per sq.m., defined by Law, and constitutes the base for tax calculation. Firstly, the basic tax depends on the zone price (objective price) of the property and ranges from 2.00€/sq.m. to 13.00€/sq.m. as the following table shows.

 

At the same time, the basic tax can be increased or declines depending the oldness and the floor of the property, as indicated by the following table.

 

It should be mentioned that in the case of auxiliary spaces (garage, storage spaces etc.) and partly completed non-electrified buildings, the rates imposed on the basic tax amount to 0.1 and 0.4 respectively.

Concerning the building plots, the legislator defined 25 tax zones according to the objective value per sq.m. of the plot. The above mentioned zones and taxes are presented in the following table.

 

 

A rate of 1.08 increases the basic tax if the plot has more than 2 frontages, while a decline rate of 0.80 is multiplied if the plot of land has no frontage. If there is a building in the plot, a tax is imposed only on the difference between the area that could be built and the area that has already been built. For instance, a 500 sq.m. plot with a building factor 0.8 and a residence of 300 sq.m.. The tax is imposed on 100 sq.m. of the whole plot.

Additionally, the parcels and the plots outside the city plan, will be taxed with 0.001€/sq.m. Some adjustments are also realized on basic tax according to the rates included in the table below.

 

Example: 5.000 sq.m. plot outside city plan of initial value 6€/sq.m. with olive trees. Tax paid is 17€.

• Additional Tax

If the total value of properties exceeds 300.000€, an additional tax is imposed according to the following scale.

 

 

Example: Total assets (properties) value is 532.000€. The tax due is 396€.

• Revaluation property tax (only for companies- A. 20-27 L. 2065/1992)

The weightings are notified by the relevant Ministry and the final value takes the minimum between updated and objective value both of which are higher than book value of the property, otherwise no accounting treatment is required. If this kind of goodwill is not offset by losses, is taxed by 2% for plots of land and 8% for business buildings.

• Municipality fees

The amount of such fee is calculated both on buildings and plots and depends on the municipality in which the property is located. The tax is included in Public Power Company’s bill.

• Imputed income from owner – occupied housing

Moreover, the Tax Authorities assess a minimum imputed income per year, corresponding to the minimum cost of living. This imputed income is calculated at 3% of the objective value of the property. The imputed income gets increased if the taxpayer is a car or a boat owner. Consequently, the tax is imposed on the greater amount between the real income (from salaries. profits etc.) and the theoretical income. It should be mentioned that till now, the imputed income scheme is not applied to individuals spending less than 183 days in Greece. i.e. are not Greek tax residents and they have no income in Greece.

 

Rents

According to new legislation, the rental income is going to be taxed independently of other taxpayer’s revenues. The following table shows the tax rates applied.

Moreover, 55% of the tax due is paid on advance for the next fiscal year and special solidarity levy is imposed on rental income, as the table below shows.

 

It is noted that rental income does not enter scale in order to calculate the solidarity levy.

Examples:

Rental income 8,000€, tax due 880€, advance tax 484.

Total burden 1,364€.

 

Rental income 25,000€, tax due = 12,000*11%+13,000*33%=5.610€

Tax paid on advance: 5,610*55%=3,085.50€

Special solidarity levy: 25,000*2%=500€

Total burden: 9,195.50€

 

Property transactions

The objective value scheme is also important for the property conveyance. We recall that, according to the objective value scheme, the state determines the lowest property prices for each region, on which various taxes are calculated. Then, the main taxes imposed on property transactions are mentioned.

• Property Conveyance Tax (FMA)

This tax rate amounts to 3% and is calculated on the objective value. Regarding newly built properties, directly bought from the developer, are liable to 23% VAT and no transfer tax is applied.

• Capital Gain Tax

The capital gain tax rate is 15% and is calculated on the difference between the selling and purchase price. If the selling price is lower than the acquisition cost, the taxpayer can offset the difference in a future property trade.

The objective value declines due to the impact of inflation and depends on the years that the seller owned the property, as the following table shows.

 

Inheritance – donation

Inheritance tax is applied to the Greek property depending on the degree of relatives. The following table shows tax brackets for first degree relatives (parental grant, spouses, parents, grandchildren).

 

 

The second category includes second degree relatives (uncles. grandparents. brothers).

 

 

The third category includes other relatives and foreigners.

 

 

The following tables summarize all taxes and charges imposed on properties.