1. Which assets are subject to real estate transfer tax and who is obliged to pay the tax due?
Any transfer of real estate (reciprocal contracts) and transfers of ships flying the Greek flag. The tax debtor is the acquirer.
2. Which tax office is responsible for filing the tax return?
Before any real estate transfer, the parties must jointly submit a real estate transfer tax return to the tax office where the property is located.
3. What is the procedure for filing the tax return and paying real estate transfer tax?
The tax return is submitted in duplicate, one copy of which is handed over to the responsible official of the tax office; the second copy shall be sent to the party after confirmation of its correctness. The tax is paid in credit institutions or at the post office by means of a payment code. The payment receipt subsequently issued with a payment note is the proof of payment.
4. How is the real estate transfer tax paid?
When filing the real estate transfer tax return, the taxpayer must declare the assessed value of the property to be transferred. The tax incurred is then calculated according to this. If the purchase price is higher than the standard value, the tax is calculated from this higher purchase price.
In areas without standard values, the taxpayer pays the entire tax due when filing the tax return on the basis of the value he has declared. With the submission of the tax return, the head of the tax office provisionally determines the market value of the property within a period of two (2) days. The buyer is then entitled within a two-month period (running from the date of filing of the tax return) to submit an additional return according to the provisionally determined value, and to pay the tax due within two months in two equal instalments without a fine. If the above additional declaration is not submitted, the head of the tax office carries out a check on the determination of the value, without taking into account the preliminary assessment. An administrative act is then issued with the corrected assessment of the tax.
In the case of the final administrative act on the corrected tax assessment, the taxpayer is entitled to file an objection within thirty days of publication in order to have the administrative act re-examined in the context of administrative proceedings; After the relevant decision has been issued, the taxpayer has the option of taking legal action before the administrative courts.
5. What tax rates are used as a basis for calculating real estate transfer tax?
The real estate transfer tax amounts to 3% of the taxable value of the property or the right in rem.
The above tax rate applies to real estate transfers carried out from 1/1/2014. The real estate transfer tax incurred is reduced by half or to a quarter, depending on the legal form of the transfer carried out or the status of the parties involved.
- Reduced real estate transfer tax to a quarter: In the event of a total distribution of real estate between the co-owners, dissolution of an OHG, KG and GmbH and transfer of the company’s real estate to its members according to their shareholding, as well as in the case of the withdrawal of real estate from the company by retiring partners.
- Half reduced real estate transfer tax:
In the exchange of equivalent real estate, mandatory exchange of land, in mergers of public limited companies and cooperatives, compulsory expropriations for the public benefit, as well as in the case of mergers of real estate.
6. In which cases of the construction or modification of horizontal or vertical residential property is real estate transfer tax due?
In all cases where the condominium ownership is established or changed, it must be checked whether a transfer of real rights to real estate between the co-owners takes place directly or indirectly. This can take the form of distribution, exchange, sale or the gift of co-ownership shares, for example. Examples include:
- Construction of horizontal or vertical land with existing buildings
- Establishment of a future right to vertical construction with existing buildings.
- Amendment of the statement of reasons with separation of part of the horizontal residential property and transfer to another, horizontal residential property of another co-owner.
- Justification with distribution of the simple right of ownership.
- Distribution of an existing vertical residential property on a plot of land with buildings.
- Abolition of the already existing establishment of a plot of land with buildings.
7. Fictitious income (so-called “tekmirio”) – Under what conditions does it apply?
- Co-ownership shares in the property must be transferred.
- The transfer must be made in return.
- A building permit for the construction of an apartment building must already be granted, or an application in this regard must be submitted within 2 years of the transfer at the latest, and
- The construction of the buildings must be
* either by the seller of the land shares, or
* by the building contractor, who financed the construction of the apartment building by means of construction consideration,
has taken over, or
* by a third party acting either on behalf of the landowner or the developer.
The above, incontestable fictitious income does not apply to transfers of co-ownership shares to persons who take over the construction of the entire building on a commercial basis.
8. Right to object
a) If the taxpayer contests an act of assessment relating to real estate transfer tax (administrative assessment of the tax), he or she is entitled to lodge an objection within thirty days from the date of publication of the administrative act in order to have the corresponding administrative act re-examined by the conciliation body within the framework of the administrative procedure provided for (Article 63 of Law 4174/2013). The taxpayer may appeal against the decision of the conciliation board or, in the event of an implied rejection of the objection by expiring the deadline for giving reasons (60 days from the filing of the objection), to the competent administrative court.
It should be noted that any objection lodged directly (i.e. without the conciliation procedure) with the Administrative Court against the administrative act issued by the Tax Administration will be rejected as inadmissible.
b) If, after review, an amended provisional administrative act determining the is issued, the taxpayer may express his views within twenty (20) days from the date of service of the written notice.
The Tax Administration shall issue the final administrative act on the corrected assessment of the tax within one month from the date of submission of the taxpayer’s written opinion, or, if it has not been submitted, upon expiry of the 20-day period. The final administrative act for the corrected assessment of the tax is served on the taxpayer together with the audit report. The taxpayer is then entitled to file an objection within thirty days of the announcement in order to have the file re-examined by the conciliation board in the context of administrative proceedings. If the objection is lodged directly with the administrative court (i.e. without the conciliation procedure) against the administrative act issued by the tax administration, it must again be rejected as inadmissible.
Tax exemptions
9. Who is exempt from real estate transfer tax for the acquisition of the first residence?
The tax exemption is granted only to natural persons (married or single), provided that they have their permanent residence in Greece or transfer it within two years of acquisition at the latest (Article No. 23, paragraphs 4-5, Law 3943/2011, Government Gazette No. 66 A’/31-3-2011).
The provisions of Article 21 of Law 3842/2010 no longer provide for tax exemption for Greek citizens who are permanently resident abroad at the time of acquisition. In addition, the categories of beneficiaries have been defined as follows:
a) Greek citizens
b) people of Greek origin from Albania, Turkey and countries from the former Soviet Union,
c) citizens of the EU Member States and the European Economic Area,
d) Recognised refugees in accordance with the provisions of Ministerial Decree 96/2008 (Government Gazette No. 152 A), and
e) Citizens of third countries who are entitled to long-term residence in Greece in accordance with the provisions of Ministerial Decree 150/2006 (Government Gazette No. 160 A).
The intention to settle permanently in Greece is not indicated by the fact that the competent authorities issue temporary residence permits to foreigners for special reasons.
Citizens of northern Epirus (Albania) and Turkey, provided that they have obtained a nationality of a third country, with the exception of Albanian and Turkish citizenship, are subject to
7. Fictitious income (so-called “tekmirio”) – Under what conditions does it apply?
- Co-ownership shares in the property must be transferred.
- The transfer must be made in return.
- A building permit for the construction of an apartment building must already be granted, or an application in this regard must be submitted within 2 years of the transfer at the latest, and
- The construction of the buildings must be
* either by the seller of the land shares, or
* by the building contractor, who financed the construction of the apartment building by means of construction consideration,
has taken over, or
* by a third party acting either on behalf of the landowner or the developer.
The above, incontestable fictitious income does not apply to transfers of co-ownership shares to persons who take over the construction of the entire building on a commercial basis.
8. Right to object
a) If the taxpayer contests an act of assessment relating to real estate transfer tax (administrative assessment of the tax), he or she is entitled to lodge an objection within thirty days from the date of publication of the administrative act in order to have the corresponding administrative act re-examined by the conciliation body within the framework of the administrative procedure provided for (Article 63 of Law 4174/2013). The taxpayer may appeal against the decision of the conciliation board or, in the event of an implied rejection of the objection by expiring the deadline for giving reasons (60 days from the filing of the objection), to the competent administrative court.
It should be noted that any objection lodged directly (i.e. without the conciliation procedure) with the Administrative Court against the administrative act issued by the Tax Administration will be rejected as inadmissible.
b) If, after review, an amended provisional administrative act determining the is issued, the taxpayer may express his views within twenty (20) days from the date of service of the written notice.
The Tax Administration shall issue the final administrative act on the corrected assessment of the tax within one month from the date of submission of the taxpayer’s written opinion, or, if it has not been submitted, upon expiry of the 20-day period. The final administrative act for the corrected assessment of the tax is served on the taxpayer together with the audit report. The taxpayer is then entitled to file an objection within thirty days of the announcement in order to have the file re-examined by the conciliation board in the context of administrative proceedings. If the objection is lodged directly with the administrative court (i.e. without the conciliation procedure) against the administrative act issued by the tax administration, it must again be rejected as inadmissible.
Tax exemptions
9. Who is exempt from real estate transfer tax for the acquisition of the first residence?
The tax exemption is granted only to natural persons (married or single), provided that they have their permanent residence in Greece or transfer it within two years of acquisition at the latest (Article No. 23, paragraphs 4-5, Law 3943/2011, Government Gazette No. 66 A’/31-3-2011).
The provisions of Article 21 of Law 3842/2010 no longer provide for tax exemption for Greek citizens who are permanently resident abroad at the time of acquisition. In addition, the categories of beneficiaries have been defined as follows:
a) Greek citizens
b) people of Greek origin from Albania, Turkey and countries from the former Soviet Union,
c) citizens of the EU Member States and the European Economic Area,
d) Recognised refugees in accordance with the provisions of Ministerial Decree 96/2008 (Government Gazette No. 152 A), and
e) Citizens of third countries who are entitled to long-term residence in Greece in accordance with the provisions of Ministerial Decree 150/2006 (Government Gazette No. 160 A).
The intention to settle permanently in Greece is not indicated by the fact that the competent authorities issue temporary residence permits to foreigners for special reasons.
Citizens of northern Epirus (Albania) and Turkey, provided they have obtained citizenship of a third country, with the exception of Albanian and Turkish citizenship, are not subject to tax exemption.
The tax exemption is also granted to the owner of an undivided simple property, or to the owner or usufructuary of a condominium or land, who acquires the remaining share, or the usufruct, or simple property in order to become the sole owner of the property, provided that his share does not meet his accommodation needs.
The tax exemption for single persons is also granted in the case of spouses separated by court, provided that a divorce petition or action has been filed at least six months before the purchase of the property and the marriage is dissolved within five (5) months of the conclusion of the purchase.
Owners of hotel complexes, warehouses, offices, industrial plants and generally pure commercial space are entitled to tax exemption. A property designated as a residence according to the building permit or the purchase title is not recognised as commercial space, even if it is used as such.
10. To what extent is the tax exemption granted and can the tax exemption also be granted for auxiliary rooms?
The provisions listed in Article No. 21 of Law 3842/2010 brought the following changes with regard to the subject matter of the tax exemption:
– Cancellation of the tax exemption for the purchase of real estate with a living area of up to 200 sqm, or land entitling the construction of a residential building with an area of up to 200 sqm. (regardless of the purchase price).
-Granting of a tax exemption relating to the marital status and the type of property to be purchased of the beneficiary as follows:
Tax-free limits for the purchase of residential property:
For single persons up to an amount of 200,000 euros,
For single persons with mental or physical disabilities and a GdB of at least 67% up to an amount of 250,000 euros,
For married persons up to an amount of 250,000 euros,
For married persons with mental or physical disabilities and a GdB of at least 67% up to an amount of 275,000 euros.
These amounts increase by 25,000 euros for each of the first two and by 30,000 euros for each additional child.
Tax-free limits for the purchase of a property:
– For single persons up to an amount of 50,000 euros,
– For married persons up to a purchase price of 100,000 euros. This amount increases by 10,000 euros for each of the first two children and by 15,000 euros for each additional child.
If the value of the property exceeds the above tax-free limits, the tax exemption is granted up to the corresponding tax-exempt amount, while real estate transfer tax is payable on the residual value.
In the case of the purchase of a condominium, the tax-free allowance also takes into account the purchase price for a parking space or storage room with an area of up to 20 square meters, provided that they are located on the same property and are purchased with the purchase contract.
The above regulations are applied to the purchase of the first residence. The tax liability comes into force from 23.4.2010.
11. Under what conditions is the tax exemption for the first residence?
a) The buyer or his spouse or minor children may not
* Full ownership, or
* Right of usufruct in a property, or
* a right of residence in one,
who meets the accommodation needs of his family, or
· A full right of ownership of a buildable plot of land or a co-ownership share in a plot of land to which a building area corresponds that meets its accommodation needs, and
· it is located in a municipal or local municipality with over 3000 inhabitants.
It should be noted that in order to verify the fulfilment of the requirements for tax exemption with taxation from 20.3.2013, the number of inhabitants of the municipal or local municipality (not the unified large municipality) is used on the basis of the 2011 census (Government Gazette No. 630, Volume B’ / 20-3-2013).
In order to be granted the tax exemption, the acquired land or the area on which the purchased residential property is located must also be buildable and located within the approved urban plan of the municipality. There must be no first-order relationship between the buyer and seller.
The requirements for granting the tax exemption must be met in the person of the buyer.
b) The accommodation needs of the buyer and his family are considered to be fulfilled if the pure living space (without ancillary rooms) is 70 sqm. This area increases by 20 square meters for each of the first two children, and by another 25 square meters for each additional children. The accommodation needs of the purchaser with a degree of disability of at least 67% will be increased from 70 square meters to 90 square meters (article no. 16, paragraph 14, Law 3522/2006).
c) The tax exemption is granted on the condition that the property remains in the possession of the buyer for at least 5 years (holding period).
12. Abolition of the tax exemption – penalties
The penalties provided for in Article 1, paragraphs 7 and 8 of Law 1078/1980 differ as follows:
A. Penalties in the event that the beneficiary has lawfully obtained the exemption, but has not complied with the legal provisions on preservation (transfer, creation of a right in rem within five years, Article No. 1, paragraph 7).
B. Penalties imposed on beneficiaries who have applied for and obtained a tax exemption for their first residence without meeting the legal requirements.
A. Sanctions under case A – transfer of the property within 5 years.
If the real estate is transferred by means of a legal transaction between living persons or a right in rem is created in it, with the exception of a mortgage, before the expiry of the five-year holding period, the transferor or founder of the right in rem is obliged to file a tax return and pay the corresponding real estate transfer tax before the transfer or establishment.
The calculated value of the property corresponds to the value existing at the time of the new transfer or creation of the right in rem, or the stated transfer value, if it is higher than the standard value. The tax is calculated in accordance with the tax rates applicable to the granting of the tax exemption.
It should be noted that if a tax exemption is granted to both spouses in the case of the purchase of an undivided property, the tax exemption granted will be cancelled if the share of one spouse is transferred to a third party within the five-year term, and the tax due on this share must be paid.
b) If the buyer does not settle permanently in Greece within two years from the date of acquisition, he must file a tax return and pay the tax due within six months of the expiry of the two-year period. The value of the property at the time of filing the tax return is used to calculate the tax (Article 23, paragraphs 4-5, Law 3943/2011).
B. Penalties in the event of non-compliance with the conditions for a tax exemption.
If, after an inspection by the tax authority, it is determined that the conditions for granting a tax exemption were not met, an administrative act on the corrected tax assessment will be issued and the tax exemption granted will be revoked. The applicable tax is calculated at the property value and tax rate in effect at the time of the violation. Exceptionally, the calculation is made at the time of the tax exemption if the property value and the resulting tax is higher at that time.
13. Conditions for granting a second exemption
The real estate transfer tax exemption for the acquisition of residential property or land is granted once.
A tax exemption is granted for each purchase of a new vehicle, provided that:
(a) the immovable property owned by the purchaser, his spouse or minor children does not meet the family’s accommodation needs at the time of the new purchase, and
b) the buyer submits the corresponding tax return and pays the tax due on the value of the property in a lump sum.
If the value of the property corresponds to the value in force at the time of the new exemption, the tax is calculated on the basis of the tax rates in force at the time of the first exemption granted.
The tax exemption is also granted to persons who have received an exemption from real estate transfer tax for the acquisition of residential property, provided that this was granted by 14.7.1980. In addition, the tax exemption is granted to persons who were entitled to the exemption from inheritance tax or tax on a parental gift for the acquisition of their first residence, provided that they meet the conditions for tax exemption and the corresponding tax is paid.
14. What documents must be submitted to grant the tax exemption for the first residence and when must this be done?
The documents required to grant the exemption from real estate transfer tax for the first residence are submitted together with the real estate transfer tax return before the final contract is signed.
The documents for determining the conditions for the tax exemption are adopted by the decision of the Minister of Finance published in the Government Gazette no. 1021 B’/30-6-2010.
15. What tax exemptions are farmers entitled to?
The provisions listed in Article No. 8 (first paragraph) of Law 3220/2004 provide for a total exemption from real estate transfer tax for the purchase or exchange of agricultural land or fodder land for all farmers (young farmers or farmers over 40 years of age), in accordance with the provisions of Law 634/1977 or Law 2520/1997, without any limitation (upper limit) on the value or area of agricultural real estate.
16. Is there a tax exemption for the purchase of a condominium or land when foreign currency is imported?
As of 28.12.2000 and in accordance with the provisions of Law 2873/2000, this grant has been revoked.
17. When does the state law on the imposition of real estate transfer tax become time-barred?
For cases in which the tax liability arose by 31.12.2013, the state’s right to impose real estate transfer tax expires after the expiry of a five-year period starting at the end of the year in which the filing deadline expires.
Furthermore, after the expiry of fifteen years from the end of the year in which the tax exemption was granted, even if the case has been definitively closed.
In cases where the tax liability arose from 1 January 2014, the tax administration may issue an administrative act on the basis of an estimate or corrected tax assessment within five years from the end of the year in which the deadline for filing the return expires.
