Navigating Property Taxes in Greece: A Quick Guide for Buyers

Introduction

Buying property in Greece is an exciting investment opportunity, whether for a vacation home, a rental property, or a permanent residence. However, understanding the local property taxes is crucial for avoiding surprises and ensuring a smooth transaction. This quick guide will help buyers navigate the complexities of property taxes in Greece, including tax rates, exemptions, and essential tips to keep in mind when purchasing property.

Why Understanding Property Taxes in Greece is Important

Property taxes in Greece can be different from those in other countries. Whether you’re a first-time buyer or an investor, knowing what to expect will help you make informed decisions and avoid any unforeseen costs.

Understanding the tax landscape can also help you save money, plan better, and stay compliant with Greek tax laws. In this guide, we’ll explore key taxes you need to know as a property buyer in Greece.

Types of Property Taxes in Greece

There are several types of property taxes that property owners in Greece must pay. These taxes vary depending on the property’s value, location, and use. Here are the main property taxes you need to be aware of:

1. Municipal Property Tax (ENFIA)

The Municipal Property Tax, known as ENFIA (ΕΝΦΙΑ), is a tax that every property owner must pay in Greece. This tax is levied annually on all properties, including land and buildings. It is based on the estimated value of the property and can vary depending on its size, location, and usage.

Key Points:

• ENFIA is calculated based on the objective value of the property, which is determined by the Greek tax authorities.

• Both property owners and landowners are subject to ENFIA.

• The tax is paid in one or multiple installments, typically in the summer and winter months.

• There may be exemptions for certain properties, such as those owned by low-income individuals or pensioners.

2. Transfer Tax (Property Purchase Tax)

When you purchase a property in Greece, you are required to pay a property transfer tax. This tax is typically calculated as a percentage of the property’s purchase price or its objective value, whichever is higher.

Key Points:

• The transfer tax is generally set at 3% of the property value.

• This tax is due within 30 days of signing the purchase agreement.

• The transfer tax is payable by the buyer, and it must be settled before the property can be officially registered in your name.

3. VAT on New Properties

If you’re purchasing a brand-new property in Greece, you may be subject to VAT (Value Added Tax). This applies to newly built properties or properties that have never been sold before.

Key Points:

• The VAT rate is generally 24%, but it may be reduced for certain property types.

• VAT is typically included in the price of new homes, and the buyer must pay this tax at the time of purchase.

• There may be exceptions for properties under certain price thresholds or first-time homebuyers.

4. Capital Gains Tax

If you decide to sell your Greek property, you may be subject to capital gains tax on the profit made from the sale. This tax applies to the difference between the sale price and the property’s purchase price.

Key Points:

• Capital gains tax is typically set at 15% of the profit.

• There are exemptions for certain individuals, such as those selling their primary residence.

• The tax is due within 30 days of the property’s sale.

Exemptions and Deductions

Greece offers a range of exemptions and deductions that can help reduce the amount of property tax you owe. Some of these exemptions are designed to make property ownership more affordable, especially for lower-income individuals or families.

1. Primary Residence Exemption

If the property you purchase is your primary residence, you may be eligible for tax exemptions. For example, there are exemptions on capital gains tax for the sale of a primary residence, provided certain conditions are met, such as the duration of ownership and use.

2. Tax Deductions for Renovation Costs

Property owners in Greece can deduct renovation and repair costs from their taxable income. This deduction can significantly lower your tax liability if you are planning to renovate the property.

Key Tips for Property Buyers in Greece

1. Consult a Local Real Estate Agent

It’s essential to work with a local real estate agent who is familiar with the tax laws and property market in Greece. They can help you navigate the complexities of property taxes, identify potential issues, and assist in negotiating the best deal.

For those interested in purchasing property in Corfu or any other region of Greece, Chase Real Estate Corfu offers expert services to guide you through the buying process. Explore our guide for property buyers here.

2. Work with a Tax Advisor

To ensure you are fully compliant with Greek tax laws and take advantage of any exemptions, it is advisable to consult with a tax advisor. They can help you understand your tax obligations and plan accordingly to avoid any surprises.

3. Plan for Ongoing Property Costs

In addition to taxes, there are other ongoing costs associated with owning property in Greece. These include maintenance fees, insurance, and utilities. Make sure to factor these costs into your budget before making a purchase.

How to Reduce Property Tax Costs in Greece

While you can’t avoid property taxes altogether, there are a few strategies you can use to reduce your tax burden:

• Invest in energy-efficient properties: Some properties that meet specific energy efficiency standards may qualify for tax breaks or reduced rates.

• Consider purchasing smaller properties: The larger the property, the higher the tax. A smaller property can reduce both your ENFIA tax and the property transfer tax.

• Look for exemptions: Take advantage of available exemptions, especially for first-time homebuyers or for properties designated as primary residences.

Conclusion

Navigating property taxes in Greece is an important part of the purchasing process. Understanding the various taxes, exemptions, and deductions will help ensure that your property investment remains profitable and compliant with local laws. With careful planning and the help of professionals, you can avoid surprises and make your property purchase in Greece a success.

For expert guidance on purchasing property in Greece and understanding tax obligations, consult Chase Real Estate Corfu. Visit here for more information.