| Our Services |
| Corfu Investments |
| Rental Listings |
| Corfu and Paxos |
| Our Associates |
| Privacy Policy |
| Contact Us |
| Links |
| Transfer Tax amendments 2006 |
Real Estate Taxation in Greece
The situation following Tax Law amendments effective 1st January, 2006
- Transfer tax and “Objective Valuation”
The actual percentages applicable to transfer tax have not changed. These percentages are applied to a property value so arriving at the tax payable. What has changed is the “value” to which the percentages are applied. Before explaining the changes a brief explanation on the subject of “value” will help.
Attached to each property are two values, one, the commercial value i.e. the value paid by the buyer to the seller and, two, the “Objective Value” which is a value allocated to the property by the Greek tax authorities. Historically the “Objective Value” has always been substantially lower than the commercial value thereby diminishing Government revenue. Of course, any move to increase tax has met with popular resistance, however, over many years the gap between these two values has widened and understandably government has now started to implement phased in amendments.
As from the 1st January, 2006 “Objective Values” have increased by about 30% overall. In some areas it maybe marginally lower whilst in others slightly higher. It is envisaged that over the coming years further adjustments will be made until parity between “Objective” and “Commercial” value is achieved. This amendment means property transfer tax has increased by 30%.
- New Property Tax
Never before as VAT been applied to property transactions. With effect from 1st January, 2006 VAT (currently at 19%) will be imposed on the supply of newly built properties where the construction license has been issued after the 1st January, 2006. At this time there is not complete clarity regarding the basis for the calculation of VAT, therefore clients are advised to get legal advice prior to entering into an agreement.
- Capital Gains Tax.
Capital Gains tax is introduced for the first time. This tax will be imposed on subsequent transfers of property acquired after the 1st January, 2006 regardless as to the method of accusation i.e. by donation, sale or inheritance etc. This tax is payable by the seller and will be calculated on the difference between the original acquisition price and the selling price. The percentage rates of this tax are as follows:-
20% if the sale took place within
5 years of purchase
10% between 5 and 15 years
5% between 15 and 25 years
Nil over 25 years
Note The intention of the new property tax system is to gradually abolish Transfer Tax and replace it with a combination of Capital Gains Tax (payable by the seller) and Transfer Duty levied at 1% of Objective Value (payable by the buyer).
Disclaimer: This information is supplied as guidance only and
Guilford can not be held responsible in any way for inaccuracies of any nature. Please take legal opinion to gain complete clarity.
We are committed to service excellence.
