The Transfer Tax In Greece

The Transfer Tax In Greece By Christos ILIOPOULOS* Athens, 28 May 2022 When you buy property in Greece, you need first to strike a verbal agreement with the seller or the real estate agent on the exact price for the property you are to purchase. Then, it is strongly advisable to retain an attorney who will act on your behalf and will be briefed on the details of the transaction, in order to draft, along with the seller’s side, a private agreement which will include all the basic terms for the transaction and possibly the payment of a deposit. The buyer’s attorney will make the detailed title search on the legal history of the property in question and its possible legal burdens, including mortgages and liens, or the absence of them, which usually opens the way for the purchase. One of the main expenses the buyer is undertaking when purchasing real estate property in Greece is the transfer tax, which is estimated on the tax value of the property, or on its market value, if the market value is higher than the tax value. The tax value of a property is estimated according to objective criteria established by the government, while the market value is the price the two parties, seller and buyer, have agreed on. The transfer tax in Greece today is 3% on the tax value (or the market value, if it is higher) and it is paid by the buyer shortly before the signing of the closing deed for the purchase. Only when the transfer tax is paid, according to the brief outline of the purchase deed which has been uploaded by the notary on the tax authority’s site, the certificate that the tax has been paid is issued and the closing deed can be executed at the notary’s office by the seller and the buyer, or their proxies. It is noteworthy that the transfer tax of 3% is applicable on newly constructed properties, as well. A 2006 law which introduced VAT 24% on all new properties has been suspended from 2020 until end of 2022. It is also expected that the suspension of VAT on the purchase of newly built properties will be extended until end of 2024. Finally, it must be pointed out that, if the buyer of the property is a tax resident of Greece, he/she must be able to justify the acquisition of the funds which are paid for the purchase of the property, including those for the payment of the transfer tax, as well as the notary’s fee. The buyer, in other words, must have filed income tax declarations in Greece in the several past years, where the income declared, minus the expense of life each year in Greece, is enough to cover the funds for the purchase of the property. Other ways to justify the funds for the purchase are the previous sale of properties or other assets in the past, or the acceptance of an estate in Greece, which may have included cash or balance of bank accounts. If the buyer is a foreign tax resident, the justification of the acquisition of the funds for the purchase of the property is achieved with the bank documents which prove the import of the money from abroad into a bank account of the buyer in Greece. *Christos ILIOPOULOS, attorney at the Supreme Court of Greece , LL.M. www.greekadvocate.eu e-mail: bm-bioxoi@otenet.gr