Now we highlight the transfer taxes and professional fees, which should be considered when purchasing property in Greece. Transfer tax is payable by the buyer and is calculated on the value of the land. Tax rates are:
7% of property value for transactions up to €15.000; and
9% for transactions over €15.000.
These rates increase by 2% respectively if there is a fire brigade service in the area. There is an additional 3% special tax calculated on the above tax, not the value of the property, in favour of the state municipalities or communities.
Recent legislation has replaced transfer tax with VAT for new buildings. In certain cases VAT is refundable to purchasers who use the property in business.
For purchasers of newly built properties of any nature where the license to build is dated post 2006 VAT is charged at the rate of 19% of the cost of the property (instead of transfer tax). For building licenses dated pre-2006 the purchaser would pay transfer tax, as above, not VAT.
Where a property transaction after 2006 has incurred transfer tax or VAT any subsequent sale is free from both. In addition capital gains tax is now payable by the property seller. On such capital gains there will be a sliding tax rate, starting at 20% for properties owned for less than 5 years reducing to nil for properties owned for more than 25 years.
The buyer pays a 1% tax on all property transactions.
A special property tax may also be payable by non-resident corporations which are not registered in a European Union country and who do not disclose the names of the ultimate individual shareholders. A contract for transfer of ownership of a property must be prepared and attested by a Notary Public. Furthermore, lawyers for both the buyer and seller should attend a public reading of the contract given by the Notary.
The fees payable by law to the above professionals are:
- Notary - 1.2% calculated on the value of the transaction.
- Lawyer - a prescribed fee will be payable starting at 1% for purchases up to €44,020, reducing to 0.01% for properties over €58,694.057.
In conclusion when purchasing property in Greece it is very important to have local knowledge to understand all of the additional statutory charges, which can be considerable and are not easily identified.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.