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Taxation

Taxation

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Up to date: 12/31/2013 (Law 4223/2013)

Ownership

Property taxation has increased greatly in recent years in Greece, due to a government effort to accumulate public revenues. However, tax burden related to ownership, is expected to decline in 2014, as some taxes will be abolished, such as EETIDE (Electrified areas fee), and some others will be concentrated in the United Property Tax (EN.F.I.A.).

The principal taxes relating to real estate ownership are:

  • EN.F.I.A. (Annual Property Tax) – effective since 2014

This tax is calculated in accordance with the objective value of the property and some other characteristics such as the property’s age. The objective value constitutes a theoretical price per sq.m., defined by Law, and constitutes the base for tax calculation. Firstly, the basic tax depends on the zone price (objective price) of the property and ranges from 2.00€/sq.m. to 13.00€/sq.m. as the following table shows.

Zone price (€/m2)

Tax category

Basic tax (€/m2)

0-500

1

2.00

501-750

2

2.80

751-1,000

3

2.90

1,001-1,500

4

3.70

1,501-2,000

5

4.50

2,001-2,500

6

6.00

2,501-3,000

7

7.60

3,001-3,500

8

9.20

3,501-4,000

9

9.50

4,001-4,500

10

11.10

4,501-5,000

11

11.30

5,001+

12

13.00

 

At the same time, the basic tax can be increased or declines depending the oldness and the floor of the property, as indicated by the following table.

Oldness

Oldness rate

Floor

Floor rate

Over 100 years old

0.60

Basement

0.98

Built before 1930

0.80

Ground and 1st floor

1.00

Over 26 years old

1.00

2nd and 3rd floor

1.01

20 to 25 years

1.05

4th and 5th

1.02

15 to 19 years

1.10

6th and over

1.03

10 to 14 years

1.15

Detached house

1.02

5 to 9 years

1.20

Up to 4 years old

1.25

 

It should be mentioned that in the case of auxiliary spaces (garage, storage spaces etc.) and partly completed non-electrified buildings, the rates imposed on the basic tax amount to 0.1 and 0.4 respectively.

Concerning the building plots, the legislator defined 25 tax zones according to the objective value per sq.m. of the plot. The above mentioned zones and taxes are presented in the following table.

 

Objective value (€/sq.m.)

Tax

(€/sq.m.)

Objective value (€/sq.m.)

Tax

(€/sq.m.)

0,01-2,00

0.003

400,01-500,00

0.800

2,01-4,00

0.006

500,01-600,00

1.000

4,01-6,00

0.010

600,01-700,00

1.300

6,01-10,00

0.015

700,01-800,00

1.500

10,01-14,00

0.023

800,01-900,00

1.700

14,01-20,00

0.030

900,01-1.000,00

1.900

20,01-50,00

0.060

1.000,01-1.500,00

2.500

50,01-75,00

0.120

1.500,01-2.000,00

3.000

75,01-100,00

0.150

2.000,01-3.000,00

4.000

100,01-150,00

0.200

3.000,01-4.000,00

6.000

150,01-200,00

0.300

4.000,01-5.000,00

7.500

200,01-300,00

0.450

5.000,01+

9.000

300,01-400,00

0.600

 

A rate of 1.08 increases the basic tax if the plot has more than 2 frontages, while a decline rate of 0.80 is multiplied if the plot of land has no frontage. If there is a building in the plot, a tax is imposed only on the difference between the area that could be built and the area that has already been built. For instance, a 500 sq.m. plot with a building factor 0.8 and a residence of 300 sq.m.. The tax is imposed on 100 sq.m. of the whole plot.

Additionally, the parcels and the plots outside the city plan, will be taxed with 0.001€/sq.m. Some adjustments are also realized on basic tax according to the rates included in the table below.

 

Initial basic value (€/sq.m.) – theoretical value

Position factor

Use of land

Use factor

 

0.1-0.49

1.0

Forest

0.1

0.5-0.99

1.1

Sheep run

0.5

1-1.99

1.2

Crops

2.0

2-2.99

1.3

Mines. quarries or residences

5.0

3-4.99

1.5

Outdoor exhibition or parking spaces

8.0

5-6.99

1.7

7-9.99

2.0

10-14.99

2.3

15-19.99

2.5

20+

3.0

Example: 5.000 sq.m. plot outside city plan of initial value 6€/sq.m. with olive trees. Tax paid is 17€.

  • Additional Tax

If the total value of properties exceeds 300.000€, an additional tax is imposed according to the following scale.

 

Scale (€)

Tax rate

0.01-300,000

0.0%

300,000.01-400,000

0.1%

400,000.01-500,000

0.2%

500,000.01-600,000

0.3%

600,000.01-700,000

0.6%

700,000.01-800,000

0.7%

800,000.01-900,000

0.8%

900,000.01-1,000,000

0.9%

Over 1,000,000

1.0%

 

Example: Total assets (properties) value is 532.000€. The tax due is 396€.

  • Revaluation property tax (only for companies- A. 20-27 L. 2065/1992)

The weightings are notified by the relevant Ministry and the final value takes the minimum between updated and objective value both of which are higher than book value of the property, otherwise no accounting treatment is required. If this kind of goodwill is not offset by losses, is taxed by 2% for plots of land and 8% for business buildings.

  • Municipality fees

The amount of such fee is calculated both on buildings and plots and depends on the municipality in which the property is located. The tax is included in Public Power Company’s bill.

  • Imputed income from owner – occupied housing

Moreover, the Tax Authorities assess a minimum imputed income per year, corresponding to the minimum cost of living. This imputed income is calculated at 3% of the objective value of the property. The imputed income gets increased if the taxpayer is a car or a boat owner. Consequently, the tax is imposed on the greater amount between the real income (from salaries. profits etc.) and the theoretical income. It should be mentioned that till now, the imputed income scheme is not applied to individuals spending less than 183 days in Greece. i.e. are not Greek tax residents and they have no income in Greece.

 

Rents

According to new legislation, the rental income is going to be taxed independently of other taxpayer’s revenues. The following table shows the tax rates applied.

Annual rental income

Tax rate

Up to 12,000€

11%

Over 12,000€

33%

Moreover, 55% of the tax due is paid on advance for the next fiscal year and special solidarity levy is imposed on rental income, as the table below shows.

Annual rental income

Solidarity levy rate

0 to 12,000€

0%

12,001 to 20,000€

1%

20,001 to 50,000€

2%

50,001 to 100,000€

3%

Over 100,000€

4%

 

It is noted that rental income does not enter scale in order to calculate the solidarity levy.

Examples:

Rental income 8,000€, tax due 880€, advance tax 484.

Total burden 1,364€.

 

Rental income 25,000€, tax due = 12,000*11%+13,000*33%=5.610€

Tax paid on advance: 5,610*55%=3,085.50€

Special solidarity levy: 25,000*2%=500€

Total burden: 9,195.50€

 

Property transactions

The objective value scheme is also important for the property conveyance. We recall that, according to the objective value scheme, the state determines the lowest property prices for each region, on which various taxes are calculated. Then, the main taxes imposed on property transactions are mentioned.

  • Property Conveyance Tax (FMA)

This tax rate amounts to 3% and is calculated on the objective value. Regarding newly built properties, directly bought from the developer, are liable to 23% VAT and no transfer tax is applied.

  • Capital Gain Tax

The capital gain tax rate is 15% and is calculated on the difference between the selling and purchase price. If the selling price is lower than the acquisition cost, the taxpayer can offset the difference in a future property trade.

The objective value declines due to the impact of inflation and depends on the years that the seller owned the property, as the following table shows.

Holding years

Reduction rate

1 to 5

0.95

5 to 10

0.87

10 to 15

0.79

15 to 20

0.73

20 to 25

0.66

over 25

0.61

 

Inheritance – donation

Inheritance tax is applied to the Greek property depending on the degree of relatives. The following table shows tax brackets for first degree relatives (parental grant, spouses, parents, grandchildren).

 

Brackets of property value €

Tax rates

Taxes per bracket of value

Overall value

Overall tax liability

0-150,000

0%

0

150,000

0

150,000-300,000

1%

1,500

300,000

1,500

300,001-600,000

5%

1,440

600,000

16,500

Over 600,001

10%

1,040

 

The second category includes second degree relatives (uncles. grandparents. brothers).

 

Brackets of property value €

Tax rates

Taxes per bracket of value

Overall value

Overall tax liability

0-30.000

30,000

30,001-70,000

5%

3,500

100,000

3,500

70,001-200,000

10%

20,000

300,000

23,500

Over 200.001

20%

 

The third category includes other relatives and foreigners.

 

Brackets of property value €

 Tax rates

    Taxes per bracket 

Overall value

Overall tax liability

0-6,000

6,000

6,001-66,000

20%

13,200

72,000

13,200

66,001-195,000

30%

58,500

267,000

71,700

Over 195.000

40%

 

The following tables summarize all taxes and charges imposed on properties.

 

Taxes – fees – withheld amounts on property income
1. Rental income tax

11-33%

2. Stamp Duty + OGA (not on housing rents)

3.6%

3. Special solidarity levy on individuals

1-4%

4. Imputed income for own-occupied residence

3%

5. Imputed income for living in owned or leased residence

Depending on sq.m. and zone price

6. Imputed income for own-occupied of commercial properties

11-33%

7. State withholding tax on rents in favor of MTPY

3%

8. Municipal withholding tax on rents in favor of TADKY

2%

 

Annual taxes on property ownership

9. Annual Property Tax imposed on each property’s value (effective for individuals and legal entities)

Buildings: 2.00-13.00€/sq.m.

Plots: 0.003-9.00€/sq.m.

10. Additional tax on total property value (tax free 300.000€)

Indiv.: 0.1%-1%

Firms: 0.25-0.5%

11. Annual Property fee

0.025%-0.035%

12. Annual property tax for offshore companies

15%

13. Revaluation tax (for companies)

Buildings: 8%

Land: 5%

 

Taxes – fees imposed during property conveyance

14. VAT: For purchasing newly built premises

23%

15. Capital gain tax

15%

16. Property transfer tax

3%

17. Sharing tax ( – joining plots)

1.5%

18. Property distribution tax

0.75%

19. Usucaption property tax

3%

20. Fees calculated on property conveyance tax

  • Municipality tax
  • Prefecture tax

3%

7%

21. Fee in favor of Lawyers’ Fund

7.75 ‰

22. Additional contract transcription fee

4.5-7.5‰

 

Inheritance tax / Parental donation tax / Donation property tax

23. Inheritance or Parental donation tax
A’ class: children, grandchildren, spouses, parents

1-10%

B’ class: descendants, brothers, uncles, grandparents etc

5-20%

C’ class: other relatives and outsiders

20-40%

24. Donation immovable property tax
A’ class: grandchildren, spouses, parents

5-20%

B’ class: descendants, brothers, uncles, grandparents etc

10-30%

C’ class: other relatives and outsiders

20-40%

 

Other taxes. fees and levies to municipality and third parties
25. Municipal cleanliness and lighting fee

Depends on municipality

26. Municipal tax for electrified surfaces

Depends on municipality

27. Special fee for renewable energy sources

Depends on kwh

28. Various municipal fees

Depends on municipality

29. Sewerage Fee

Depends on municipality and EYDAP

30. Levy of land or cash payment to enter the city plan (L. 1337/83)

Land up to 60%. cash up to 25%

31. Registration fee in National Cadastre

35€/right to property + 1‰*objective value over 20.000

32. Fee on favor of Public Broadcaster

3€

 

Taxes, Fees & Levies for building license and construction
33. Building license fee

1%*budget

34. Construction works fee

Ruling 1947

35. Withholding in favor of municipality. TEE. TSMEDE

Depends on budget

36. Employer’s levy to pension funds

90%*daily wage

37. VAT on building materials and works

23%

38. Municipal duty for pavement’s usage

Depends on municipality

39. Power supply fee

L.4483/65

40. Fines for illegal buildings

L. 4178/2013