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Holding Greek real estate through a Cyprus holding company and Greek property companies: the case for a layered structure
Quick answer
For a non-resident investor acquiring one or more high-value villas in Greece for mixed personal and rental use, a structure of one Greek property company per villa, each wholly owned by a Cyprus holding company owned by the investor, is generally the most tax-efficient and flexible model. It ring-fences each asset, qualifies for exemption from the 15% Special Real Estate Tax, taxes rental profit at 22% with full expense deduction and 4% depreciation, allows input VAT recovery on a short-term rental business, repatriates profits to Cyprus free of Greek withholding tax, and preserves a tax-efficient share-sale exit for each villa separately. Direct personal ownership is simpler and avoids SRET exposure, but loses most of these advantages once the properties generate meaningful rental income.
The scenario
A typical fact pattern: a non-Greek-resident individual reserves two luxury villas under development from a Greek developer, with final deeds expected on issue of the building permits and delivery some years later. The family will use the villas for part of the year; otherwise they will be let short- and long-term, with the developer acting as exclusive rental operator. The investor wants to keep open the option of selling one villa on completion or later. The question is whether to buy personally or through companies, and if through companies, how to layer them.
The recommended structure
- Shareholder: the individual investor, holding 100% of the Cyprus holding company.
- Cyprus HoldCo: a Cyprus tax resident company holding 100% of each Greek property company.
- Greek PropCo 1 and PropCo 2: Greek companies, typically Private Companies (IKE), each holding legal title to one villa.
The Cyprus HoldCo sits between the investor and the Greek assets as the central holding and financing vehicle.
Why a company at all
At acquisition the choice makes little difference: the same notarial process, the same 3.09% transfer tax or VAT suspension analysis, the same costs. The case for corporate ownership is built in the holding, rental and exit phases.
Rental income at 22% rather than up to 45%. Individual rental income is taxed at 15% to 45% with a flat 5% expense allowance. A Greek PropCo pays 22% on net profit after deducting management and agency fees, maintenance, insurance, professional fees, utilities and financing costs, and after 4% annual depreciation of the building. For villas with substantial rental income and running costs the saving is material.
Input VAT recovery. A company carrying on short-term rental is a VATable accommodation business at 13% from the first property. The compliance burden is real, but so is the ability to recover 24% VAT on operating and refurbishment costs that an individual owner would simply absorb. Where a purchase is made under the VAT suspension regime at 3.09% transfer tax, recovery matters for ongoing costs; where it is not, recovery of VAT on the purchase price itself becomes a decisive factor.
Clean profit repatriation. Dividends from each Greek PropCo to the Cyprus HoldCo are exempt from Greek withholding tax under the Parent-Subsidiary Directive once the 10% participation has been held for 24 months, or earlier with a bank guarantee. Profits are taxed once in Greece at 22% and then accumulate in Cyprus, with the timing of distribution to the individual left to separate planning.
Why one company per villa
Asset separation. Liabilities, claims and financing connected with one villa stay within its own PropCo and do not reach the other villa. Shareholder liability is limited to the capital contributed to each company.
Independent financing. Each PropCo can borrow on its own security package, so the lender to one villa has no recourse to the other. Interest is deductible subject to the interest limitation and transfer pricing rules, and interest paid to the Cyprus HoldCo can be exempt from Greek withholding tax under the Interest and Royalties Directive. If a PropCo is incorporated as an SA, bond loan financing adds further flexibility, including exemption from Digital Transaction Duty. Equity injections into a Greek PropCo bear 0.2% Capital Concentration Tax on share capital increases, though initial capital on incorporation is exempt.
Exit flexibility and buyer appeal. The owner can sell one villa by transferring the shares in its PropCo while the other remains untouched. A buyer acquiring shares avoids 3.09% transfer tax, notarial fees and re-registration, which widens the buyer pool and supports pricing. The Cyprus HoldCo, as a foreign corporate seller without a Greek permanent establishment, is generally not taxed in Greece on the share gain, subject to the Greece–Cyprus treaty. Alternatively the PropCo can still sell the asset itself at 22% on the gain if a buyer prefers an asset deal.
Why a Cyprus holding company
SRET exemption. A Greek PropCo owned through an EU holding company qualifies for the disclosure exemption from the 15% Special Real Estate Tax, provided the ownership chain is transparent up to the individual shareholder and that individual holds a Greek AFM. The Cyprus layer does not prejudice the exemption so long as the disclosure is maintained each year.
Succession and admission of investors. The investor’s interest is represented by shares in one Cyprus company rather than by title to Greek land. Interests can be transferred gradually to family members, or new investors admitted, at holding company level without amending Greek title deeds, Land Registry entries or operating contracts.
Substance. The Parent-Subsidiary exemption is denied to non-genuine arrangements. A Cyprus HoldCo that holds two subsidiaries, centralises financing and serves succession and exit planning has a demonstrable commercial rationale, and that rationale should be documented and reflected in how the company is run.
Where direct ownership still wins
Direct personal ownership avoids incorporation, accounting and corporate maintenance costs, eliminates SRET exposure entirely, and benefits from the current suspension of the 15% capital gains tax on individuals. For a single property used mainly by the family with modest rental income, these advantages may outweigh the corporate benefits. The analysis turns on the expected level of rental income, the scale of deductible costs, the financing plan and the likelihood of a sale.
Annual upkeep of the structure
The structure delivers its benefits only if maintained: ENFIA and E9 filings for each PropCo, SRET disclosure confirmed every year, Short-Term Rental Registry and VAT compliance where applicable, books and financial statements in Greece and Cyprus, and a check of the Parent-Subsidiary and Interest-Royalties conditions before each distribution or interest payment.
Frequently asked questions
Is it better to buy a Greek villa personally or through a company? For a villa let commercially with significant income and costs, a Greek company owned by an EU holding company is usually more efficient. For a mainly personal-use property with little rental income, direct ownership is simpler.
Why Cyprus rather than a Greek holding company? An EU holding company outside Greece allows a share sale of the Greek PropCo to be realised without Greek tax on the gain, subject to treaty, while still qualifying for the SRET disclosure exemption and the dividend withholding exemption.
Does the Cyprus company pay the 15% Special Real Estate Tax? No, provided the ownership is disclosed down to the individual shareholder and that individual holds a Greek AFM.
Can I sell just one villa if both are in the structure? Yes. Each villa sits in its own PropCo, so the shares of one company can be sold without affecting the other.
* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.