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Annual taxes on property

Iason Skouzos - TaxLaw > Practice Areas  > Real Estate  > Annual taxes on property

Annual taxes on property

All properties in Greece, belonging to individuals or legal entities on the 1st of January of every year, are burdened with the Tax of Real Estate, following the provisions of Law 3842/2010.

The above-mentioned term property includes: a) the right to full and bare ownership, the usufruct and the habitation on a property and b) the right to the exclusive use of parking spaces, auxiliary spaces and swimming pools, that lie at the jointly-owned part of basement, terrace or non-covered buiding space of these properties.
The taxable value of buildings (main and auxiliary spaces) is determined by several factors, such as  the surface, the price zone, the floor, the age of building, the facade, the percentage of ownership and other special circumstances.

The  value of the property which is owned by legal entities is taxed  at a rate of 0.6%, with several exceptions provided.

The total value of over €200.000,00  of the property of each individual is taxed  on scales (from 0.2% up to 2%).

In order to deal with a common phenomenon, where particularly offshore companies, that had acquired a property  in Greece and whose  activity is not part of the normal activity of other companies (such as industrial, commercial, services, etc., with gross income from these activities greater than the gross income from the property), the Greek legislator introduced by Law 3091/2002 the liability of legal entities in general, that have full property rights or bare ownership or usufruct property in Greece, to pay a yearly special property tax (initially 3% on the value of property, which has been recently increased to 15% by Law 3842/2010). The Law provides for many cases of exemption from the obligation to pay the above-mentioned tax, that are related mainly  to the nature of the activity of legal persons. Also, an exemption from this tax obligation is provided for companies that have their headquarters in Greece or another EU country and are usually: a) S.A. companies with registered shares to individual or S.A. companies that indicate the individuals who own their shares,  provided that those individuals have been awarded with a tax registration number in Greece, b) or  companies  with limited liability, if the shares are owned by individuals or if these companies declare the ultimate individuals who are owners of their shares,   provided that these individuals have been awarded with a tax registration number in Greece.

Income from  property rental is not taxed separately, but is included in other income from any other cause and in this way it is taxed  as a total and by scale of income. Gross income from rental property is automatically charged with a percentage of 3.6%  stamp duty (excluding the housing rentals) and  with a percentage of 1.5% additional  tax, which can be increased up to percentage of 3%, in cases of an  income derived from the rental of a residential area of over than 300 sq.m.
Apart from the above-mentioned,  yearly paid taxes, another duty has been imposed by Law 4021/2011, in order to reduce the budget deficit of the State, having created a great controversy already. It is called  “ extraordinary  duty on electrified structured surfaces”  and is determined by the total surface of the property, the zone price and the age of the building.

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