Municipal Real Estate Tax
- What is the Municipal Real Estate Tax ?
The Municipal Real Estate Tax (in Greek “Telos Akinitis Periousias” or TAP) is a municipal obligation, a fixed small amount which is paid to the municipality that the real estate is located. Every real estate owner owes this amount to the Local Authority to which his/her real estate is located. However, in practice these fees are collected by the municipalities through the electricity bills, together with the Municipal Fees and the remaining Municipal Taxes. Real estate ownership is further subject to (national) real estate tax.
- How is the Municipal Real Estate Tax calculated?
Since January 1st, 1993, a fee is imposed in favor of municipalities and communities, calculated on the value of real estate located within their administrative district as following:
- a) In all types of real estate located within an approved urban planning zone or within the limits of settlements existing before the year 1923 or within the limits of settlements with a population of less than two thousand (2,000) inhabitants.
- b) In any kind of building located outside the approved urban planning zone or outside the boundaries of settlements existing before the year 1923 or outside the boundaries of settlements with a population of less than two thousand (2,000) inhabitants.
The calculation of the Municipal Real Estate Tax depends on various parameters, in particular:
- The acreage of the real estate. For this reason, the owners must correctly declare the sq. m. of the property, otherwise, in case of transfer they will be asked to pay retroactively any larger amount.
- The rate of obsolescence of the real estate, determined by the Ministry of Finance depending on the year of construction.
- The zone price, which is also determined by the Ministry of Finance depending on the location of each building.
- The Municipal Real Estate Tax Coefficient, defined by a decision of each municipality. It ranges from 0.25 – 0.35 ‰ and it is a uniform coefficient for the entire administrative district of each municipality.
It is worth noting that the Municipal Real Estate Tax for each real estate is issued annually. However, Public Power Corporation of Greece collects the amount in equal installments through the electricity consumption bills during the year.
- Who owes the Municipal Real Estate Tax?
The Municipal Real Estate Tax is borne by the January 1st of each year owner of the real estate, and in case of usufruct or possession by the usufructuary or possessor respectively. Therefore, in case of lease of the real estate, the obligation of the payment of the Municipal Real Estate Tax is borne by the owner of the real estate and not the lessee.
For the calculation of the Municipal Real Estate Tax, all of the real estate (inside and outside the urban planning zone) that belong to the same taxpayer and are located within the administrative district of the municipality or community are taken into account.
The owner or usufructuary or possessor of real estate must submit a declaration for the real estate in which the data of the initial declaration have changed, within two months from the change (eg in case of addition-acquisition of a building, transfer-removal of a building, etc).
- Which real estates are charged a Municipal Real Estate Tax?
Real estate owners are required to pay the Municipal Real Estate Tax corresponding to their property. Virtually all real estate properties are submitted at the fee of real estate.
Indicative examples of exemption from the Municipal Real Estate Tax that are worth noting are the following:
- Buildings under construction, for a period of seven years from the issuance of a construction permit or until they are rented or used in any other way before the expiry of the seven-year period.
- The common areas of the apartment buildings.
- Historical / archaeological or religious buildings and real estate belonging to the Greek State, to municipalities or to charitable institutions
- Certificate of TAP in the transfer of real estate
In order to complete a real estate transfer, a certificate of non-debt of Municipal Real Estate Tax is required. This certificate is issued by the Municipality in which the property is located.
From the pandemic onwards, this process is completed electronically.
However, it is noted that from the time of the application for a certificate of non-debt of Municipal Real Estate Tax until its receipt, can mediate more than a month, which causes delays and general difficulties in the transfer of real estate.
For this reason, the certificate of Municipal Real Estate Tax in real estate contracts is expected to be abolished in 2022.
* 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.