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Taxation on the transfer of property-exemptions

Iason Skouzos - TaxLaw > Practice Areas  > Real Estate  > Taxation on the transfer of property-exemptions

Taxation on the transfer of property-exemptions

As from 01.01.2006 (only for the buildings for which the building permit was issued after that date), a VAT of 23% is imposed on the first sale of newly built buildings by a manufacturer, or by a person who deals professionally with the construction and the  sale of buildings. For all other properties that don’t have the obligation to pay VAT, as above-mentioned, the transfer is charged with real estate transfer tax at a progressive scale (i.e. 8% for a value of property up to 20.000,00 € and  10% on the excess). Exceptionally, the acquisition of a primary residence is exempt from payment of transfer tax if the purchaser or his spouse or a minor child is domiciled in Greece and no one of them is entitled to full ownership or usufruct or habitation in a residence (article 1 of Law 1078/1980, as amended by article 21  of Law 3842/2010).

These provisions apply to contracts for the purchase of property where the purchaser resides in Greece or intends to do so and falls into the following categories of beneficiaries:

a) Greek citizens

b) repatriates from Albania, Turkey and the Fomer Soviet Union

c) Citizens of the Member-States of the European Union

d) Recognised refugees, in accordance with the provisions of Presidential Decree 96/2008 and

e) Third-countries nationals, who enjoy the status of long-term residency in Greece, in accordance with the provisions of Presidential Decree 150/2006.

The above-mentioned tax exemption is granted to an unmarried  individual for  the purchase of a residence of total value up to EUR 200.000,00, including the value of a  parking space and a storage space of 20 sq.m each, under the prerequisite that those spaces are part of the same property and  that they are acquired simultaneously with the same purchase contract,  and for a land purchase of total value   up to EUR 50.000,00. These amounts of exemptions can be increased, depending on the marital status, number of children etc. The exemption is granted provived that the property will not be further transferred by the buyer for a period of at least five (5) years. In case that the purchaser further transfers or establishes any real right – other than mortgage- on the property, before the expitarion of the five (5) years period, then he is obliged, before the new transfer or the stablishment of any real right of the property, to submit before the competent Tax Office a property transfer tax return and pay the relevant tax for which he was initially exempt. In any case, due to frequent changes in taxation of property, it is strongly recommended that all property related taxes and charges are re-estimated before any purchase.

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