The passing of a new bill to stimulate and retain interest in the real estate market in Greece is imminent and includes the following measures, amongst others.
For conveyances (purchases), the suspension of VAT on newly built structures for another two years. For the three-year period 2020-2022, all structures with building permits issued 1-1-2006 or later but are still in the possession of construction companies which built them or completed them are not subject to a 24% VAT levy on their “objective” (assessed) value when conveyed for the first time for use, provided the construction company has filed applications to suspend the VAT levy. These properties were subject to a 3% transfer tax levy on their objective value or their actual sale price, just as older structures were when conveyed for the second, third, fourth time, etc. With the provision expected to be adopted within the year, the suspension of the 24% VAT will remain in effect for two more years, that is for conveyances of newly built structures that take place in the period 2023-2024. These conveyances will be assessed with just a 3% tax on objective value or the properties’ actual purchase price.
Note that no VAT is levied on the conveyance of a first home, so this adjustment does not apply to these property transfers. Another favourable measure is the suspension of the capital gains tax on conveyance of used properties. The coming into force of provisions levying a 15% capital gains tax on property sold for an amount higher than the original purchase price will be postponed for one or two more years. Based on current law, the provisions of Article 41 of the Income Tax Code (Law 4172/2013) that provide for a 15% tax on the positive difference (capital gains) resulting from the sale of property for an amount higher than the original purchase price have been suspended until 31-12-2022, which means they enter into force starting 1-1-2023. A more recent provision suspends the levy of capital gains tax on property conveyances for another year or another two years. That means the entry into force of the provision under Article 41 of the Income Tax Code will be moved to 1-1-2024 or 1-1-2025. As a result, those who sell real property over the next one or two years will not pay a 15% capital gains tax (on the difference between the original purchase price and the subsequent sales price). As such, property sale prices will not be pushed upward by the levy of this tax.
