JT Law Sydney offices (in 2010)

Real estate property implies the healthy financial status of the tax payer and is subject to taxation in most countries. Until recently, Greek real estate property taxation, was imposed mainly on the conveyance of properties and not on the property itself. This was considered unfair and a symptom of a less developed country. Upon these negative critiques, therefore, an attempt to decrease the conveyance taxes and almost abolish the inheritance tax and tax on Parental Gifts in Greece occurred. As an offset to this abolishment of taxation, in the beginning of the year 2008, a new Greek real estate taxation has been imposed that natural persons or legal entities are in possession in Greece, i.e. the annual Greek real estate fee.

Such a fee is an annual real estate tax, which is imposed on real estate property, that natural persons or legal entities are in possession in Greece on January 1, 2008 and for each year. For the implementation of this law, as real estate property is considered every right of full ownership; of bare/"naked" ownership (remainder); of life estate right on real estate property, even rights of exclusive occupation on jointly owned parts of the basement, of the "pilotis" or of the rooftop; or to the unbuilt section of the building, which is used as parking space, auxiliary space or as a swimming pool.

Subject to taxation is every natural person or legal entity regardless of its citizenship, residence or seat, that is in possession of real estate property rights within Greece on January 1 of each year, regardless of the changes on the property status, which will occur within the same year.

The annual real estate fee is estimated on the value that the properties or the real estate property rights have on January 1 of the year of taxation. In areas where the "objective" tax estimation system is in effect, the fee is imposed on the objective tax value in Greece the properties have according to this tax system. The value is estimated according to the values that the Greek Ministry provides, and according to the specific documents for estimating the objective tax value In case that the objective tax system is not in effect for the specific area, the value is estimated on the market value of the property.

The Greek real estate taxation of each person is taxed separately. Competent Tax authority for the submission of the statements and the tax imposition, is the Tax authority where the tax payer files his income tax statements. For natural persons, information for real estate properties that each person has, is provided by the E-9 tax statements, which are filled jointly with the annual Income tax statements, declaring the annual changes on the property status.

The annual real estate fee which is imposed on the value of the Greek real estate property, arises to the percentage of 0.1% for natural persons and to 0.6% for legal entities. However, the fee which corresponds on the value of the buildings cannot be less than 1 € per sq.m., with the exemption of auxiliary spaces and semi-built buildings.

Greek taxation law provides for several exemptions from the imposition of an annual fee, mainly but not limited to: plots outside the urban plan, on which natural persons have rights of full or naked ownership, forests and private forests, real estate properties which belong to the Greek State, to Greek Municipalities, properties which belong to Foreign Countries, churches and monasteries of known religions according to article 13 of the Greek Constitution, buildings for which a permit for demolition has been issued, etc… Additionally, there is an exemption for real estate properties of natural persons for properties used as primary residence of the tax payer, for residences up to 200 sq.m. and whose value does not exceed the €300,000. This exemption is not provided to foreign residents .

Payment of the fee is effected in up to three bimonthly instalments, depending on the time that the fee was imposed. An exemption from the above applies, in case the total fee for the tax payer and his spouse does not exceed the amount of €250. In cases of lack of filing statements for the annual fee, of false statements or of overdue filing, the Tax authority may impose additional taxes or penalties.

The prior payment of annual Greek real estate fee is necessary for any conveyance deed. According to the provisions of the law, the execution of a Notary Deed is prohibited, without attaching to the Deed, the relevant certificate that the fee, which correspond to the specific property has been paid in full.

Until today, many problems have been encountered by the Greek Ministry of Economics, for the issuance of the tax notices and the forwarding of the notices to the tax payers for receiving payment of the annual Greek real estate fee, before the end of the year 2008. It is true that, until December 2008, a very few notices have been sent to the tax payers.

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John Tripidakis
Telephone: 0402 751 102
Facsimile: 02 8255 8395
mail@greeklawyers.com.au

Sydney
JT Law
Suite 5, Level 12,
53 Martin Place,
Sydney, NSW 2000

Melbourne
JT Law Melbourne Offices
207 Montague Street,
South Melbourne, VIC 3205

John Tripidakis & Associates Athens
38 Tataki Street,
Glyfada 166 75