ENFIA dropped 40% for most

The tax burden that goes with the acquisition, possession and utilization of real estate in Greece has diminished considerably in the last few years, but it still has plenty of room for reduction, especially compared to some of the neighboring countries, such as Bulgaria.rou

Industry executives note that a further reduction in tax rates could lead to lower rental costs as it would reduce the burden on landlords, thereby providing the relevant incentive to lower prices. Still, some professionals are more skeptical about the effectiveness of such a move, as it is not certain that a rate reduction would have the desired effect, especially if undeclared income traded in the real estate market is taken into account.

In any case, Greece appears roughly at the European average, in terms of the tax burden on property, after the rationalization in recent years. Although there are still significant issues, such as the structure of the Single Property Tax (ENFIA), which “punishes” those with worth more than 400,000 euros, through the supplementary tax, the picture is much better than some years ago, when Greece taxed significantly the possession as well as the utilization and buying and selling of real estate.

After the recent changes to zone values and tax rates, ENFIA went down by up to 40% for 80% of owners, compared to the previous years. A further tax reduction of 10% is planned if the property is insured against natural disasters.

Greece has now significantly streamlined buying and selling costs, as in the past a transfer tax of 8%-10% of the property’s value was imposed, encouraging tax evasion. Today that has been reduced to 3%, while if it is a first-home purchase there is a tax-free limit of up to €275,000. Therefore, calculating the other costs (e.g. broker’s fee, notary’s fee, registration fee in the cadaster and mortgage registry), the total cost for the purchase and later sale of a property (which is also of interest to foreign investors), is limited to about 8.5% of the property value, compared to 16.45% in Spain, 13% in Germany and 13.6% in Italy. However, in neighboring Bulgaria that rate comes to just 7.7%.