Housing transactions to continue soaring

Greek property transactions took off in the second half of last year, due to the increase in the taxable rates – known as objective values – from January 1, 2019, and the the growth of investor interest due to the rise of the short-term rental sector.

Independent Authority for Public Revenue data showed 50.5 percent annual growth in property transaction levy takings in July 2018. Revenues froze in August and September, before resuming their ascent in the last quarter of 2018: Takings jumped 70.64 percent in October and 62.5 percent in November. In the first 11 months of 2018 the state collected 308 million euros from the property transaction levy, up 32.2 percent from the January-November 2017 period.

Estate agents and notaries report that property transactions exceeded 25,000 in 2018, reaching pre-crisis levels due to two factors: Firstly, thousands of property owners rushed to pass on some or all of their assets to their children or to set up companies with the aim of paying lower taxes given that in January the new objective values started applying; and, secondly, due to the high demand for small apartments in areas popular with tourists because buyers wanted to list them on platforms such as Airbnb and HomeAway.

The biggest hikes in objective values were in Kolonaki in central Athens, Aghios Nikolaos on Crete, and on the Aegean islands of Myconos and Paros, which saw an increase in all taxes related to property.

The increase in transactions is set to continue this year too, as the Finance Ministry plans to revise the objective values again, because the government pledged to its creditors that it will close at least 50 percent of the gap between taxable rates and market prices in 2019 and attain their full alignment them in 2020.

That means there will also be significant changes to the Single Property Tax (ENFIA) both this year and next. Estate agents expect declines in areas such as Maroussi, Kifissia, Filothei and Papagou, and fresh hikes in districts including Keratsini, Drapetsona and Perama.