Greece has announced plans to substantially increase the property transfer tax paid by certain buyers from outside the European Union and European Economic Area, as part of a wider package of measures aimed at addressing the country’s housing affordability problem.
Under the announced measure, the transfer tax on qualifying residential property purchases would rise from the current 3% to 15%.
The change has been announced by the Greek government but is not the tax currently in force. Buyers considering a property purchase in Greece should therefore distinguish between today’s tax rules and the planned new regime.
What has the Greek government announced?
The current Greek property transfer tax is generally 3% of the taxable value, with an additional municipal levy calculated on the tax.
Under the government’s announced change, a 15% rate would apply to purchases of residential properties by certain individuals connected to third countries.
The measure is specifically aimed at residential property. According to the government’s detailed announcement, it would not apply to purchases of commercial premises, land plots or other types of real estate.
There are also important distinctions regarding which third-country buyers fall within the new regime. These details matter considerably and should be checked before assuming that every non-EU property purchaser will automatically face the higher rate.
Until the new rules are enacted and their final provisions are clear, the existing transfer-tax regime remains relevant for current transactions.
Why is Greece introducing the measure?
The government’s stated objective is to address increasing demand for housing and the resulting pressure on residential property prices and housing accessibility for permanent residents.
Foreign demand has become an increasingly visible part of Greece’s property market following years of strong international investment and the expansion of programmes such as the Golden Visa.
However, the announcement has already triggered debate within the Greek property industry over whether nationality-based taxation addresses the underlying causes of the country’s housing shortage.
What could it mean for international property investors?
The impact will ultimately depend on the final legislation.
For investors from third countries, however, transfer tax could become a much more important consideration when comparing Greece with competing Mediterranean property markets.
This is particularly relevant in the luxury and holiday-home segment, where international purchasers represent an important part of demand and buyers frequently compare Greece with markets such as Italy and Spain.
It could also affect the economics of some Golden Visa investments and residential developments marketed internationally.
For now, investors should avoid treating headlines about a “15% foreign buyer tax” as if the rate that already applies – there is a significant push back from the countries’ experts and key stake holders.
The measure has been announced, but the current property transfer tax remains 3%, and the precise scope, exemptions, implementation timetable and final legislative wording will determine which transactions are ultimately affected.
For anyone planning a Greek property purchase, particularly a third-country national, obtaining current legal and tax advice before completing a transaction will be essential.
This article is for general information only and does not constitute legal, tax or investment advice.
Athens Riviera – where to buy & average property prices
Our take and market experts’ opinion
Measures designed to protect access to affordable housing are understandable. However, applying the same tax disincentive across fundamentally different segments of the residential market raises questions about whether the measure will achieve its intended objective.
Greek law firm Varnavas Law has argued that any increased transfer tax should exclude investments that increase the country’s housing supply, rather than simply transferring an existing home from one owner to another.
A €2 million villa on the Athens Riviera or a luxury residence on a Greek island is not realistically competing with the home an average Greek household is trying to buy. Restricting international demand in this segment therefore does little, in itself, to make ordinary housing more affordable.
It could, however, have another consequence.
Many high-end residential developments in Greece are pre-financed through sales made during the development stage, with international buyers representing an important part of that demand. If acquisition costs for those buyers rise substantially, pre-sales can become more difficult. That can affect the financial viability of the development itself and, ultimately, whether the developer proceeds with the next project.
This creates a potential contradiction. Greece already suffers from a shortage of housing supply. If a measure intended to tackle high property prices makes new residential development more difficult to finance, it could ultimately contribute to the very supply constraint it is intended to address.
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