The different taxes related to residency in Greece

1. Property Tax (ENFIA)

ENFIA is an annual tax paid by homeowners in Greece, calculated on the tax value of the property. In 2024, this tax consists of two parts: a main tax based on the area, location and use of the property, and an additional tax applicable to high-value properties (generally those valued above €250,000). The average ENFIA rate varies between 0.1% and 1.15%, depending on the value of the property and its location. Note that the value is recalculated each year on January 1st.

Calculating ENFIA is very complicated, we advise you to call on the Greek tax authorities, or simply your notary, to help you estimate it.

ENFIA can be paid annually or in five monthly instalments spread over September to January.

2. Land Transfer Tax (TAP)

When buying a home, buyers must pay a land transfer tax, also known as the « Property Transfer Tax ». This duty amounts to 3.09% of the declared value (and not the purchase price) of the property, for old properties or new properties built before 2006.

For properties built after 2006, acquired directly from a builder, a VAT of 24% is applied instead of the transfer tax, unless specific exemptions apply (such as the acquisition as a main residence).

3. Capital gains tax

Currently, no capital gains tax on real estate is applied to sales made until at least 31 December 2024. This measure, introduced by the Greek government in 2020 to support the property market in the face of the pandemic, was initially due to end in 2022, but was later extended for another year.

If the law changes, you will be subject to capital gains tax. This tax only applies to properties that have been held for less than five years. The rate is set at 15% on the capital gains realised, with possible deductions depending on the costs of improvements or investments made on the property.

4. Rental income tax

If you rent out your second home, the income generated is subject to Greek rental income tax. The tax rates in 2024 vary according to the amounts received:

• 15% for annual rental income up to €12,000.
• 35% for income between €12,001 and €35,000.
• 45% for incomes above €35,001.

Owners can deduct certain expenses related to the management of the property (maintenance, repairs, management fees) in order to reduce their tax base.

The tax regime for foreign pensioners

Greece has set up an attractive tax regime for foreign pensioners wishing to settle in the country. To benefit from this scheme, you must:

• Have pension income from abroad.
• Transfer tax residence to Greece (stay more than 183 days per year in Greece).
• Not have been a tax resident in Greece for 5 of the last 6 years prior to the transfer.

Foreign pensioners benefit from a flat rate of 7% on pensions and foreign income. This regime can last up to 15 years.

The High Net Worth Investor Tax Regime (HNWI)

A flat rate of €100,000 per year is applied for high net worth individuals transferring their tax residence to Greece. Investors must prove an investment of at least €500,000 in real estate or other assets in Greece to qualify for this scheme.

Inheritance tax and transfer of property

In Greece, inheritance tax varies depending on the relationship between the deceased and the heir. Children and spouses benefit from a reduced rate (5% to 10%) and significant tax allowances. Foreigners residing in Greece can also draw up a will stating that the inheritance law of their home country applies, thus providing more flexibility in the management of inheritances.

We have written a comprehensive article on the issue of inheritance for foreign owners in Greece.

Other Tax Considerations

VAT on Services

In addition to the VAT applied to the purchase of new property, it is important to note that most services related to the management of your property, such as renovation work or maintenance, are subject to a 24% VAT.

Exemptions for permanent residents

If you become a permanent resident in Greece after several years of residence, some tax exemptions may apply to your main residence, including reductions on ENFIA or reduced tax rates on rental income.

Conclusion

Although the taxation of second homes in Greece may seem complex, it is still relatively favorable compared to other European countries, especially if you plan to invest for the long term. In 2024, Greece continues to offer many attractive opportunities for foreigners wishing to invest in real estate, whether for holidays, rental income or a peaceful retirement. For tax optimization and a better understanding of the legal implications, it is strongly recommended to consult local experts in real estate and taxation.