Suspended surplus value tax on real estate transactions set for re-imposition next year
A suspended surplus value tax on property transactions is scheduled to resume as of Jan. 1, 2018, a negative development for Greece’s still depressed real estate market.
The re-imposition of the specific tax is included, among others, in the updated third bailout memorandum, which is in effect and will expire in August 2018.
The surplus value tax was suspended in 2014 for at least three years, from 2015 until 2017.
The “highlight” of the soon-to-be re-imposed tax is a 15-percent levy on the profit arising from the original purchase and the subsequent sale. For instance, if a property is purchased for 100,000 euros and subsequently sold for 120,000 euros, then the 15-percent rate is imposed on the difference of 20,000 euros.
The property’s seller is, according to the measure, liable for paying this tax, with the buyer slapped with a transfer fee of 3 percent of the objective tax value of the property, i.e. the basis by which the state levies property taxes annually.
Exceptions to the tax are transactions of property held by the seller before 1995.
Discounts are envisioned in determining the rate for imposing the surplus value tax on a property, based on the number of years a seller owns the latter, reaching up to 60 percent for more than 26 years of ownership.
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