A series of tax reliefs for property owners comes into effect from the very first day of 2025, which in many cases are linked to the government’s goal of increasing the supply of housing.

Prominent among the new measures is the income tax exemption for dwellings up to 120 square meters that were vacant or used for short-term rentals. The exemption applies to those who lease their properties under long-term contracts of at least three years. At the same time, a double reduction of ENFIA is provided, reaching 20% for insured properties up to 500,000 euros, encouraging insurance and protection against natural disasters. In addition, the suspension of VAT on new construction until the end of 2025 remains in force, as does the suspension of capital gains tax on transfers until 2026, measures that facilitate market growth and investment.

On the counterpart, a new resilience fee for tourist accommodation is introduced, while restrictions on short-term rentals in areas of Athens seek to balance and sustainably develop the market.

Package of measures

More specifically, the package of measures concerning real estate, starting from January 1, provides for the following:

1. extension of the VAT suspension for new buildings until 31/12/2025. The aim is to stimulate the real estate market and attract investment, while the regulation also works for the benefit of property buyers, including individuals who intend to use the property for private residential use. The 24% VAT was imposed on real estate purchases in 2006 and applies to properties with a building permit from 1 January 2006 onwards, with the exception of the purchase of first homes, while the VAT suspension started in 2020.

2. Extension of the suspension of the imposition of capital gains tax on the transfer of real estate until 31 December 2026. The capital gains tax of 15% on the difference between purchase price and sale price remains frozen for two additional years. Taxpayers who transfer properties by the end of 2026 will not be subject to this tax, thus facilitating liquidity and encouraging more transactions in the real estate market.

3. Permanent exemption from the Tax for rights in rem on listed buildings worth up to €400,000. The measure is aimed at helping owners of listed buildings who incur significant maintenance costs. This category also includes investors from third countries interested in acquiring a Golden Visa in Greece.

4. Income tax exemption for three years for properties that will be rented out and were previously declared as vacant or made available for short term lease.

5. Double reduction of ENFIA from the new year (from 10% to 20%) for residences of individuals, taxable value up to 500,000 euros, insured for natural disasters (fire, earthquake, flood). A condition is that the insurance must relate to the previous year with a duration of at least three months. If the duration of the insurance of the previous subparagraphs is less than one year, the reduction of the ENFIA is adjusted proportionally.

What applies to Airbnb

At the same time, the following changes are coming at the same time with regard to properties rented out with Airbnb:

– Increase in the short-term rental fee. The climate resilience fee is being increased to €2 per night in the winter months and €8 per night in the summer months.

– Stabilisation of short-term rentals. To de-congest the market and contain rents, strict restrictions on short-term rentals are introduced. In the first three municipal districts of Athens, the registration of new properties on Airbnb-type platforms is prohibited.

Property owners should pay attention to the fine print of the law. The tax exemption that applies to income from closed properties or short-term rental properties that are converted to long-term leases comes with strict terms and conditions. Landlords who do not pay attention risk losing the favourable status.

Specifically, the tax exemption provides for zero tax on income from properties leased under long-term leases of at least three years, provided that they are entered into between September 8, 2024 and December 31, 2025. The measure applies to properties with an area of up to 120 square meters and the exemption lasts for 36 months.

However, in order to benefit, one must meet certain conditions. The properties must have been declared as vacant in the tax returns for the years 2022, 2023 and, if the contract is concluded in 2025, 2024. Alternatively, if the property was used for a short-term lease, that use must have been declared to the AADE at least one year before the property was converted to a long-term lease.

All evidence of compliance must come from timely information and income tax returns. For the years 2022 and 2023, the returns must be submitted by the date of publication of the circular, i.e., December 19, 2024. Amending returns submitted afterwards will not be accepted.

Finally, if a property that has been included in the scheme returns to a short-term lease, the exemption is cancelled from the first year of the new lease. If the property is left vacant, the exemption is discontinued as of the year the long-term lease ends.