The transfer of real estate is a complex process, accompanied by strict tax rules, but also significant exemptions for certain categories of taxpayers. In order to better serve citizens and professionals, the Independent Public Revenue Authority (Independent Public Revenue Authority) has codified the legislation on the transfer of real estate, as a tool to better serve citizens and professionals.

The codification covers all amendments to the legal framework since the original publication of the a.n. 1521/1950 up to Law no. 5142/2024 (Α’ 158). This initiative is part of the AADE’s Strategic Plan for 2024, with the aim of facilitating the application of tax procedures by natural and legal persons, as well as by professionals such as notaries, lawyers, and employees of land registries and land registry offices.

Taxes on Real Estate Transfers

The main tax imposed is the Transfer Tax on Real Estate Transfers (TTT). This tax is calculated on the taxable value of the property, which can be either objective or market value, as the case may be. The taxable value is defined as the value of the property on the day of its transfer.

In the case of transfers involving ideal shares of land, the presumption of transfer of a completed apartment applies if a plan for a multi-family building has been or is to be approved. In cases of consideration, the tax is calculated only on the value of the land granted to the developer, regardless of the buildings erected.

Examples

1. Purchase of a first home: A couple buys their first home worth €150,000. As long as they meet the income and other criteria, they will be exempt from FMA for this amount.

2. Counter-allotment: In the case of a counter-allotment of land, where the landowner receives 3 apartments and the developer retains the rest, the tax is calculated on the value of the percentage of the land granted to the developer.

3. Timely filing: If a transfer deed is not filed with the tax authorities on time, the buyer will be liable for surcharges on the tax.

Exemptions from FMA

The main cases of exemption from FMA include:

1. First Home: The purchase of a first home is exempt from FMA, provided that the value of the home does not exceed the specified limits. For a single person, the limit is 200,000 euros, while for a married person, it is 250,000 euros, plus 25,000 euros for each dependent child.

2. Repeat Contract: No tax is imposed on repeat contracts drawn up between the same parties, provided there is no change in the taxable value of the property.

3. Area Corrections: No tax is levied when the area difference does not exceed 2% of the recorded area in the original contract and the value of this difference does not exceed 1,500 euros.

Practical Examples

1. Exemption for Purchase of First Home: An unmarried buyer acquires his first home worth EUR 180,000. According to the legislation, the exemption limit for an unmarried person is 200,000 euros. Therefore, the buyer does not pay FMA as the value of the property is within the limit. If the value of the house was 220,000 euros, the buyer would only pay tax on the amount exceeding the threshold (220,000 – 200,000 = 20,000 euros), i.e. 20,000 × 3% = 600 euros.

2. Repeat Contract Exemption: A property is sold between two identical parties for the second time, with no change in the taxable value. In the original contract, the taxable value was declared at 150,000 euros and the corresponding FMA was paid. In the repeat contract for the same property, if the property elements (e.g. area or value) do not change, no new tax is levied. The buyer and the seller are not obliged to pay any further charges.

3. Exemption for Area Corrections: A property described in a contract is originally declared with an area of 100 sq m, but a later survey (e.g., through a surveyor) reveals that the actual area is 102 sq m. This difference (2 sq m) constitutes 2% of the original area. As long as the value of this 2 m2 does not exceed the monetary threshold of EUR 1 500, the buyer is not obliged to pay additional tax. If the difference in the area was greater (e.g. 105 sq m) or if the value of the difference exceeded 1,500 euros, the tax would be levied on the additional area.

Fines and Penalties

Failure to comply with tax obligations when transferring real estate is accompanied by severe penalties and fines. The main types of fines include:

1. Inaccurate Declaration: If less than the actual value is declared, a fine corresponding to 50% of the difference between the tax due and the tax paid is imposed.

The amount of the tax paid is 50% of the amount of the tax due.
2. Failure to submit a tax return: If a tax return is not submitted, a fine is imposed, starting at 100 euros for minor infringements and reaching up to 100% of the tax due.

From a minimum of 100 % to a maximum of 100 %.
3. Late Submission of Tax Return: For late submission, the fine is 2.5% of the tax for each month of delay, up to a maximum of 50% of the total tax.

The maximum tax is 50% of the total amount of the tax, with a maximum of 50% of the total tax.
4. Late Payment: Late payment of tax is accompanied by a surcharge of 0.73% for each month of delay, with no maximum.

0.0 %.0.0 of the amount of the tax is subject to a maximum limit.
Examples of application

In the case of a property purchase worth 100,000 euros, the transfer tax due is 3,000 euros (at a rate of 3%). If the buyer delays filing the return by six months, he will be charged a fine of 450 euros (6 months × 2.5%). Similarly, if no return is filed at all, the fine may amount to 3,000 euros, i.e. 100% of the tax.

In cases of inaccurate declaration, if the actual value of the property is 150,000 euros and it is declared as 100,000 euros, then an additional tax is imposed for the difference (50,000 euros × 3% = 1,500 euros), while the fine for inaccuracy amounts to 50% of this difference, i.e. 750 euros.