A significant relief and a new boost to the market and the business world comes with a legislative amendment promoted by the Minister of National Economy and Finance, Kyriakos Pierrakakis. The aim is to resolve a long-standing issue affecting thousands of shareholders, company members, and executives who, as jointly liable parties for company debts, have seen their personal assets “frozen” by the tax administration—even when those company debts are under arrangement and being regularly repaid.

According to the new legal provision revealed by Proto Thema, all managers, directors, shareholders, and company members will now be able to sell or donate their personal real estate—such as through parental donations—even if the company they are linked to owes money to the state. Although these individuals are legally jointly liable for these debts, they will now be eligible to receive a tax clearance certificate to transfer their property without any amount being withheld from the proceeds.

This will apply if two conditions are met:

The company must have lawfully regularized all its debts (e.g., VAT obligations), either by including them in a repayment arrangement that is being adhered to, or if the debts are under suspension due to law, a court ruling, or a decision from the Dispute Resolution Directorate of the Independent Authority for Public Revenue (AADE).

The individuals wishing to transfer their personal property must either have no ownership relationship with the company (legal entity), or their participation must be extremely limited (less than 5%).

Solution with “Mortgage”

The regulation will also allow property transfers even when the individuals (e.g., executives or company members) hold more than 5% ownership in companies that owe money to the State.

In these cases, the withholding rate imposed by the State drops dramatically—from 70% down to just 7%, a reduction of up to 90%. However, to secure this, in addition to the company having its debts regularized, the seller will be required to provide another property as collateral. This additional asset must cover the remaining amount (from 7% up to 70%) that is not withheld during the sale.

Parental Donations – Gifts

This intervention will also apply to those trapped by company debts as jointly liable persons, but who are not selling for profit—such as when a manager or CEO wants to donate a property to their children. In such cases, the transfer will be permitted, provided that the transferred property is mortgaged in favor of the State.

In other words, the very property being transferred can serve as collateral, ensuring that even after changing ownership, the State can still recover any debts if the company stops adhering to its repayment arrangement or loses the legal suspension of its debts.

What the Regulation Will Include

The provision will be added to Article 12 of the Tax Procedure Code (Law 5104/2024) and redefines the terms for issuing a tax clearance certificate for property transfers or the establishment of property rights. It effectively frees shareholders and current/former company executives from being held “hostage” over corporate debts owed to the State.

The new regulation, as designed by AADE head Giorgos Pitsilis, will provide:

Full exemption for minority shareholders, company members, or executives who either have no ownership connection to the company or have a very limited stake (up to 5%).

Specifically, it will state:

“In cases where a tax clearance certificate is requested for the transfer of real estate or the establishment of a property right over it, the debts legally registered and lawfully settled by the legal entity shall not be taken into account for the jointly liable individual requesting the certificate, provided that during the last two years of their tenure, they did not hold more than a five percent (5%) stake in the ownership or corporate structure of the legal entity.”

Reduced Withholding

In other words, the tax administration will consider only the settled debts (not merely confirmed debts) of a company (legal entity or organization) when a natural person, who is jointly liable for those debts, requests a tax clearance certificate to transfer a personal real estate property. This will apply provided that the individual did not hold more than 5% (including direct or indirect holdings of their spouse, civil partner, or close relatives up to the second degree) of the shares or ownership interests in the legal entity during the last two years of their tenure.

Specifically, the provision states that “any kind of participation in the shareholding or ownership structure of the legal entity also includes direct or indirect participation by the spouse, civil partner, or relatives up to the second degree of the jointly liable person.”

Reduced Withholding for Persons with Significant Ownership

If someone holds more than 5% of the shares or ownership in a company, withholding on the property sale price will still be imposed, but at a significantly reduced rate—up to 90% less than the current rate. That means withholding can be as low as 7% instead of up to 70%, as currently applicable.

According to the new provision:

“If the applicant’s participation in the company exceeds 5%, the withholding rate may be reduced to as low as 7% of the sale price, provided that the remaining debt—representing the difference between the withheld amount and what would normally be withheld (70% if debts are under settlement, or 50% if under collection suspension)—is secured through guarantees or liens, such as mortgaging a property free of encumbrances.”

So, to benefit from this reduction, the individual must provide collateral, such as a mortgage on another property, to guarantee the “remaining debt” — i.e., the difference between the reduced withholding (e.g. 7%) and what would have otherwise been withheld (e.g. 70% or 50%).

In this case, the value of the collateral provided by the shareholder or partner is calculated at 80% of the objective market value of the property offered as security:

“For the calculation of the real security, 80% of the objective value of the pledged property is taken into account.”

Protection After Departure

If a manager or board member sells property and uses another property as collateral while the company is complying with its debt arrangement, and later leaves the company, and the new company management defaults, they will not be held liable for future defaults. That means they won’t face claims against their personal assets for debts that became overdue after they ceased to be involved with the company (as per Article 49 of Law 5104).

End of the “Hostage” Situation

Until now, natural persons such as shareholders (regardless of ownership percentage), board members, managers, presidents, CEOs, and sometimes even their spouses or close relatives, faced serious consequences when attempting to transfer personal real estate.

They were jointly liable with the company for its public debts (tax, insurance, etc.). As a result, the state could target their personal assets to satisfy claims, even if the company was servicing its debts through a valid arrangement.

Practically, any property transfer or real right registration required a tax clearance certificate — and obtaining that was often extremely difficult. To ensure tax collection, the state blocked the transfer of personal property owned by those jointly responsible.

This meant that even someone with a minor stake in a business—like a café owner or a one-time board member—could face withholding of a significant part or even all of the proceeds from selling personal real estate. Sometimes, especially for transfers without consideration (e.g. gifts), issuing a clearance certificate was nearly impossible, effectively blocking the transaction.

This created distortions and injustices in the market. Individuals without real control over company finances—or who had left the company years ago—were trapped, unable to manage their personal assets. The threat negatively affected personal finances and discouraged many from assuming managerial roles or becoming shareholders.

These strict measures were introduced during the financial crisis to prevent mass transfers of assets to family members or third parties (sometimes “straw men” or individuals willing to face arrest) to avoid seizure by the state.