Corporate entities are liable to a 15% real property tax in Greece if they own the property. However, there are some exceptions from this rule. The Administrative Code lists the exceptional cases. We discuss some nuances of the Greek fiscal system in the text below.
Special property tax in Greece
Property owners in Greece can be divided into two classes with each class being subject to taxation at different rates:
Natural persons who own real property in Greece and use it for living, renting, or as an investment object.
Legal (corporate) entities that own real property in Greece and use it for the purposes of investment, restoration, construction, and other purposes.
All physical and legal entities in Greece shall file yearly tax returns and pay taxes. The income from rental property obtained by a private owner is taxed at 15% if it does not exceed 12,000 euros per year. If the income is between 12,000 and 35,000 euros, the tax rate is 35%. If the income exceeds the said amount, the tax rate is 45%.
Physical entities owning property in Greece for commercial purposes are taxed at 22% of the yearly income if it does not exceed 22,000 euros. If the income is between 22,000 and 40,000 euros, the tax rate is 37%. If the income exceeds the said amount, the tax rate is 45%. These tax rates are applicable to private entrepreneurs acting in their own names. These can be tourist facility owners, for example. In addition, they have to obtain special licenses that authorize them to engage in this sort of commercial activities.
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Corporations registered in Greece are taxed on their profits obtained both at home and abroad. Foreign companies pay taxes only on the profits obtained in Greece. The corporate tax rate is 26% of the company profit. If the company owns real property and lets it on a lease, it is deemed company profit. A resident company in Greece also has to pay a 15% tax on dividends and other means of profit distribution.
The company is not subject to the dividend tax if one of the following conditions holds:
- The distributing company or the dividend accepter is covered by the 2011/96 / EU Directive on parent and subsidiary companies, is registered in an EU state, and is taxes in accordance with the aforementioned Directive;
- The accepter owns 10% of the company capital, shares, voting rights, or company profits.
The participation period has to be at least twenty-four months if these exemptions are to become applicable.
Unified property tax in Greece
All entities – physical or legal – owning property in Greece are subject to a unified property tax. The taxable base is the worth of the property as of January 1, each year. The amount is determined by the tax authorities in Greece. The tax includes two payments: the so-called primary tax and the secondary tax.
The primary tax rate depends on several factors such as the property floor space, the price range, the story, the age of the building, the type of the façade, and other factors.
The secondary tax rate is uniform for all legal entities in Greece and it is 0.55% of the property worth. If the property is used for production or any kind of commercial activities, the tax rate is 0.1%. As far as private owners of real property are concerned, their property becomes subject to the secondary property tax if its worth exceeds 200,000 euros. The secondary property tax is payable at the following rates:
|Property worth, euros||Tax rate|
|Up to 200 000||0.0%|
|200,000+ — 250,000||0.10%|
|250,000+ — 300,000||0.15%|
|300,000+ — 400,000||0.30%|
|400,000+ — 500,000||0.50%|
|500,000+ — 600,000||0.60%|
|600,000+ — 700,000||0.80%|
|700,000+ — 800,000||0.90%|
|800,000+ — 900,000||1.00%|
|900,000+ — 1,000,000||1.05%|
|1,000,000+ — 2000,000||1.10%|
Special property tax in Greece: exemptions
In accordance with the Greek legislation number 3091/2002, all legal entities that own property in the country have to pay a yearly special property tax at the rate of 15% of the property worth. The legislation, however, specifies exceptional cases when companies can be exempted from this tax. These exceptions are usually attributable to the type of activities that the company is engaged in. The following types of companies are exempted from the special property tax in Greece:
- Companies engaged in manufacturing, handcraft, or service activities while making a profit that does not exceed the profit the gross income obtained from the property ownership;
- Companies engaged in social security activities, insurance or investments;
- Companies working in the social, educational, cultural, and religious spheres;
- Companies with the controlling stake in the hands of the state;
- Companies renting property to navigation companies and navigation companies owning property;
- Companies listed on the stock exchange.
Some other types of companies are also eligible for special property tax exemption in Greece.
The Greek fiscal authorities published an Administrative Coda in April 2021 that describes the cases when the special property tax on legal entities is not applicable. This document provides guidelines for both the fiscal officers and the taxpayers in Greece. The corresponding legislation went into effect even earlier, in January 2021.
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What property taxes are payable by corporate entities in Greece?
A legal entity owning real property in Greece has to pay the following property taxes: 0.55% of the property worth, 0.025% to 0.035% as the municipal property tax, and 15% as the special property tax. The rate of the tax on the income derived from rent depends on the recipient of the income (physical or legal entity). It can vary between 15% and 45%.
What types of organizations are exempted from the special property tax in Greece?
Companies engaged in manufacturing, handcraft, or service activities while making a profit that does not exceed the gross income obtained from the property ownership; ship owning companies and those working in the social, educational, cultural, and religious spheres.
How can a foreign national purchase real property in Greece?
Several Government programs administer the sales of real property in Greece to foreign individuals. Some of these programs offer very tempting advantages. We recommend that you contact InternationalWealth experts by email email@example.com and request more detailed information about the process of purchasing real property in Greece and gaining access to various benefits.