Capital Taxation

1. Taxation of Inheritances, Donations, Parental Benefits

The taxation of Inheritances, Donations and Parental Benefits is regulated by Law 2961/2001.

According to this law, any individual or legal person who acquires property through death, donation or parental gift is subject to tax.

1.1. Taxation of Property Acquired on Death
Scope of the tax

In the cause of death tax is levied to:

  • any property located in Greece,
  • movable property located abroad and belonging to a Greek citizen, wherever he/she resided during his/her lifetime, unless before his/her death the deceased had been living abroad for at least ten consecutive years,
  • movable property located abroad and belonging to a foreign citizen, if he/she was resident in Greece.
Taxable Person

The person liable to tax is the beneficiary of the acquisition, in the case of several beneficiaries each according to the property acquired.

The beneficiaries of the inheritance, depending on their relationship to the deceased, are classified in three categories A, B and C.

Category A includes:

  • the deceased’s spouse,
  • the person who had entered into a cohabitation agreement with the deceased
  • the first-degree descendants (children by legal marriage, children born out of marriage to the mother, voluntarily or judicially recognized to the father, legalized by a subsequent marriage or judicially recognized to both parents),
  • the second-degree descendants by blood and
  • the first degree ascendants by blood.

Category B includes:

  • the descendants of the third and subsequent degrees of blood,
  • the ascendants by blood of the second and subsequent degrees,
  • the voluntarily or judicially recognised children vis-à-vis the ascendants of the father who recognised them,
  • the descendants of the recognised person vis-à-vis the recognised person and his/her ascendants,
  • brothers and sisters (half-brothers or half-sisters),
  • the third-degree blood relatives by collateral descent,
  • the stepfathers and stepmothers,
  • the children from a previous marriage of the spouse,
  • the children by affinity (sons and daughters-in-law) and
  • the ascendants by affinity (mothers-in-law and fathers-in-law).

Category C includes any other relative of the deceased by blood or affinity or exotic.  

Tax-Free Limits and Tax Rates

The acquisition of all kinds of property on death is subject to tax, calculated according to the following tax scales and depending on the category to which the beneficiary of the acquisition belongs:

For Category A:

Scales (EUR)

Scale rate (%)

Scale tax (EUR)

Taxable property (EUR)

Tax payable (EUR)

150.000

150.000

150.000

1

1.500

300.000

1.500

300.000

5

15.000

600.000

16.500

Excessive amount

10

For Category Β:

Scales (EUR)

Scale rate (%)

Scale tax (EUR)

Taxable property (EUR)

Tax payable (EUR)

30.000

30.000

70.000

5

3.500

100.000

3.500

200.000

10

20.000

300.000

23.500

Excessive amount

20

For Category C:

Scales (EUR)

Scale rate (%)

Scale tax (EUR)

Taxable property (EUR)

Tax payable (EUR)

6.000

6.000

66.000

20

13.200

72.000

13.200

195.000

30

58.500

267.000

71.700

Excessive amount

40

 
Tax Exemptions

The following tax exemptions apply:  

Acquisitions, if the beneficiaries are the State and foreigners under the condition of reciprocity, if their exemption from tax is provided for by international conventions.

  • The acquisition of ships, shares or shares in companies owning ships of more than one thousand five hundred (1.500) gross tonnage.
  • Money deposits in a bank in an open account in the name of two or more of them jointly, in which an additional condition has been made that on the death of any beneficiary the deposit and the account thereof shall automatically pass to the other survivors up to the last of them. This exemption shall not extend to the heirs of the last remaining beneficiary. The exemption shall apply mutatis mutandis to a share of a mutual fund.
  • The movable property located in a foreign country of a Greek citizen who has been resident there for at least ten (10) consecutive years.
  • The movable property located in a foreign country of a Greek citizen who has been resident in that country for at least twenty (20) consecutive years and has not relocated to Greece at the time of the donation.
  • Assets that had come to the deceased by donation or parental benefit from his/her parents and are inherited by them.
  • The acquisition of assets, up to the amount of four hundred thousand (400,000) euros per beneficiary, if the beneficiaries are the spouse and minor children of the deceased. The exemption for the surviving spouse is granted if the marital partnership lasted at least five (5) years.
  • The inheritance which accrues to the spouse, children, parents or siblings of a serviceman who died during, in the course of and because of service.

Acquisitions due to death are taxed separately at a rate of 0,5%, if the beneficiaries are:

  • Legal Entities under Public Law, prefectural governments, municipalities, communities, holy temples, holy monasteries, the Holy Community of the Holy Sepulchre, the Holy Monastery of Mount Sinai, the Ecumenical Patriarchate of Constantinople, the Patriarchate of Jerusalem, the Patriarchate of Alexandria, the Church of Cyprus, the Orthodox Church of Albania and
  • Non-profit legal entities, which exist or are legally established in Greece or in another member state of the European Union or the European Economic Area, as well as other corresponding foreign entities with the condition of reciprocity and the assets of article 50 of Law 4182/2013, if they pursue proven national or religious or charitable or educational or cultural purposes or generally beneficial to society in whole or in part.
Exemption for first dwelling on acquisition on death

A dwelling or a plot of land acquired on death by a spouse or a child of the deceased in full ownership, wholly or partially, is exempt from tax, if the heir or legatee or his/her spouse or any of his/her minor children do not have the right of full ownership or usufruct or occupancy of a dwelling or an ideal share of a dwelling that meets the housing needs of his/her family or the right of full ownership of a building plot or an ideal share of a building plot, which corresponds to a surface area of a building that meets their housing needs and is located in a municipal or communal district with a population of more than three thousand (3.000) inhabitants. The housing needs are considered to be covered if the total surface area of the above properties and the other corresponding inherited properties is seventy (70) square metres, increased by twenty (20) square metres for each of the first two children and by twenty-five (25) square metres for the third and each of the subsequent children, of whom the beneficiary has custody.

The beneficiaries of the exemption are Greeks and citizens of member states of the European Union and the countries of the European Economic Area (EEA).

The exemption is granted for an amount of value:

  • Dwelling up to two hundred thousand (200,000) euros for each minor or unmarried heir or legatee and up to two hundred fifty thousand (250,000) euros for each married and divorced or widowed or unmarried parent who has custody of their children. This amount is increased by twenty-five thousand (25,000) euros for each of their first two children and by thirty thousand (30,000) euros for the third and each of their subsequent children, if the beneficiary heir or legatee receives only one dwelling in full and full ownership and not an undivided share.

The amount of the exemption includes the value of a car parking space and a storage space, for a surface area of up to twenty (20) square meters each, if they are located in the same property and acquired at the same time.

Plot of land up to fifty thousand (50,000) euros for each minor or unmarried heir or legatee and up to one hundred thousand (100,000) euros for each married and divorced or widowed or unmarried parent, who have custody of their children. This amount is increased by ten thousand (10,000) euros for each of their first two children and by fifteen thousand (15,000) euros for the third and each of their subsequent children, if the beneficiary heir or legatee receives only one plot of land in full and full ownership and not an undivided share.

The exemption is granted under the same conditions if the heir or legatee is the owner of an undivided percentage of a house or plot of land and inherits the remaining percentage, thus becoming the owner of the entire property, as well as in the case of merging bare ownership and usufruct.

A spouse who is separated and has filed a petition or divorce action at least six (6) months prior to the time of the cause of death is also entitled to the unmarried spouse’s exemption. If he/she has custody of the minor children of the family, he/she is entitled to the married’s exemption. If the marriage is not dissolved by divorce within five (5) years from the date of death of the estate, the exemption granted shall be revoked and the relevant tax shall be paid.

When granting the exemption, persons who have entered into a cohabitation agreement are treated as spouses if the cohabitation agreement was concluded at least two years before the death of the deceased.

1.2. Taxation of Properties Acquired by Donation or Parental Benefit
Scope of the tax

For tax imposition purposes, the acquisition of property due to a donation is deemed to be the property derived from a donation constituted in accordance with the provisions of the Civil Code, and from any grant, concession or transfer of any asset without consideration, even if no document has been drawn up.

Donation tax is levied on:

a) the property of any nature in Greece that is donated,

b) the general movable property of a Greek citizen located abroad, which is donated,

c) the general movable property of a foreign national located abroad, which is donated to a national or a foreigner who is domiciled in Greece,

d) the movable property which is delivered before the death of the ascendant to the descendants on the basis of an inheritance contract.

The acquisition of property for parental benefit means the provision of property to a child by either of the child’s parents, either for the purpose of establishing or maintaining economic or family independence or for the purpose of starting or continuing a business, up to an amount not exceeding the amount required by the circumstances. The above amounts include previous donations or parental benefits made by the parents to their children.

Taxable Person

The donor or the child is liable to tax.

Time of incurrence of Tax Liability

The tax liability arises at the time when the deed of donation or parental benefit is drawn up. In the case of a transfer of movable property, if the delivery of the object of the donation or parental benefit was made without a contract being drawn up or if the contract was drawn up after the delivery of the object of the donation or parental benefit, the tax liability arises at the time of delivery.

Tax-Free Limits and Tax Rates

The acquisition by donation or parental benefit of immovable property or rights in rem or in rem on immovable property, shares and other assets (i.e. all assets other than cash) by donors who fall under categories A and B and C are subject to tax, calculated on the basis of the tax scales applicable to acquisitions on death.

The acquisition of monetary amounts by donation or parental benefit is subject to tax, which is calculated independently at a rate of ten percent (10%) for beneficiaries belonging to category A, at a rate of twenty percent (20%) for beneficiaries belonging to category B and at a rate of forty percent (40%) for beneficiaries belonging to category C.

In particular, from 01/10/2021 the parental benefit or the donation to persons falling under category A of any asset, as well as the parental benefit or the donation of monetary amounts to the above persons, which is carried out by transferring money through financial institutions, are subject to tax, which is calculated at a rate of ten percent (10%), after the deduction of a one-time tax-free amount of eight hundred thousand (800,000) euros.

Tax Exemptions

Ι. The following cases of acquisition of a first dwelling are exempt from tax:

In the case of acquisition by parental benefit in full and full ownership, subject to certain terms, conditions and restrictions:

a) dwelling, an amount up to two hundred thousand (200,000) euros for each adult unmarried beneficiary is not subject to tax. This amount is two hundred and fifty thousand (250,000) euros for married and divorced or widowed or unmarried parents who have custody of their children, plus twenty-five thousand (25,000) euros for each of their first two children and thirty thousand (30,000) euros for the third and each of their subsequent children,

b) plot of land, the amount of up to fifty thousand (50,000) euros for each unmarried beneficiary is not subject to tax. This amount is one hundred thousand (100,000) euros for married and divorced or widowed or unmarried parents who have custody of their children, plus ten thousand (10,000) euros for each of their first two children and fifteen thousand (15,000) euros for the third and each of their subsequent children. The amount of the exemption includes the value of a car parking space and a storage space, for a surface area of up to twenty (20) square meters each, if they are located in the same building and are acquired at the same time.

If the dwelling or the plot of land is jointly owned by both parents, an exemption is granted if the acquisition is made at the same time and with the same notarial deed.

ΙΙ. Donations are exempt from tax if the beneficiaries are the State and foreigners under the condition of reciprocity, if their exemption from tax is provided for by international conventions.

Exempt from tax:

  • Benefits or allowances paid, in a lump sum or periodically, by insurance institutions or funds to children, widows, parents and unmarried sisters of an insured person as a result of his death.
  • The transfer without consideration of movable or immovable property of the State, municipalities or communities or legal persons under public law to any third party.
  • The transfers without consideration of shares and other securities, with any further conditions, which are carried out by the State or the Public Securities Company or to the State or the Public Securities Company.
  • Donations of sums of money up to 80,000 euros (in total per beneficiary) paid, in a lump sum or periodically, to the spouse or minor children of a soldier who has died in the performance of his/her duties involving increased risk and manifestly and unquestionably as a result thereof.
  • Donations of movable assets located abroad that have not been acquired during the last twelve (12) years in Greece by a Greek citizen who has been resident abroad for at least ten (10) consecutive years and, in case of relocation to Greece, not more than five (5) years have elapsed.
  • Donations and contributions in kind or in cash to the body implementing humanitarian and development aid actions within the framework of international commitments undertaken by the country, provided that they are made exclusively for the implementation of these actions.
2. Real Estate Transfer Taxation
Real Estate Transfer Tax (FMA)

All matters relating to the imposition of real estate transfer tax are regulated by Law 1587/1950.

From 1.1.2006 VAT is applied to the purchase and sale of real estate [1]. 

Scope of the tax

Tax is levied on the value of any transfer of real estate or rights in rem to real estate located in Greece for a consideration.

Taxable Person

Transfer tax on the transfer price indicated in the contract is payable by the buyer.

Tax Rates

1. The transfer tax is calculated at 3% of the taxable value of the property.

2. The Real Estate Transfer Tax (FMA) is reduced to a quarter (1/4) in the following cases:

  • An identical distribution of property between the co-owners. When at the time of distribution the distribution portions are not equal to the ideal portions, then a 3% tax is calculated on the price paid in addition for filling one or more portions.
  • The dissolution of a general or limited partnership or a Limited Liability Company and the transfer of the real estate of the company to its members in proportion to their share in the company.
  • Transfer of real estate to the members of societies in cases where one or more societies are formed for the shares constituting such societies.
  • Acquisition of shares from the real estate of partners who withdraw from the Company. In these cases the tax is calculated on the value of the property or part of it leaving the corporate property.

3. The Real Estate Transfer Tax is reduced by half (1/2) in the following cases:

  • Mandatory exchange of parts of adjacent plots to make them buildable.
  • Merger of joint stock companies and cooperatives or acquisition of one or more companies by another which results in the transfer of immovable property or real rights thereto.
  • Expropriation for public benefit.
  • Exchange of properties of equal value. 
Tax Exemptions

Exemption from real estate transfer tax on the purchase of first dwelling is regulated by Law 1078/1980.

Contracts for the purchase of a dwelling or plot of land by a married couple or an adult single person are exempt from real estate transfer tax, where the purchaser or his spouse or any of his minor children has no right of full ownership or usufruct or occupancy of a dwelling or an ideal share therein which meets the housing needs of his family, or a right of full ownership of a dwelling or an ideal share therein which meets the housing needs of his family, or a right of full ownership of a plot of land which can be built on or an ideal share of a plot of land corresponding to the area of a building which meets his/her housing needs and which is located in a municipal or local community or municipality (if it lacks further administrative subdivision) with a population of more than 3.000 inhabitants.

Exemption is granted:

i. For the purchase of a dwelling by a single person up to the value of two hundred thousand (200.000) euros, by a married person up to the value of two hundred and fifty thousand (250.000) euros, while, by a married person who has a disability of at least 67% due to mental retardation or physical disability up to the value of two hundred and seventy-five thousand (275.000) euros. This amount shall be increased by twenty-five thousand (25,000) euros for each of his/her first two children and by thirty thousand (30,000) euros for the third and each of his/her subsequent children.    

ii. For the purchase of a plot of land by a single person up to the value of fifty thousand (50,000) euros, while by a married person up to the value of one hundred thousand (100,000) euros. This amount is increased by ten thousand (10,000) euros for each of his/her first two children and by fifteen thousand (15,000) euros for his/her third and each of his/her subsequent children.

In case of purchase of a dwelling, the amount of the exemption includes the value of a car parking space of 20 square meters and a storage space of 20 square meters, provided that they are located in the same property and are acquired at the same time with the same purchase contract.

The first dwelling exemption applies to real estate purchase contracts, provided that the purchaser permanently resides in Greece or intends to settle in Greece and belongs to the following categories of beneficiaries:

a) Greeks,

b) expatriates from Albania, Turkey and countries of the former Soviet Union,

c) citizens of the Member States of the European Union and the European Economic Area.

 


[1] See VAT on the delivery of new properties.

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