Questions and answers on important real estate transfer tax issues
In the context of informing the citizens regarding issues related to the current tax regime, the General Secretariat of Public Revenue issued a detailed guide with questions and answers on issues of real estate transfer taxation.
What is the object of the Property Transfer Tax (F.M.A.) and who is liable for the payment of the tax?
In any transfer of real estate in exchange or establishment of a real right in real estate as well as in transfer of a ship with Greek flag, a tax is imposed on their value and the buyer is liable for its payment.
Which is the competent Tax Office? to submit the statement?
For each transfer of real estate, the parties are obliged, before the conclusion of the contract, to submit a joint VAT declaration. at the Tax Office, in whose territorial jurisdiction the property is located.
If in the area where the property is located, the provisions of article 41 of law 1249/1982 (AD 43) are applied and only if the receipt of the declaration according to the above is obviously difficult, the transfer tax return can be omitted from employee who receives the income tax return of the buyer and, in case the D.O.Y. has no responsibility for real estate transfer tax issues, the declaration is received by an employee of any other Tax Office, which has this responsibility.
In the case of the Tax Office, to which the Taxpayer Service Office (GEF) belongs, the real estate transfer tax return can also be received by the GEF employee, by way of derogation from the procedure, which defined in no. D6A 1077285EX2014 / 15-5-2014 (BD 1266 and 1392) decision of the General Secretary of Public Revenue.
What is the procedure for submitting the declaration and payment of VAT?
The statement is submitted in two copies, one of which is kept by the employee of the Tax Office. and the second, after verifying the accuracy of the copy, is delivered to the contractor.
The payment of the tax is made in credit institutions or in the ELTA. using a payment code.
How is real estate transfer tax paid?
In the areas where the objective system is applied, when submitting the VAT return, the taxpayer is obliged to indicate in this objective value of the transferred property, on the basis of which he pays the corresponding tax in a lump sum. In case the price is higher than the fair value, the tax is calculated on the price.
In the other areas where the objective system does not apply, when submitting the return, the taxpayer pays in full the tax corresponding to the value declared. During the submission of the declaration and within a period of two (2) days, the Head of the Tax Office. temporarily determines the market value of the property and the buyer now has the right, within a two-month subversive period from the date of receipt of the declaration, to submit a supplementary declaration according to the defined provisional value and to pay without penalty half of the corresponding tax and the rest half the month following the certificate. In case he does not submit the above supplementary statement, an audit is performed by the Head of the Tax Office. for the determination of the value, without being bound by the pre-assessment, and then an act of corrective determination of the tax is issued.
Against the final act of corrective determination of the tax, the taxpayer has the right to submit, within thirty days from its notification, an appeal requesting the review of the act in an administrative procedure by the Dispute Resolution Directorate and, after the issuance of the relevant decision, the taxpayer can appeal to the administrative courts.
What are the rates for calculating VAT?
The transfer tax is calculated at 3% on the taxable value of the property or the real estate on the real right.
The above rate applies to real estate transfers, which are carried out from 1/1/2014 onwards.
Ο Φ.Μ.Α. resulting in the above is reduced to half or a quarter depending on the legal form of the transfer or the capacity of the contracting parties. The main categories are the following:
a) Φ.Μ.Α. reduced to a quarter.
The cases where the F.M.A. reduced to the fourth is the actual distribution of real estate between the co-owners, the dissolution of OE, EE. and Ltd. and the transfer of the company’s real estate to its members, according to their share of the company, as well as the acquisition of the company’s real estate by partners who leave it.
b) VAT reduced by half.
The cases where the F.M.A. reduced by half is the exchange of real estate of equal value, the mandatory exchange of plots, the merger of SA. and Cooperatives, the forced expropriation for public benefit as well as the amalgamation of plots.
In which cases of creation or modification of horizontal or vertical ownership is VAT due?
In any case of establishment or modification of horizontal or vertical ownership, it should be investigated whether, directly or indirectly, real estate is transferred between co-owners, either in the form of distribution, exchange, sale or donation of ideal shares. Examples include:
– Establishment on a plot with existing buildings.
– Establishment and in the future right rise with existing buildings.
– Amendment of a recommendation by removing part of a horizontal property from the one to which it belonged and transferring it to a horizontal property of another co-owner.
– Recommendation with distribution of fine ownership.
– Distribution of existing vertical property on a plot with buildings.
– Abolition of an existing establishment on a plot with buildings.
Presumption of a completed building – What are the conditions for its application?
a. To transfer ideal shares of the plot.
b. The transfer should be done in exchange.
c. A building permit for the construction of an apartment building has been issued or the relevant application has been submitted no later than 2 years after the transfer and
d. The construction of the buildings to be done either by the seller of the percentages of the plot or by the contractor who undertook the construction of the apartment building in return, or by a third party acting on behalf of either the landowner or the contractor.
The above irrefutable presumption does not apply to the transfer of an ideal share of a plot of land to persons who undertake the construction of the entire building.
When is the distribution tax due?
During the actual distribution of real estate between their co-owners, VAT is due. (specified in ¼ of the integer tax rate), if the following conditions are met:
a. the distribution must be the same, ie each of the co-owners to receive either a divisible part of the real estate that is distributed or an indivisible percentage of them.
b. the value of the portion that each co-owner receives from the distribution, ie his physical portion to be equal to the value of their ideal portion, ie the value of his indivisible participation.
Ο Φ.Μ.Α. reduced to λεται is imposed on all the property distributed and, in case of unequal distribution, the additional value is considered to be acquired by a separate transfer and is taxed at the full rate of VAT, if paid in return, otherwise a donation tax is due.
Right of appeal.
a) The obligor, if he disputes an act of determination of the F.M.A. (administrative determination of the tax), has the right, within thirty days from the notification of the act, to submit an appeal with a request for the review of the act in an administrative procedure by the Dispute Resolution Directorate (Article 63 of Law 4174/2013). Against the decision of the Dispute Resolution Directorate or the tacit rejection of the appeal due to the expiration of the deadline for the issuance of the decision, the obligor may file an appeal before the competent Administrative Court.
It is pointed out that appealing to the administrative courts directly against any act issued by the Tax Administration is inadmissible.
b) If, after an audit, a temporary corrective determination of the tax is issued, the taxpayer has the opportunity to express his views in writing within
twenty (20) days from the notification of the written notification.
The Tax Administration issues the final act of corrective determination of the tax within one month from the date of receipt of the views of the taxpayer or, in case the taxpayer does not submit his views, from the expiration of the above deadline of 20 days. The final act of corrective tax assessment together with the audit report are notified to the taxpayer. Against the act of final correction of the tax, the taxpayer has the right within thirty days from the notification, to file an appeal requesting the review of the act in an administrative procedure by the Dispute Resolution Directorate.
It is pointed out again that appealing to the administrative courts directly against any act issued by the Tax Administration is inadmissible.
EXEMPTIONS
Who are the beneficiaries of the VAT exemption? to buy a first home?
The exemption is provided only to natural persons (married or unmarried), if they reside permanently in Greece or intend to settle in it no later than two years from the purchase (article 23 par. 4-5 law 3943/2011, Government Gazette 66 A ‘ / 31-3-2011)
With the provisions of article 21 of law 3842/2010, the exemption for Greek expatriates abroad who do not reside in Greece at the time of purchase was abolished. The categories of beneficiaries were also defined as follows:
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 of the European Economic Area;
d) recognized refugees, in accordance with the provisions of p.d. 96/2008 (Government Gazette 152 A),
e) citizens of third countries who enjoy the status of long-term resident in Greece, in accordance with the provisions of Law 4251/2014 (Government Gazette 80 A ‘).
It is pointed out that, especially for foreigners, their intention for permanent establishment in Greece is not invalidated by the fact that, for special reasons, the competent services grant them temporary residence permits that are renewed.
People from Northern Epirus and Turkey, if they have acquired the citizenship of a third country other than Albania and Turkey, cannot be exempt from the tax.
The exemption is also granted to the small owner of an indivisible percentage or small owner or usufructuary of a house or plot of land who buys the remaining percentage or the real right of usufruct or small ownership, in order to become the full owner of the property, if the percentage he has is not meets its housing needs.
The exemption of the unmarried is also granted to the divorced spouse, provided that an application or divorce lawsuit has been filed at least six months before the purchase of the property, provided that the marriage is dissolved within five (5) years from the purchase.
Owners of hotels, warehouses, offices, industrial premises and generally pure business premises are entitled to exemption. The property, which by the building permit or the title deed is characterized as a residence, is not considered a commercial property, even if it is used as a commercial property.
What is the scope of the exemption provided? Is there an exemption for ancillary spaces?
With the provisions of article 21 of law 3842/2010, changes were made in the object of the exemption as follows:
The exemption for the purchase of a house with an area of up to 200 sq.m. was abolished. or plot, which corresponds to a house with an area of up to 200 sq.m., regardless of their value, and an exemption is provided, which is related to the family situation of the beneficiary and the type of property purchased as follows:
– For the purchase of a house: from unmarried up to the amount of 200,000 Euros, from unmarried who has a disability of at least 67% from mental retardation or physical disability up to an amount of 250,000 Euros, from married to an amount of 250,000 Euros while from married who has a disability of at least 67% from mental retardation or physical disability up to an amount worth 275,000 Euros. This amount is increased by 25,000 Euros for each of his first two children and by 30,000 Euros for the third and each of his subsequent children.
– For the purchase of a plot of land: from unmarried to an amount worth 50,000 Euros, from married to an amount worth 100,000 Euros. This amount is increased by 10,000 Euros for each of his first two children and by 15,000 Euros for the third and each of his subsequent children.
If the value of the property exceeds the above tax-free limits, the exemption is granted up to the corresponding tax-free amount and VAT is due for the additional value.
In case of purchase of a house, the amount of the exemption includes the value of a parking space and a storage space, for an area of up to 20 sq.m., provided that they are on the same property and are acquired at the same time with the same purchase contract.
The above applies to first home purchases, the tax liability of which arises from 23-4-2010 onwards.
What are the conditions for exemption from first residence?
(a) The purchaser or his spouse or minor children do not have the right of full ownership or usufruct or residence in another house or apartment that meets the housing needs of his family or the right of full ownership of a building plot or an ideal plot of land, in which corresponds to the area of a building that meets its housing needs, and are located in a municipal district with a population of over 3000 inhabitants. It is noted that, for the control of the contribution of the conditions of the exemption with tax time on 20-3-2013 onwards, the population of the municipal or local community (and not of the single municipality) is taken into account based on the census of the year 2011 (Government Gazette 630 τ. Β ‘/ 20-3-2013). The population of the municipality will be taken into account only in their cases
Withdrawal of exemption – Sanctions
The sanctions provided by the provisions of article 1 par. 7 and 8 of law 1078/1980, are distinguished:
To those that are imposed on those who have legally received an exemption, but have not complied with the terms of the law for its maintenance (transfer, establishment of a right in rem within five years, article 1 par. 7).
B. Those that are imposed on those who asked for and received a first home exemption without meeting the requirements of the law.
a) Transfer of the property within 5 years.
In case the real estate is transferred or any real right is established in it by a living deed, except for a mortgage, before the lapse of five years, the one who transfers or constitutes a real right is obliged, before the transfer or the establishment of the real right, to submit a declaration and to pay the VAT in lump sum. corresponding to the value of the transferred property. The value of the property is taken as the value that the property has at the time of the new transfer or the establishment of the real right or the declared price of the transfer, if it is greater than the objective value. The tax is calculated on the basis of the rates in force at the time the exemption was granted, unless the tax corresponding to the value of the property at the time of the exemption is higher, in which case this higher tax is paid.
It is noted that, in the case of exemption for both spouses when buying real estate indivisible, when the percentage of one spouse is transferred to a third party within five years, the granted exemption is revoked and the tax corresponding to this percentage is paid.
b)If the buyer does not settle in Greece within two years from the purchase, he is obliged to submit a declaration no later than six months after the completion of two years and to pay the corresponding tax. For the calculation of the tax, the value of the property is taken into account at the time of submission of the declaration (no. 23 par. 4-5 of law 3943/2011).
C. Penalties in case of non-compliance with the conditions of exemption.
In case of a finding by the Tax Office. that the conditions for granting the exemption were not met, an act of corrective tax assessment is issued and the granted exemption is revoked. The tax imposed is calculated based on the value of the property at the time of finding the violation by applying the rates that were valid at the time of granting the exemption, unless the tax corresponding to the value of the property at the time of the exemption is higher. A 100% fine is also imposed on this tax.
Conditions for granting a second exemption.
Exemption from transfer tax for the purchase of a house or plot is provided once.
Exemption is also provided for each new property purchase, provided that in total:
(a) the property owned by the purchaser, the spouse or their minor children at the time of the new purchase does not meet the housing needs of their family; and
b) the buyer submits the relevant declaration and pays a lump sum tax corresponding to the value of the property that was exempted.
The value of the property is the value that it has at the time of the new exemption. For the calculation of the tax, the rates that were valid at the time of granting the first exemption are used and it is paid in a lump sum, unless the tax corresponding to the value of the property or to the price paid at the time of granting the first exemption is higher, then the highest is paid. this tax.
This exemption is also granted to persons who have been exempted from the transfer tax for the acquisition of housing until 14.7.1980, as well as to persons who have been exempted from inheritance or parental benefit tax for the acquisition of a first residence, provided that these persons meet the conditions for exemption and the relevant tax is paid on a case by case basis.
What documents are submitted for the grant of the exemption for first residence and when are they submitted?
The supporting documents required for the granting of the exemption from VAT. submitted together with the relevant declaration, before the signing of the final contract.
The supporting documents for the determination of the conditions of exemption are determined by the decision No. POL 1101 / 24-6-2010 (Government Gazette 1021 B ‘/ 30-6-2010) of the Minister of Finance.
What exemptions are provided to farmers?
With the provisions of par. 1 of no. 8 of Law 3220/2004 provides full exemption from transfer tax on the purchase or exchange of agricultural or livestock land, together with their facilities that serve exclusively their exploitation, to all farmers (young, newcomers or over 40 years) either with the provisions of Law 634/1977 or with those of Law 2520/1997, without any restriction (ceiling) as to the value or extent of agricultural real estate.
When is the right of the State to impose VAT expired?
For cases for which the taxpayer
