The Ministry of Finance is preparing to give a 15-day extension for real estate transfers with the current objective values, which at the same time plans to keep 24% VAT on the purchase and sale of newly built real estate on “ice” until 2024.
The changes in the rules of VAT rates decided yesterday by Ecofin enable Greece to extend the 24% VAT suspension on transfers of newly built real estate for another two years and specifically until the end of 2024. From 1 January 2025, depending on the fiscal conditions, Greece will be able to choose whether to apply to the transfers of new buildings a reduced rate of 13% or even zero as is the case in other EU countries. (eg Luxembourg).
The measure of VAT suspension on newly built properties until the end of 2024 is expected to support the real estate market, which has been on the rise in recent months and to attract more investment from abroad.
24% VAT was imposed on the purchase and sale of real estate in 2006 and concerned properties with a building permit from 1 January 2006 onwards, with the exception of the purchase of a first home. In the years of the Memoranda The government in 2019 decided to suspend VAT from 1 January 2020 until 31 December 2022, which includes both cases of new licenses and old licenses issued since 1 January 2006.
It is noted that the current legislative regime provides that “at the request of the taxable person, of building manufacturer for sale, the VAT imposition on real estate is suspended until 31.12.2022. and a real estate transfer tax is imposed. The suspension concerns all the above unoccupied properties of the person. Τhe person should also submit a statement with the unoccupied properties and the amount of tax that corresponds to each property to be settled “.
The exemption also applies in the case of contractual consideration when the builder who is subject to the tax, has been subject to a VAT suspension regime as the relevant provision stipulates that “especially in cases of contractual consideration, the contract of the taxable builder for sale to the land, is not subject to tax when the underlying manufacturer has been placed under a tax suspension arrangement ‘.
15-day extension to sign the contracts
The Ministry of Finance is preparing to submit to the Parliament a legislative regulation which will give the possibility to taxpayers to sign contracts with real estate agents after the New Year, as well, when the new objective values will be activated, which are increased up to 250% in over 7,000 areas across the country.
The provision will give taxpayers the possibilty to sign the contracts until January 15, 2022 provided that the declarations of transfer tax, parental benefits and donations have been submitted to the Tax Office until 31 December 2021. It is noted that the declarations for buying and selling real estate are submitted electronically on the myProperty platform of the Independent Authority for Public Revenue (IAPR), while for parental benefits and donations IAPR is expected to open the platform for the electronic submission of declarations of parental benefits and donations in the coming days. The extension until January 15 for the signing of the contracts also concerns the donations that have received a protocol number.