VAT on property transactions is prohibitive for potential buyers

Purchasing a house or apartment in Greece that was built in the last 12 years is forbidden fruit for the majority of foreign buyers or for locals who have already bought their main residence. The reason is not so much the cost of the property - as prices have dropped 40-50 percent since 2008 - but rather the tax load, concerning the 24 percent value-added tax that has to be paid.

With the exception of people purchasing main residences, VAT must be paid by all buyers of property with a building permit dated later than January 1, 2006. Greece's 24 percent rate means the tax load is very high on those assets, so hardly anybody is looking at them. When one adds the various other costs involved, such as registration at notaries and the cadaster, the estate agent's commission etc, Greece is the fourth most expensive country in the European Union in terms of the total cost the...