Tax bill: Four incentives for property purchases with ENFIA, VAT and tax exemptions

Reducing the tax burden for those investing in real estate, especially in preserved and closed properties, is offered by provisions in the tax bill tabled in the House.

Last-minute additions provide permanent exemption of listed properties from VAT, an extension until the end of 2025 of the suspension of VAT on newly built properties, keeping prices in the real estate market stable. There are also plans to extend the property capital gains tax, which will boost purchases and a three-year tax exemption for closed properties or short-term leasehold properties that are converted to long-term leaseholds.

These provisions are intended to reduce the tax burden, with an emphasis on both listed and enclosed properties. At the same time, favorable measures are introduced aimed at strengthening the real estate market and attracting domestic and foreign investors.

The relevant provisions of the tax bill

– Extension of VAT suspension for new buildings until 31.12.2025

As a reminder, the 24% VAT was imposed on property purchases in 2006 and applies to properties with a building permit from 1 January 2006 onwards, with the exception of the purchase of first homes. The VAT suspension, which started in 2020, is extended until the end of 2025. This is expected to further support the upward trend in the real estate market and attract more investment, especially from abroad.

– Permanent exemption from ENFIA for listed buildings worth up to 400,000 euros.

This is a significant relief for owners, especially for those considering renovating such properties. This category also includes investors from third countries interested in obtaining a Golden Visa in Greece. The legislation provides for a low investment threshold of 250,000 euros for listed buildings across the country, which is expected to be an incentive for their purchase and restoration.

– Extension until 31.12.2026 of the suspension of capital gains tax on property transfers

The goodwill tax, amounting to 15% on the difference between the purchase price and the sale price, remains “frozen” for two additional years. Taxpayers who transfer property by the end of 2026 will not be subject to this tax, easing liquidity and encouraging more transactions in the real estate market.

– Income tax exemption for 3 years for rental properties

One of the most innovative provisions in the bill is the income tax exemption for properties previously declared as vacant or used for short-term rentals.

The conditions for the exemption include:

• ◦ The property must have a surface area of up to 120 sq.m.
• ◦ Three-year leases must be entered into between September 8, 2024, and December 31, 2025.
• ◦ Be declared as a vacant property or made available exclusively for short-term leasing in the tax years 2022, 2023, and 2024.

The government is considering reducing the time required to move from short-term to long-term leases, enhancing the sustainable use of property.

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