changes in property transfers
Plus, 22 January 2010
The Finance Ministry is mulling radical changes to how the value of
transferred property is calculated for tax purposes, sources said this
A committee looking into the matter met on Monday to examine the idea
of reintroducing the calculation on the basis of actual market values,
rather than the officially determined, so-called "objective" rates,
which apply according to zone and are less than realistic because they
are only updated every few years.
The president of the Panhellenic Federation of Property Owners (POMIDA),
Stavros Paradias, proposed the application of "transaction coefficients" -
different in each zone - that bring the lagging "objective" value up
to par with the commercial value of the property transacted.
If for instance, the "objective" value in an expensive area has been
determined as 4,000 euros per square meter but the commercial value
is currently estimated at 4,600 euros, a transaction coefficient of
1.15 will be applied to produce a more realistic taxable value.
Other property levies, such as the large real estate tax, which will
replace the present unified property levy, will be calculated on the
basis of "objective" rates without the coefficient.
Meanwhile, the ministry is said to be planning to update the objective
rates in June.
The government is also examining the setting of a new tax-free ceiling
for the acquisition of a first home that will be connected with the "objective" value
of the zone and the owner’s marital status. This is likely to be around
150,000-200,000 euros for unmarried owners and 200,000-300,000 euros
for families. Increases will apply depending on the number of children.
The law in force now exempts all those acquiring a first home of up
to 200 sq.m., irrespective of the value of the property.
The ministry also plans to abolish the automatic capital gains tax,
ranging between 5 and 20 percent, which is applied on the difference
between "objective" sale and acquisition prices.
Separately, the Panhellenic Federation of Property Owners welcomed
in a statement last week’s withdrawal of the amendment concerning the
tax on parental property transfers. The amendment provided for the
determination of the tax at an unspecified date after the transfer.