The Greek islands and the center of Athens have recently seen a high number of property transfers – either sale transactions or parental concessions – carried out with the aim of avoiding the heavier tax to be imposed by the full implementation of the new objective values – property rates used for tax purposes – from January 2019, after their partial application for the Single Property Tax (ENFIA) in July 2018.
Thousands of real estate owners have been making appointments with notaries to transfer the assets they own, or part of their ownership, to their children, or to start businesses so they can pay less tax to the state.
According to major notary firms, transactions have risen by 30 percent over the last couple of months, which is primary attributed to the upcoming objective value adjustment. In Kolonaki, central Athens, and nearby districts, sales are related to the new objective values and the increased dues expected from next year, while in the broader area of the city center they are related to interest in offering small properties on a short-term rental basis – which can be a lucrative business.
As of January 1, 2019, the new objective values will apply to transfers, inheritances, donations and parental concessions, as well as the property levy that goes to local authorities.
Besides Kolonaki, the islands of Myconos and Paros and the town of Aghios Nikolaos on Crete have seen the biggest hikes in objective values, which are set to send all property-related taxes soaring, especially the supplementary ENFIA. While the main ENFIA dues have remained almost unchanged for some of the above areas, the supplementary tax imposed on properties with a taxable value of over 250,000 euros has resulted in dues rising much higher.
The shifting of the load yet again to owners of medium-sized and large properties is forcing those owners to distribute their assets among their family members, thereby reducing or eliminating their supplementary tax dues if their ownership drops below the 250,000-euro threshold.