BUSINESS

Red tape, prohibitive costs deter parental concessions of property

THANOS TSIROS

TAGS: Economy, Property

Property owners are rushing to notaries to transfer their real estate assets to their children before January 1, when the new taxable rates for properties, known as objective values, come into effect. However, most give up when they figure out just how much such a transfer would set them back.

They suddenly understand just why the World Bank ranks Greece 153rd in the world regarding the ease of property transfers. They become aware of the fact that each of the 11 necessary steps in each transfer requires at least 20 days of preparation if all goes well and up to two months if something goes wrong in the bureaucratic procedure that still requires all forms to be filled in by hand.

As for the transfer costs, even when there is no need for the payment of tax – the tax-free ceiling for parental concessions remains at 150,000 euros and covers most such transactions – they can exceed 3-4 percent of the property’s cost in real terms.

Basic transfer costs concern paying a notary and civil engineer (to certify there are no law violations) as well as re-registering the property. However, they can also extend to the settlement of town planning violations, while the owner will have to be up to date on their payments toward the Single Property Tax (since 2013) and the Municipal Property Levy, or TAP (since 2009 or 2013).

Furthermore, if the owner has any other overdue arrears to the tax authorities, they will have to pay them too, in order to receive a tax clearance certificate, while the Single Social Security Entity (EFKA) has also waded into the fray, requiring a clean sheet before it issues the social security clearance certificate now required before a transfer can go ahead.

Virtually the entire civil administration uses property transfers to force owners to pay for all their past sins. Even when no such sins exist, sellers often have to make sure they pay in advance for future tax obligations. Some owners have had to pay their Single Property Tax (ENFIA) installments for December and January so as not to run into any problems getting their tax clearance certificate.

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