ECONOMY

Real estate owners must first pay tax and then sell their properties

As of next year, real estate owners in Greece will only be allowed to make property transfers if they have paid the Single Property Tax, according to a regulation to be included in the draft law for the new tax on property to apply from January 2014. The country’s international creditors had demanded the measure in the hope that more people would pay the tax, which would in turn reduce the state’s requirements from taxpayers from the original sum of 4.2 billion euros per year.

Property transfers will also be permitted if the the buyer undertakes the payment of the tax due. Owners will be able transfer the property to the state without suffering any legal penalties, although in such cases the difference between the value of the property and the tax due will not be returned to the owner.

The bill will ban the drafting of a contract concerning a property whose owner has not paid the new tax, in which case the notary document will be annulled. Notaries will therefore have to attach to the contract a certificate from the tax authorities proving the payment of the tax. Any notaries who fail to do so will have to pay a fine of 5,000 euros. An exception can be made if the tax certificate includes the outstanding amount of tax which the notary will have to pay within three working days from the submission of the contract.

A similar clause was included in the law for the existing FAP property tax, banning the transfer of properties without the payment of the property tax, with the penalty for notaries at 3,000 euros.

The heads of land registry offices will also have to turn down registration applications concerning properties with unpaid taxes.