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Change of purchase tax
The purchase tax will change and will increase and the new officially determined values (known as objective values), used for tax calculation will also increase.
 
Following an example on the current situation and the coming situation to make it clearer; let¢s say you want to purchase a property for 100.000 Euros.

Until now you had to pay on each property, old or new, land etc. next to the other additional purchase costs like broker fees, solicitor fee, notary fee and registration following taxes:

If contract is based on the purchasing price of 100.000 Euros
Transfer tax1
usually 7% for the value until 15.000 Euros   10.050 Euros
Transfer tax2
usually 9% for the value above 15.000 Euros  7.650 Euros
Municipality tax
3% of the transfer tax                                 261 Euros
Sum                                                                8.961 Euros
 
If contract is based on the objective value, say 40.000 Euros
Transfer tax1
usually 7% for the value until 15.000 Euros    1.050 Euros
Transfer tax2
usually 9% for the value above 15.000 Euros  2.250 Euros
Municipality tax
3% of the transfer tax                                  99 Euros
Sum                                                                  3.399 Euros

New law expected as of 1st January 2006, if contract is based on the purchasing price of 100.000 Euros
19% VAT                                            19.000 Euros

New law expected as of 1st January 2006, if contract is based on an increased objective value (our example 40.000 Euros + 30% = NEW objective value 52.000 Euros)
19% VAT                                                  9.880 Euros
 
It is clear that the current purchase taxes will be replaced with the 19% VAT. It is not clear if this affects only new built properties or all properties. The Greek Economy and Finance Minister said that the government is still expecting the European Union¢s answer to Athens¢s demand for an exemption on primary residential homes from VAT. He also said, that by the end of July his ministry will have published the plan for all changes to real estate taxation. The draft bill shall be now announced after Christmas!!!!

It is clear that the objective value will be on average about 30 percent higher than the current ones.


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