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Greece: Living There - Tax Issues

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Living There

INDIVIDUAL TAXATION

Residents are taxed on their worldwide income. Issuance of a residence permit by the Ministry of Interior is a requirement for residence. Married persons are taxed separately.

INCOME TAX

For tax assessment purposes, income is divided into the following categories:

• Category A – income from immovable property (land)
• Category B – income from immovable property(buildings)
• Category C – income from movable property (investment income)
• Category D – income from business
• Category E – income from agriculture
• Category F – income from employment
• Category G – income from professional services and other income

Taxable income is generally an aggregate of all kinds of income, less income-generating expenses and allowable deductions. Different rates are applied to employment income when it comprises more than 50% of the declared income.

The non-taxable amount of income is increased by:

• €1,000 for individuals with one dependent child;
• €2,000 for individuals with two dependent children; and
• €10,000 for individuals with three dependent children, increased by €1,000 for each additional child.

Residents are entitled to deductions and allowances:

• Life insurance premiums up to €1,200 for both spouses are deductible. Social security contributions are fully deductible.
• Interest payments on mortgage loans signed up to December 31, 1999 are fully deductible. This is limited to one principal home of the taxpayer in his lifetime. For mortgage loans signed between January 1, 2000 and December 31, 2002, interest payments are fully deductible for dwellings with an area of 120 square meters or less. For dwellings with an area of more than 120 square meters, the deductible interest is reduced proportionally.
• For mortgage loans signed after 2002, a credit equal to 20% of the annual interest is granted. This is limited to one principal home of the taxpayer in his lifetime. This credit cannot be claimed if the taxpayer or his dependants already own a dwelling with an area of 70 square meters or more, increased by 20 square meters for each of the first two children and 25 square meters for each additional child. If the total area exceeds 120 square meters, the credit is reduced proportionally. This credit can only be claimed in respect of the part of the loan financing that does not exceed €200,000.
• Donations in cash to the state, state universities, the church and other public bodies and institutions are fully deductible. Donations to philanthropic institutions, amateur sports clubs and similar charities amounting to at least €100 in total may be deducted, but only up to 10% of the declared income of the family.
• For donations exceeding €2,950 for each donee, the donor must pay a flat tax of 10% on the excess; otherwise the donation is not deductible.
• A credit of 20% of the annual medical expenses of the taxpayer and dependants can be claimed. The maximum of the credit is €6,000.
• A credit equal to 20% of the annual home rent for the taxpayer and his dependants, if the taxpayer and his dependants do not own a dwelling with an area equal to or larger than the rented dwelling in the same province and the taxpayer does not receive rental allowance from the state. The maximum of this credit is €240.
• A credit equal to 20% of the annual rent paid for dependent children studying at a Greek school or university. The maximum of this credit is €240.
• For taxpayers with employment income living for at least 9 months of a year in certain border areas or on specified islands, a credit of €60 in respect of each dependent child is granted.
• A credit equal to 20% of the expenses incurred in converting oil central heating systems to natural gas systems or for the installation of new natural gas or solar power heating systems or for the purchase of power generating systems using renewable energy sources. The maximum of this credit is €700.

CAPITAL GAINS TAX

Gains from the sale of real estate located in Greece are taxable. For properties purchased after 01 January 2006, the rate depends on how long the property was held. Capital gains are computed as selling price less acquisition costs.

Capital gains realized from properties purchased on or before 31 December 2005 are not taxable.

PROPERTY TAX

State Real Estate Tax

State real estate tax is imposed annually on natural and legal entities that possess Grecian property. The tax base is the objective property value on 01 January as assessed by the tax authorities. The general tax rate is 0.1% and the value no less than €1/m².

For private primary residences are not taxable provided that the property area is up to 200m² in size and the value does not exceed €300,000.

Local Real Estate Duty (TAP)

Local real estate duty is also levied annually on the value of the land. The rate varies between 0.025% and 0.035% of the assessed value of the property and is set by the local authorities.

Greece - more data and information

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