Greece Plans Fivefold Increase in Property Tax for Foreign Buyers

Greece is set to significantly increase its property purchase tax for non-European Union citizens, a move that will likely make the country less attractive to foreign investors, including Israelis. Prime Minister Kyriakos Mitsotakis announced plans to raise the tax from 3% to 15%, a fivefold increase, targeting investors from countries like Israel, China, and Turkey. Mitsotakis stated these foreign investors have contributed to rising apartment prices, making it harder for Greeks to afford homes.

For example, a property in Athens costing €150,000 would currently incur a purchase tax of €4,500, but under the new rules, this would jump to €22,500. Similarly, the tax on a €300,000 property would rise from €9,000 to €45,000. These substantial increases could render previously profitable real estate deals less viable. The calculations do not include additional urban taxes or other purchase expenses.

The change is expected to take effect on July 1, 2027. Previously, Greece offered a "Golden Visa" for property purchases of €250,000, granting residency. However, a surge in foreign investment led to rising property and rental prices, prompting public pressure on the government. In response, Greece raised the investment threshold for the Golden Visa in Athens and other popular areas to €800,000 and imposed restrictions on short-term rental registrations in certain parts of Athens and Thessaloniki.

During the Thessaloniki Economic Forum on September 5, Mitsotakis presented the tax hike plan, aiming to cool demand from foreign investors while boosting state revenue. The delay until July 2027 allows time for transactions to be completed under the current, lower tax rate, with reports of investors rushing to finalize deals. According to Greek Migration Ministry data for August, Chinese investors received the most Golden Visas (12,664), followed by Turks (5,104), Lebanese (1,169), Iranians (1,010), and Israelis (849).

Yaron Blum, owner of the real estate company Yams, noted that changes in the Golden Visa requirements and the widening gap between property and rental price increases had signaled this shift. He believes the final tax rate might be lower but will alter investment strategies. Lawyer Ilan Libovitz, a former MK and finance committee member, highlighted the potential absurdity of a dual citizen paying 3% tax while a non-EU citizen pays 15% for the same property, emphasizing that a concrete bill has not yet been drafted and potential exemptions for areas outside major cities are being considered.