GREECE Law and Practice Contributed by: Nikolaos Koulocheris, Ioannis Charalampopoulos, Rozita Karasso and Dimitra Kotsovelou, Machas & Partners
8. Tax 8.1 VAT and Sales Tax
quently used security devices include performance bonds issued by third-party sureties, letters of credit from financial institutions, parent company guaran - tees, escrow accounts holding funds pending perfor - mance milestones and retention amounts withheld from interim payments. The choice depends on fac - tors such as project complexity, contractor creditwor - thiness and the owner’s risk tolerance. Such meas - ures provide reassurance and financial protection, but their enforceability and practicality depend on clearly drafted contractual terms and compliance with local legal requirements or market practices. 7.6 Liens or Encumbrances in the Event of Non-Payment Contractors and designers commonly have statutory lien rights permitting them to encumber a property if they are not paid for their work. Procedures for record - ing such liens vary by jurisdiction, typically requiring formal notices and filings within strict deadlines. Own - ers can remove liens by paying the underlying obli - gation, negotiating a settlement or contesting valid - ity through legal channels, including court actions or arbitration. Alternatively, owners may post a bond or security to discharge liens pending resolution. Ensur - ing timely payments and carefully monitoring lien procedures are crucial preventive measures to pro - tect against property encumbrances and associated disputes. 7.7 Requirements Before Use or Inhabitation A certificate is issued by the competent urban plan - ning authority confirming that the building has been constructed legally and can therefore be inhabited or used. Prior to the issuance of the certificate, a gov - ernmental inspection is carried out confirming com - pliance with building codes, zoning regulations, fire safety standards, environmental requirements and applicable permit requirements. Failure to secure such a certificate may expose parties to fines, prevent occupancy or trigger liability issues. Procedures and criteria for obtaining certificates vary by jurisdiction, project type and complexity. Owners and contrac - tors commonly co-ordinate closely to ensure timely inspections, compliance documentation and resolu - tion of deficiencies to facilitate smooth occupancy approval.
Pursuant to the provisions of Law 5144/2024 (Greek Law for VAT), VAT is imposed on the supply of goods, provided that this is carried out by means of a trans - action made for consideration. The sale or purchase of real estate can qualify as supply of goods for the purposes of VAT, to the extent that it involves the transfer for consideration of the ownership of com - pleted or unfinished buildings or parts thereof before the first occupation by a transferor who carries out, on a regular basis, the aforementioned transactions. The applicable VAT rate is equal to 24% of the taxable value and is payable by the purchaser. No real estate transfer tax is imposed on transactions on which VAT is imposed. By virtue of Article 12 of Law 5246/2025, the application of VAT to the sale of real estate prop - erties under construction can be suspended until 31 December 2026, while any suspensions until 31 December 2025 already granted were extended until 31 December 2026. Transfer taxes shall apply to any transfer of real estate properties not subject to VAT due to such suspension. 8.2 Mitigation of Tax Liability In Greece, tax-efficient structures are commonly used to mitigate transfer, recordation and stamp duties on large real estate acquisitions. A key strategy is acquir - ing properties through share deals rather than asset deals, as transferring shares in a company holding real estate is generally exempt from VAT and real estate transfer tax. Additionally, acquisitions through REICs benefit from preferential tax treatment including exemption from the payment of transfer tax. Merg - ers, corporate restructurings and contributions of real estate into holding entities under specific tax provi - sions can also minimise transaction costs by qualify - ing as tax-neutral reorganisations. Proper structuring ensures compliance while optimising tax efficiency in high-value real estate transactions. 8.3 Municipal Taxes In Greece, businesses occupying commercial prem - ises are subject to municipal taxes, primarily the Municipal Cleaning and Lighting Fee and the Munici - pal Real Estate Tax (TAP), both collected via electricity bills. Municipal Cleaning and Lighting Fee is based
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