Tax Bill: 5+1 new tax reliefs and changes in compliance
New tax reliefs and changes in compliance procedure were voted for by the Greek Parliament on 05.12.2024. The new measures relieve property owners and are expected to increase the supply of properties on the market. In addition, tax incentives are provided to angel investors and a new framework is introduced for the taxation of closed-end funds (AKES). We outline 5+1 key changes below.
- New reduction in ENFIA (property tax)
Individuals will benefit from an ENFIA reduction of 20% for their properties that are insured for earthquakes, fire and flood. If the taxable value of the property exceeds EUR 500,000, the tax reduction shall be 10%. The insurance contract should have been in force for at least three months in the previous year. In addition, if the coverage is effective for less than one year, the ENFIA reduction will be adjusted proportionally.
- Tax exemption for new rental agreements
Income from new rental agreements on residential properties signed between September 8, 2024, and December 31, 2025, shall be exempt from taxation for 3 years (36 months). The following requirements shall be satisfied:
- The surface of the property must be up to 120 sq.m.
- The property has been declared as vacant in income tax filings (form E2) for tax years 2022, 2023, and 2024 (if the lease starts in 2025), or
- The property has been used exclusively for short-term rentals (such as AirBnB) during 2023 (or 2024, if the lease starts in 2025), with all such rentals properly declared to tax authorities.
- New framework for submission of individual tax returns
A specific timeframe was introduced for income tax returns filed by individuals, providing for discounts based on the submission and payment date. In particular:
- 4% discount is provided for individuals who file their income tax return within the period from March 15th to April 30th and pay their income tax one-off by July 31st;
- 3% discount is provided for individuals who file their income tax return within the period from May 1st to June 15th and pay their income tax one-off by July 31st;
- 2% discount is provided for individuals who file their income tax return within the period from June 15th to July 15th (deadline) and pay their income tax one-off by July 31st;
Individuals that are not willing to pay their income tax one-off, can settle their liability in 8 equal monthly installments, starting on July 31st.
- Tax exemption for capital gains from property sale
According to Article 41 of the Income Tax Code, capital gains tax is charged at a rate of 15% upon the sale of real estate by an individual. L. 5000/2022 provided for a suspension of this capital gain tax until December 31, 2024, and now this suspension is extended by December 31, 2026.
- Tax Incentives for Angel Investors
Capital contributions not only to startups but also to venture capital funds (A.K.E.S.) are deductible from the taxable income at a rate up to 50%. Therefore, individuals – “angel investors” may reduce their taxable income by €900,000 annually (cap) or/and €300,000 per investee (cap).
- Alternative Taxation on A.K.E.S.
Under the current scheme, A.K.E.S. is fiscally transparent and not subject to any tax. Now, there are two tax regimes for funds to be established in 2025. The new regime provides that the fund itself is taxed on the difference between the value of each investment at the end of each reporting period and the acquisition costs plus management fees. The tax rate is at 5% of the European Central Bank’s main refinancing rate. In this case, any liability from income tax is exhausted for both the fund and its unitholders. To be noted that funds established before January 1st, 2025, shall continue to fall under the previous scheme.
