Tax reform flushes millions of euros and real estate into Greek coffers

Greece had developed as a paradise for property owners in recent years, with taxes paid only sporadically, if at all. Now the Greek treasury is hunting down the tax evaders. Tens of thousands of property owners from Greece and abroad have already paid hundreds of millions of euros in back taxes.

Income tax returns have been treated rather stepmotherly in the EU member state Greece. The same is true with regard to tax payments for real estate and property. Now, the requirements to be fulfilled within the framework of the EU aid packages are forcing the Greek government to act. However, the extent of the real estate tax evasion to date has not yet been fully uncovered, because many properties and plots of land have not even been officially registered. Germans who own property in Greece are also affected by the Greeks' tax reform.

The Greek government has long suspected that many taxpayers manipulate or conceal their real estate assets. In order to get a grip on this problem, a government decision was issued on 12 February 2018 to link the land register with the electronic tax system TAXISnet.

With the networking, the officials of the so-called "Independent Authority for Public Revenue (AADE) have the opportunity to further expand their control function. Direct access to the National Land Registry (Ktimatolgio) brings many advantages to tax investigators:

* better control of areas inside and outside the zoning plan
* detection of properties not registered in the E9 form
* knowledge of existing rights in rem
* verification of real areas with the data declared at the tax office

At present, most urban centres in Greece are officially registered. However, there are often large gaps or discrepancies between the cadastral and declared assets. If a check reveals discrepancies or ambiguities, the property owner is obliged to modify the declaration submitted to the tax authorities. The taxpaying property owner must pay the ENFIA, including any surcharges and fines. In addition, with the enactment of the tax reform, the municipalities have the right to retroactively claim the municipal taxes determined from the new assessment for a period of five years.

Meanwhile, the review of taxable property owners and the associated recalculation of taxes has led to chaotic conditions within the Greek population. More and more Greeks can no longer afford real estate. Thus, more and more Greeks are turning down their inheritance in order to avoid owning a property that they cannot afford for tax reasons. After all, in 2017 around 130,000 Greeks rejected their inherited property. This makes the state of Greece statistically the country's largest current inheritor. However, there is still no official information from the tax authorities on the actual real estate assets. Nor is there any clarity about how the real estate was used or disposed of.