A new legal provision introduced by the Greek government is set to transform the landscape of inheritance tax on real estate. The new bill from the Ministry of Finance aligns the framework for taxes related to properties acquired through inheritance with that already applied for first-home purchases, leading to a more streamlined process, more beneficiaries qualifying for zero tax burden, and stricter conditions.
Until now, tax exemptions for inherited property were based on limited and disproportionate criteria. Housing needs were considered satisfied with a property up to 70 square meters, regardless of family status, without adjustments for children or disability. Additionally, exemption value thresholds were insufficient for today’s market:
– €200,000 for single or minor heirs
– €250,000 for parents or married individuals with children
There was no provision for storage spaces or parking spots, and the legislation was unclear regarding cases where bare ownership and usufruct belonged to the same person.
The new regime brings significant changes. The inheritance tax exemption for primary residence is now fully aligned with the tax treatment of first-home purchases. The permitted square meters for housing needs have increased significantly:
– 70 sq.m. for general population
– 90 sq.m. for people with disabilities (≥67%)
– +25 sq.m. for each of the first two children
– +30 sq.m. for the third and any additional child
– +45 sq.m. for each disabled child, regardless of age
In practice, a family with three children can now cover up to 150 sq.m. of residential space without paying tax. Furthermore, the exemption can now include one storage area up to 20 sq.m. and one parking spot within the same horizontal property ownership.
In terms of monetary thresholds, the tax exemption has been expanded and made more sensitive to family composition:
For residences:
– €200,000 for single or minors
– €250,000 for married or single-parent households
– +€25,000 for each of the first two children
– +€30,000 for the third and subsequent children
For inherited land (not built property), the threshold starts at €50,000 for singles and reaches up to €145,000 with increases per child.
Strict conditions remain. The beneficiary—and their minor children—must not own any kind of right (ownership, usufruct, or habitation) over another home that meets their housing needs. Moreover, the exemption is granted only once in a lifetime, and the home must remain in their ownership for at least five years.
Special provisions apply for divorced or separated spouses. If a divorce petition or action was filed at least six months before death, the surviving spouse retains the exemption right, provided they repay any unpaid tax if they had previously benefited from a first-home purchase exemption.
Automatic notification for unreported transfers
Another change concerns the registration of deeds at the Land Registry Office without prior submission of a tax declaration. Now, the Head of the Land Registry will be required to notify the Tax Authority within the following month after the transfer, aiming to identify untaxed assets without blocking the registration process.
Debt deduction from the deceased’s estate
Heirs may submit an application to deduct debts owed by the deceased (e.g., to the state) from the inheritance’s value, even after the initial declaration, subject to specific deadlines.
Prohibition on transferring agricultural land exempt from transfer tax
To prevent abuse of exemptions, a clear prohibition is now in place against transferring agricultural land that had been exempt from transfer tax unless 15 years have passed since the exemption. If transferred earlier, the applicable tax must be paid immediately.
Vacant inheritances: Continuity in tax assessment
For vacant inheritances—where the deceased has no apparent heirs—the assessed value by the Tax Authority during the vacancy phase binds future heirs, though they retain the right to challenge it unless a court decision has already been finalized.