Real Estate Transfers: 5% Guarantee for Delinquent Taxpayers – How the Favorable Regulation Will Be Implemented

Thousands of property transfer cases held by taxpayers with overdue debts to the public sector are expected to be resolved following a decision by the Independent Authority for Public Revenue (AADE) to reduce the retention rate from 50% to just 5% of the sale price as a guarantee for debt repayment, according to ERTnews. Under the previous system, even if the taxpayer’s debt was frozen due to a judicial appeal or a decision by the Dispute Resolution Directorate (DED), tax legislation required an automatic retention of half the sale amount as security for the debt, acting as a deterrent for taxpayers to proceed with the process. The new favorable treatment applies to taxpayers with primary debts exceeding €50,000 that are currently suspended due to either a court decision or a DED ruling. To reduce the retention from 50% to 5%, the debtor must provide alternative guarantees such as bank guarantees or first mortgages on other properties. In the case of a mortgage, AADE will accept the guarantee based on 80% of the property’s objective value. If the mortgage value is insufficient to fully reduce the retention to 5%, it will be adjusted proportionally to 10%, 20%, 35%, etc., depending on the coverage provided. For example, an owner with a €100,000 suspended debt selling a property for €220,000 could offer another property with an objective value of €120,000 and register a first mortgage. AADE would accept this as 80% of its value, i.e., €96,000, reducing the retention from €110,000 (50%) to €11,000 (5%), facilitating liquidity and completing the transfer. For those with regulated overdue debts who are current in their payments, digital tax clearance certificates are issued with a 70% retention on the proceeds up to the amount of the regulated debt if the sale price equals or exceeds the property’s objective value. If the sale price is lower, a 70% retention on the proceeds is applied first, followed by 70% on the objective value, ensuring the final retention does not exceed the sale price. For taxpayers with unregulated overdue debts over €30 that are not part of a payment plan or suspension agreement, no clearance certificate is issued. In these cases, provided all necessary declarations have been submitted and there are no other liabilities, a Digital Debt Confirmation can be issued through myAADE to finalize the transfer.