Australian property buyers looking to Greece could face a substantially higher cost of entry under plans to lift the property transfer tax for affected non-EU purchasers from 3 per cent to 15 per cent.
Greece is moving to substantially increase the cost of residential property purchases for many non-European buyers as the government looks to ease housing pressures and give local residents greater capacity to compete for homes.
Greek Prime Minister Kyriakos Mitsotakis announced the measure at the Thessaloniki International Fair as part of a broader €2.2 billion economic and housing package.
Under the new framework, the property transfer tax applying to qualifying residential purchases by third-country nationals would rise from 3 per cent to 15 per cent, creating a significant additional upfront cost for affected international buyers.
The move represents a shift in the way Greece is approaching foreign residential investment after years in which comparatively affordable property, strong tourism, lifestyle appeal and residency incentives have helped attract buyers from around the world.
For Australian real estate commentator and auctioneer Tom Panos, the announcement should put prospective Australian buyers on notice.
“Greece is sending a message to foreign property buyers, and Australians need to pay attention very much in this moment,” Tom said in an Instagram post.
“This is not a little adjustment. That is the government putting a serious speed bump in front of foreign buyers.”
The financial implications could be considerable.
Using the basic 3 per cent and proposed 15 per cent rates, a €500,000 residential purchase would attract about €15,000 in transfer tax under the existing rate, compared with €75,000 at 15 per cent.
On an €800,000 property, the equivalent tax would rise from about €24,000 to €120,000.
While Tom cautioned that important details surrounding implementation remained to be clarified, he said the direction of the policy was apparent.
“This is clear, Greece wants to make it easier for local Greeks to compete for housing while making it more expensive for overseas buyers from outside of Europe,” he said.
“And frankly, it doesn’t surprise me. Greece is hot right now.”
International interest in Greek property has grown alongside the country’s tourism sector and broader economic recovery, while its Golden Visa program has provided another incentive for non-EU investors to enter the market.
Tom said Greece’s combination of lifestyle, tourism, overseas demand and relative value compared with other parts of Europe had made the country increasingly attractive to international purchasers.
But that popularity has also placed foreign investment into the wider political debate around housing affordability and access for local residents.
“When a market becomes attractive, governments eventually step in,” Tom said.
“We’ve seen versions of this around the world – foreign buyer taxes, vacancy rates, tighter rules, higher thresholds. Governments respond when locals feel they are being priced out.”
What it means for Australian buyers
For Australians captured by the higher rate, the difference between paying 3 per cent and 15 per cent could materially change the financial equation of purchasing a Greek home.
That could be particularly significant for buyers looking at Greece for a second home, lifestyle property or investment, where tens of thousands of euros in additional transaction costs may now need to be factored into purchasing decisions.
The changes also come as governments in a number of popular international property markets grapple with the competing priorities of attracting overseas investment and ensuring local residents are not locked out of housing.
Tom believes the prospect of a higher tax could have an immediate effect on buyer behaviour, particularly among Australians and other non-EU purchasers who were already considering entering the Greek market.
“If this proposal looks like to become law, I would expect a rush of non-European EU buyers to try and secure a property and settle before the end of the year,” he said.
However, he cautioned Australians against rushing into a transaction without first understanding how the rules could apply to their individual circumstances.
Questions around citizenship and residency status, the treatment of contracts entered into before commencement and the interaction with Greece’s Golden Visa program are among the issues buyers will need to consider as the framework is implemented.
Tom, himself a dual citizen, said those distinctions could prove particularly important for Australia’s large Greek diaspora, where buyers may hold Greek or other European citizenship despite living permanently in Australia.
His advice is for prospective purchasers to seek specialist advice rather than making decisions based purely on the prospect of higher costs.
“If you’re an Aussie thinking about buying in Greece, get proper legal advice,” Tom said.
The transfer tax measure forms part of a wider push by the Mitsotakis government to address housing affordability and availability, with Greece attempting to balance its appeal to international investors with mounting pressure to improve housing access for its own population.