The suspension of the 24% VAT on construction for two more years is being considered by the financial staff. The aim is to maintain high growth rates and further stimulate construction. According to the legislation, VAT on real estate has been "frozen" until the end of 2022. The government's intentions are to remain "frozen" until the end of 2024.

According to members of the financial staff, our country has the ability to suspend VAT on construction again. At the same time, they point out that the decision taken by the government in 2019 pushed real estate transactions. However, the construction of new properties also got a boost.

Reduced VAT rates

From 2025 the government has the possibility to reduce VAT on real estate from 24% to 13%, even reset him to zero. The recent EU decision permanently safeguards Greece's ability to apply specific reduced rates, which the Greek government will be able to do if budgetary conditions allow. What matters, say sources in the Ministry of Finance , is that now our country can proceed whenever it sees fit to implement reduced VAT rates.

It is noted that VAT is levied on sales of newly built properties. From January 2025 and if extended for the next two years, the VAT on new buildings may be limited or at 13% or the country to apply to join the derogations for real estate following the example of Luxembourg which has a zero rate.

Renovation for real estate

At the same time, the extension of the tax credit for those who renovate their properties is being considered. According to the legislation, property owners have the opportunity to save up to 1,600 euros from the tax they are entitled to if they have made repairs to their properties and have the relevant invoices. The discount amounts to 40% of the expenses with a maximum (expenditure) limit of 16,000 euros.

Thus, taxpayers for work of the order of 16,000 euros will get a 40% discount. That is EUR 6 400, which will be distributed equally over four years. The cost of materials is excluded from the discount. In order to benefit from the tax reduction, interested parties must have the relevant receipts. In fact, the payment of the amount must have been deposited through a banking system. The expenditure incurred in the previous year should be declared in a relevant code on the E1 form. The expense should be declared together with their tax returns.

particularly:

The expenses they will incur during the period from 1-1-2020 until 31-12-2022 owners of houses and other buildings to pay service fees related to the energy, functional and aesthetic upgrade of their properties, reduce the owners' income tax for the next four years to 40% of their amount. Namely 40% of the amount of expenditure that will have taken place in each of the years 2020, 2021 and 2022 will be distributed equally over the following 4 years. This will reduce the income tax assessed at the expense of the owner in each of these 4 subsequent years. For example, if the expenditure is incurred in 2020, 40% of it will be distributed equally over the years 2021, 2022, 2023 and 2024.

The amount of expenditure corresponding to each of these subsequent years, i.e. 1/4 of 40% of the expenditure, will reduce the personal income tax certified to the taxable owner in that year.

Please note that:

• For the calculation of the deduction, only the costs for the work will be taken into account. Costs for the procurement of materials will not be taken into account.
• Necessary conditions for the deduction of 40% of the expenses for energy, functional and aesthetic upgrade of buildings from the owner's income tax for the next 4 years are that the buildings for which the expenses are incurred have not already been included or will not be included in a building upgrade program.