The provisions of the income tax code that impose an obligation on the buyer of real property in Greece to justify the amount spent in purchasing the property and, in case of failure to do so, to pay income taxes on the amount that is considered as unreported income, are temporarily suspended. By a recent provision included in Law 3986/2011, the parliament, in an effort to support the real estate market in Greece, adopted the suspension of the application of these provisions, not only for the acquisition of first residential property, but for the acquisition of any kind of real property in Greece. The suspension applies as from 17-12-2010 and it will last until 31-12-2013.
Individuals (both Greek tax residents and non-residents) buying property in Greece must prove the “origin of wealth” (pothen esches) used to buy the property. In case the individual does not already have the obligation to file income tax returns in Greece and real property is bought, the individual must file an income tax return in the following year to declare the amount spent in purchasing the property, on taxes and other pertinent fees. If the buyer is not in a position to justify the amount spent on the acquisition of the real property (by way, for example, of a bank loan or, especially for non-residents, of money transferred from abroad), the amount spent is considered as income and it is taxed accordingly.
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