Forty-nine days

The VAT suspension on new apartments in Greece is not part of the price. It is a date, and every year someone has to move it again.

Early September. At the Thessaloniki International Fair, the government presents its tax package for the coming year. One of its items: the suspension of the 24% VAT on new apartments will continue in 2027 as well. That evening Noa writes in her buyers' WhatsApp group: “As we expected, the suspension continues. No change.”

Noa is building her third project in Kalamaria, Thessaloniki: 16 apartments. The building permit was issued in 2025, and within six months of it she applied to the Greek tax authority to join the suspension. The suspension was born at the end of 2019, in article 39 of Law 4646/2019, which added it to the Greek VAT Code. A developer who builds for sale applies to join it, and the suspension then covers all of the developer's apartments not yet sold. During the suspension the buyer does not pay 24% VAT, but a 3% transfer tax instead. In return, the developer does not offset the VAT paid on construction. At first the suspension was set to run until the end of 2022. It has been extended several times since, most recently until December 31, 2026. Nine of the apartments have already been sold to Israelis under preliminary contracts, at an average price of 214,600 euros. The deeds are planned for April 2027, after the building is completed.

October 18. The bill is published for public consultation. Its article 17 extends the suspension until December 31, 2027. Article 16 adds something Noa was not looking for: a 15% transfer tax on a buyer who is tax resident in a country outside the EU, for deeds signed from July 1, 2027. All nine of her buyers live in Israel.

November 3. One of the buyers, an accountant from Ra'anana, asks the group a simple question: “And if the extension doesn't pass by the end of the year, who pays the VAT?” Noa calls me.

November 4. I read clause 7.1 of her preliminary contract, in the Hebrew translation she sent the buyers: “The price is final and includes VAT, if applicable.” The words “if applicable” were added by her local lawyer in 2025, because since 2020 not a single new apartment sold during the suspension had been charged VAT. It looks like a clause that will never be triggered. But what it means is that if VAT returns, it will come out of the price she has already set, and not out of the buyer's pocket.

Noa is an architect, and before this she built two buildings in Athens. Her schedule has met every milestone so far. Numbers don't frighten her, so she asked for one. On nine contracts at an average price of 214,600 euros, the VAT share of a price that includes it, 24 out of 124, comes to about 374 thousand euros. Her accountant in Thessaloniki pointed out that in such a case part of the VAT she paid on construction would come back to her. Even after that, what remains is a six-figure sum.

The law determines when VAT applies and how it is reported to the tax authority. Under article 39, the decisive point is the handover of the apartment, and in a transaction like Noa's the handover usually happens with the final deed. The law does not determine which of the parties ultimately bears the VAT. The contract determines that. And the law does not extend itself either.

November 6. The bill reaches the parliamentary committee, and the committee majority approves it at the first stage.

November 9. Together with Noa's lawyer in Thessaloniki, we change the template for the seven apartments not yet sold. If VAT applies, it will be added to the price, and the buyer will be able to cancel and get back everything paid within 30 days. The deed will be signed no later than June 30, 2027, and if the deed is delayed because of the developer, she will bear the difference in transfer tax. One buyer from Netanya reads the new wording and says he will wait for the vote. The nine contracts already signed cannot be changed without the buyers' consent, and they stay as they are.

November 12. The bill comes up for debate in the plenary. Forty-nine days remain until December 31. I assume it will pass, because the committee majority has already approved it, and it may already be law by the time you read this. But I don't know what will happen at the end of 2027, when the suspension expires again. And I have another number I didn't need to calculate a month ago: if the deeds are signed after July 1, the transfer tax for each of her buyers will rise from 3% to 15%, that is, by about 25,750 euros.

The clause that may save her profit arrived in the same bill as a new date. “I wrote ‘if applicable’ because it sounded like something that doesn't happen,” Noa said. “Now I have two dates instead of one.”

Developers selling new apartments in Greece have grown used to the suspension as a fixed feature of the market. But relief set for one year at a time is a date, and in a contract signed today that ends with a deed next year, that date is someone's risk. The only question is whether you decided yourselves whose. The suspension is extended anew every year. Your contract is signed once.

The question I would ask in your place

• On what date will each of my deeds be signed? Is it before December 31, and for buyers living outside the EU, also before July 1, 2027?
• What does my preliminary contract say about VAT, “included,” “plus” or “if applicable,” and who bears it under that wording?
• If the suspension is not extended at the end of next year, how much will it cost me after offsetting the VAT on construction, and from which line in the budget will I pay it?

Stories are based on real situations, with identifying details changed. Not legal advice.

Translated from the Hebrew original. עברית

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