Buying a New Apartment in Greece: VAT Versus Transfer Tax, the VAT Suspension and What It Means for the Buyer

1Does a buyer of a new apartment in Greece pay VAT or transfer tax?

The answer depends on the developer's choice. By default, the first sale of a new building by a developer is subject to VAT at 24%. But if the developer has joined the VAT suspension regime, the buyer pays instead transfer tax at 3%. A municipal levy of 3% is also imposed on the tax, so the effective rate is 3.09% (as of October 2026).

VAT on new buildings in Greece applies to buildings whose building permit was issued from 2006 onwards. A "second-hand" apartment sold by a private individual is in any case taxed with transfer tax and not VAT. The question is therefore relevant mainly to someone buying from a developer: an apartment in a new building, an off-plan apartment or a unit built in recent years that has not yet been sold.

The difference in cost is very large. In an example published in the Greek financial press, on a new apartment worth EUR 300,000 the final price with 24% VAT reaches EUR 372,000. With transfer tax alone it reaches EUR 309,000, a saving of EUR 63,000 for the buyer.

2How does the VAT suspension mechanism work, and why doesn't every developer choose it?

The suspension is a voluntary arrangement that the developer requests, and not an exemption that the buyer can demand. The mechanism was established in article 39 of Law 4646/2019, which added it to the Greek VAT law. It entered into force in 2020 and has been extended repeatedly since. The main points:

• An application to the tax authority: the developer files an application with the local tax office (ΔΟΥ), and the office grants the suspension on the basis of the list of unsold properties.
• All or nothing: the suspension applies to all of the developer's unsold properties under the relevant permits. The developer cannot choose certain apartments and sell the rest with VAT.
• Transfer tax instead of VAT: during the suspension period every sale is taxed with transfer tax, and the buyer is the one who pays it.
• Freezing of input VAT deduction: as long as the suspension is in force, the developer does not deduct the VAT paid on materials, subcontractors and services.
• Refund of VAT previously deducted: input VAT that the developer deducted before the suspension is refunded on delivery of each property, in a special declaration before the transfer tax return is filed. The developer may deduct this amount as an expense for income tax purposes.

Hence the economic logic. The suspension greatly reduces the price for the buyer, but the developer's costs rise because he or she loses input VAT. A developer who invested heavily in construction may pass part of the cost on into the price. So when comparing projects it is not enough to check the "price before tax". You need to compare the total cost to the buyer, including the tax that will actually apply.

3How do you check under which tax regime the apartment is actually sold?

Do not settle for the statement of the broker or the salesperson. Request documents and anchor the position in the contract. The checklist we insist on:

1. The suspension decision: request a copy of the tax office decision that granted the developer the suspension, and check that the building permit for your building is included in it. A permit issued after the date of the application is not automatically included, and the developer must file a new application for it.
2. The date of the final deed: compare the expected date of signing the notarial deed with the date the suspension ends. Transfer tax is paid close to signing the deed, so this date is the one that decides.
3. Wording of the price: the contract must state expressly whether the price includes VAT, or whether the transaction is taxed with transfer tax and the price does not include VAT.
4. Allocation of risk: add a clause providing that if the suspension expires or is cancelled before the deed, any VAT that applies will be paid by the developer, or the buyer will have a right to cancel and receive his or her money back.
5. Early payments: in an off-plan purchase, check how deposits and stage payments are treated. Confirm with a Greek tax adviser that there is no VAT exposure on payments made before the deed.
6. Objective value: check the property's objective value in advance. Transfer tax is calculated on the higher of it and the price, and it is worth knowing the exact amount in advance.

4What is expected in 2027: extension of the suspension and a higher transfer tax for buyers from outside the Union

As of 29 October 2026, the suspension is in force until 31.12.2026. In October a tax bill implementing the measures announced by the government at the Thessaloniki International Fair (ΔΕΘ) was published for public consultation. Comments are received until 1 November 2026, and the intention is to pass the law in the same month. For our purposes it contains three relevant provisions:

The third provision is particularly important for Israeli buyers. According to reports, the increase will apply to residential apartments only and to individuals only, and not to companies. It was also reported that there will be exemptions, for example for ethnic Greeks and long-standing residents. There is an ambiguity that has not yet been resolved: the summary of the bill speaks of individuals who are not tax residents in the Union and the European Economic Area, while some reports speak of citizenship. The difference is material, for example, for an Israeli who also holds a European passport but is a tax resident of Israel. Until the final text is published in the Greek Government Gazette (ΦΕΚ), it is not right to draw practical conclusions.

In practical terms: if the increase is enacted as reported, a deed signed by 30.6.2027 will be taxed at the current rate. For a new apartment from a developer holding a VAT suspension, this means that the date of the deed may decide between a tax of about 3% and a tax of about 15%. In an off-plan purchase this is another reason to set in the contract a clear deed date and conditions for bringing it forward.

5What additional costs are there in buying a new apartment from a developer?

Even when the tax is low there are additional transaction costs, and most of them also apply to a new apartment:

• Notary fees: under a graduated tariff set by decree. 0.8% up to EUR 120,000, 0.7% on the portion between EUR 120,000 and EUR 380,000, and 0.65% on the portion between EUR 380,000 and EUR 2 million. To this are added a fixed fee and a per-page charge.
• Registration in the cadastre (Ktimatologio): a proportional fee of 5 per thousand (0.5%) of the property's value plus EUR 20 for each registration, under a decision of January 2026.
• The buyer's lawyer: the fee is not fixed by law. In the market it is customary to speak of about 1% to 2% of the value, depending on the scope of work.
• Engineer's certificate: even in a new building the deed requires an engineer's certificate on the legality of construction, and it is worth adding to it an independent inspection on behalf of the buyer.
• Brokerage fees: if there is a broker, the commission is set in the agreement, and VAT is added to it.

6The Israeli aspect: reporting, the tax treaty and transferring the funds

An Israeli resident is taxed on income from all over the world. Rental income from an apartment in Greece and the gain from selling it are therefore relevant also to the Israel Tax Authority. Between Israel and Greece there is a convention for the avoidance of double taxation. As a rule, the convention allows the state in which the property is located to tax income from real property, and in Israel a credit is given for the tax paid in Greece. One point worth noting: as long as the Greek tax on property gains is suspended, a gain on sale will not be taxed in Greece, and so there will also be no Greek tax to offset against it in Israel. This planning is worth doing with an Israeli accountant already at the purchase stage, including the question of whether to buy as an individual or through a corporation.

On transferring the funds: payment to the developer should pass through the banking system, from an account in the buyer's name, with full documentation of the source of funds. The Israeli bank and the Greek bank will ask for this documentation, and it will also serve in the future, when you sell and need to prove the cost of purchase. A foreign buyer also needs a Greek tax identification number (AFM), and in most cases also a bank account in Greece.

7What to do before signing, and how we accompany the process

Before you pay a deposit to the developer, we check the VAT suspension decision and the permit to which it applies, and calculate the total cost according to the expected deed date. In negotiation we include in the contract clauses that allocate the VAT risk and the risk of the higher transfer tax. We also coordinate with the Greek lawyer, the engineer and the notary so that the deed is signed at the right time, and in parallel with the Israeli accountant on reporting in Israel. The goal is that you know in advance, in shekels and in euros, what the transaction will cost, and are not surprised on the day of signing.

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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.