Suspension of Value Added Tax on Real Estate Subject to the Provisions on Real Estate Transfer Tax

By Dimitris Piperakis, lawyer, manager, and partner at Piperakis-Kostopoulos Law Firm

According to the provision of Article 37 of Law 5131/2024, the regime concerning the suspension of Value Added Tax (VAT) on real estate, the delivery of which is subject to the provisions on Real Estate Transfer Tax, has been redefined. Specifically, it is stipulated that:
1. A developer of buildings for sale, who is subject to VAT, is entitled to request that the transfer of property delivered pursuant to a notarial deed be subjected to Real Estate Transfer Tax instead of VAT, even if the right provided under paragraph 4a of Article 6 of the VAT Code (Law 2859/2000, Government Gazette A’ 248) had not been exercised prior to the effective date of the present law, under the following conditions:

a) The notarial deed must be accompanied by a Real Estate Transfer Tax declaration;

b) The VAT-liable person must submit, within six (6) months from the publication of this law:

ba) A request for the retroactive suspension of VAT application, accompanied by a list of properties delivered from December 12, 2019, up to the submission date, without VAT imposition, including the amount of VAT corresponding to each property to be adjusted at the time of filing the declaration for the transfer of the property;

bb) An extraordinary VAT return to pay the VAT amount to be adjusted for each property. The time of filing the declaration for the property transfer is considered both the time of adjustment and the starting point for calculating late payment interest in accordance with Article 52 of the Tax Procedure Code (Law 5104/2024, Government Gazette A’ 58).

2. For properties for which the retroactive VAT suspension request under paragraph 1 is submitted, the right to deduct input VAT—calculated pursuant to paragraph 7 of Article 31 of the VAT Code—is suspended, from the time of filing the declaration for the transfer of the respective property.

3. A decision by the Governor of the Independent Authority for Public Revenue shall determine every procedural matter and detail necessary for the implementation of this provision.

Piperakis – Kostopoulos Law Firm has the experience and expertise to provide legal counsel and protection both before and after the occurrence of risk. The issues raised above fall within our areas of expertise, ensuring that we handle the matters entrusted to us with the utmost professionalism and diligence.