A storm of reactions was caused by the prime minister’s decision to quintuple the transfer tax for buyers outside the European Union.
In a move that surprised the market, the government announced the increase of the tax from 3% to 15%, for buyers from countries such as Israel and Turkey from July 1, 2027.
The step aims to increase the homes that will be made available to Greek buyers, while the economic staff hopes that it will also contribute to smoothing prices.
However, at a time when signs of fatigue in demand for luxury properties from foreign buyers are already appearing, market executives, legal circles and investors fear the worst.
They speak of a failed measure that will cause a series of chain effects, negatively affecting a sector that not only finances the construction of new homes but also apartments resulting from the change of use of properties.
“In a market where the cost of a transaction is already high (lawyers, notaries, etc.) an additional tax burden of this magnitude will act as a strong disincentive for the buyer,” market factors tell Euro2day.gr
“Besides, the substantive answer to the housing problem lies not in restricting buyers, but in increasing the supply of homes,” they add.
“Violent intervention” in the market
On social media, the messages against the measure are numerous - and at times aggressive. Not a few believe that this is a tax that will not be collected given that no foreign buyer outside the EU has reason to invest in Greece and pay a 15% transfer tax.
Savvas Savvaidis, Chairman & CEO of Greece Sotheby's International Realty, states that the measure “constitutes a violent intervention in the rules of the market” and will bring the opposite of what is expected, precisely because the extremely limited housing stock will be restricted even further by the artificial contraction of demand.
“On the Athenian Riviera and on the islands, projects are financed through presales, and the buyers in presales come predominantly from third countries. A tax that shrinks this demand squeezes developers’ margins, while their costs remain the same. The developer freezes the next project,” explains Mr. Savvaidis.
“Fewer projects in two years means less supply and higher prices for everyone. The blow will first hit holiday homes and more broadly the luxury housing market, that is, precisely the segment that creates jobs on the islands and brings foreign exchange into the country,” he adds.
In the coming period, strong pressure is expected to be exerted on the government with the aim of changing the measure.
“I wonder whether this contributes to the development of the economy and also to what extent it is the best path for attracting investments from non-EU countries,” wrote Yiannos Grammatidis, President of the Corporate Social Responsibility Institute (CRI) and honorary President of the American-Hellenic Chamber of Commerce, on LinkedIn.
“Shouldn’t the government reconsider it?” he adds.