Brussels, 19 February 2009
Direct Taxation: The European Commission refers Greece to the European Court of Justice over discriminatory tax provisions for the acquisition of a first residential real estate in Greece
The European Commission has decided to refer Greece to the European Court of Justice for the fiscal treatment applied to the acquisition of a first residential real estate in its territory. The Greek legislation exempts permanent residents in Greece from real estate transfer tax on the purchase of their first residential property, but does not grant the same exemption to first-time buyers who do not live permanently in Greece, but intend to do so in the future. Moreover, under certain circumstances, the Greek rules, provide for an exemption from real estate transfer tax to Greek nationals living abroad when they acquire their first residential property in Greece, while the same exemption is not offered to foreign nationals.
The Commission considers that the exemptions provided in the Greek legislation violate the general discrimination ban, as well as the free movement of persons and the freedom of establishment laid down in the EC Treaty and in the EEA Agreement.
The Commission is of the opinion that Greece accords more advantageous tax treatment to persons who purchase their first real estate in Greece with a view to living there permanently, compared to those who merely acquire such real estate for investment purposes. This difference in treatment may be justified by the desire to promote acquisition of housing and prevent or, at least, reduce speculation. However, the same treatment must be granted to all first-time residential buyers who intend to live in the property, whether they are already permanently living in Greece at the time of purchase or not.
In addition, the Commission considers that Greece discriminates on the basis of nationality insofar as non-resident Greek nationals are, under certain circumstances, exempt from paying real estate transfer tax in Greece when acquiring a first real estate there, while non-residents who are not Greek nationals do not enjoy such an exemption.
Given that the above Greek tax rules were not amended to comply with the reasoned opinion sent to Greece on 23 September 2008 (IP/08/1364), the Commission has decided to refer these cases to the Court of Justice.
The Commission's case reference number is 2007/4319.
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