Finance staff is considering suspending the introduction of the 24% VAT on construction for another two years in order to maintain strong growth and further stimulate construction. According to the legislation, VAT on real estate is “frozen” until the end of 2022, and the government intends to remain “frozen” until the end of 2024.

Our country has the option to re-suspend VAT on construction, finance officials said, noting that the government’s decision in 2019 has spurred the buying and selling of real estate, as well as the construction of new ones.

From 2025, the government has the option to reduce VAT on real estate from 24% to 13% or even zero. Recent EU decision. permanently secures Greece’s ability to apply special reduced rates, which the Greek government will be able to do if financial conditions permit. What is important, Finance Ministry sources say, is that our country can now act when it decides to apply reduced VAT rates.

It is noted that VAT is levied on sales of new buildings. From January 2025, and if extended for the next two years, VAT on new buildings can either be capped at 13%, or the country can ask to join real estate exemptions, following the example of Luxembourg, which has a zero rate.

From 2025, the government has the option to reduce VAT on real estate from 24% to 13% or even zero.

At the same time, the government is considering extending the tax deduction for those who renovate their property. According to the law, property owners can save up to 1,600 euros in the tax due to them if they have repaired their property and have the appropriate invoices. The discount is 40% of expenses with a maximum limit (expenses) of 16,000 euros. Thus, taxpayers for works of about 16,000 euros will receive a 40% discount, that is, 6,400 euros, the amount of which will be evenly distributed over four years. The cost of materials is excluded from the discount. To be eligible for a tax reduction, the parties concerned must have the appropriate receipts, and indeed the payment of the amount must be made through the banking system. Expenses they made in the previous year must be reported in the appropriate code on Form E1 along with their tax returns. Especially:

The expenses that the owners of houses and other buildings will incur in the period from 01/01/2020 to 12/31/2022 in connection with the payment for services related to the energy, functional and aesthetic modernization of their property will reduce the income of the owners. tax on 40% of their amount over the next four years. That is, 40% of the amount of expenses that will be incurred in each of 2020, 2021 and 2022 will be distributed equally in each of the next 4 years and will reduce the income tax that will be charged to the owner in each of the next 4 years. For example, if expenses are incurred in 2020, 40% of them will be spread evenly over 2021, 2022, 2023 and 2024. The amount of expenses corresponding to each of these subsequent years, i.e. 1/4 of the 40% expenses will reduce the personal income tax assessed to the taxable owner in that year.

– When calculating the discount, only the cost of labor will be taken into account, and not the cost of supplying materials.

– The prerequisites for deducting 40% of energy, functional and aesthetic building retrofit costs from the owner’s income tax over the next 4 years are that the buildings in respect of which the costs are incurred are not yet included or are not going to join the building retrofit program .