Greece again extends real estate VAT exemption

The measure, enacted under Law 5246/2025, published in Greece’s official government gazette on 11 November 2025, keeps in place the option for building constructors to apply a VAT suspension regime for qualifying stock and extends all existing suspensions that were due to expire on 31 December 2025. 

For developers, buyers and advisors, this buys two more years of a highly favourable framework: qualifying sales of new homes remain outside VAT and instead attract only the much lower real estate transfer tax (around 3–3.09%), significantly reducing acquisition costs. 

Read more in our Greek VAT guide.

Background – how Greek VAT works on new buildings

Since 1 January 2006, sales of newly constructed buildings in Greece have, as a rule, fallen within the scope of VAT at the standard rate (now 24%), with certain primary residence reliefs. 

However, in response to the post-crisis collapse of construction activity, Greece introduced a temporary suspension of VAT on new buildings via Law 4646/2019. This allowed developers to opt out of VAT for qualifying properties and instead have sales subject only to real estate transfer tax. The suspension initially ran to 31 December 2022 and was later extended to 31 December 2025. 

The policy objective has been consistent throughout: stimulate residential construction, reduce the cost of buying new homes and attract both domestic and foreign investment into Greek real estate.

What exactly has been extended to 31 December 2026?

Law 5246/2025 makes two key changes for VAT on real estate: 

1. Extension of the election for new stock

   • Building constructors retain the option to place newly constructed, unsold properties into the VAT suspension regime up to 31 December 2026 (previously 31 December 2025).

   • In practice, this applies to properties covered by building permits falling within the relevant legislative window where the developer chooses the suspension instead of standard VAT treatment.

    

2. Extension of existing suspensions

   • Any VAT suspension already granted and in force up to 31 December 2025 is automatically prolonged to 31 December 2026.

   • Developers do not need to “re-elect” for those properties – the extension flows from the law, assuming conditions continue to be met.

    

The regime remains optional for constructors. For each qualifying project/permit, a developer can decide whether to remain in the normal VAT system (charging 24% VAT and recovering input VAT) or to elect into the suspension (no VAT on the sale, but stricter rules around input VAT credits and adjustments).

Part of a wider property tax reform package

The extension of the VAT suspension is not an isolated measure. Law 5246/2025 and related initiatives form part of a broader strategy to rebalance Greece’s housing and property tax system, including: 

• Adjustments to personal income tax and the tax scale for real estate income from 2026;

• Freezing updates to objective property values through at least 2027 to avoid abrupt tax jumps;

• Ongoing suspension of property capital gains tax on transfers through 2026;

• New income tax exemptions for long-term rental of previously vacant or short-term-let properties, to ease housing shortages.

Taken together, these measures aim to support construction, encourage the release of housing stock into the long-term rental market, and maintain fiscal stability while improving access to housing.