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Significance of Amendments to Special Duty Law
The Special Duty law regarding property in Greece was further amended by Statutory Act dated 16 December 2011. The Ministry of Finance provided clarifications regarding the new provisions by ministerial decision 1251/2011. Taxand Greece considers the tax implication of this amendment for property taxpayers in Greece in 2012.
The main amendments include the following:
Reduction of the Special Duty co-efficient imposed on certain non-residential buildings
In particular, the applicable co-efficient of the Special Duty imposed on buildings of non-residential use with a surface exceeding 1,000 sq. m. will be reduced by:
- 30 percent for the part of the building surface exceeding 1,000 sq m
- 60 percent for the part of the building surface exceeding 2,000 sq m
Special Duty for the year 2012
For the year 2012, the Special Duty will fall upon the owner of a building, or the holder of usufruct rights, as the case may be, on 31 March 2012 (instead of 28 April 2012) and it will be paid in five instalments from April 2012 to January 2013.
Special Duty of 2011 imposed on the basis of wrong data
With respect to Special Duty charged on electricity bills issued in 2011 on the basis of wrong data (e.g. surface of the building and/or applicable rate per sq m etc.), any interested entity may apply for the correction of this data until 20 January 2012 by filing an application to the competent Municipality.
Financial leasing agreements; party to be burdened with the Special Duty
By way of exception from the main rule applicable to leased buildings, in the case of financial leasing agreements giving the right to the lessee to purchase the property upon termination of the agreement, it is up to the contracting parties to agree who will be burdened with the respective Special Duty.
Exemption for common areas of buildings used exclusively for tourist/hotel activities
The common areas of buildings used exclusively for tourist/hotel activities (e.g reception halls, w/c) are exempt from the Special Duty. It is now explicitly stated in the law governing the Special Duty that common areas are pre-determined, namely they are considered to amount to 35 percent of the buildings subject to the Special Duty. Therefore, 5 percent of the total surface of the buildings used exclusively for tourist/hotel activities shall be exempt from the Special Duty.
For 2012, the Special Duty will fall on the owner of a building, or the holder of usufruct rights as the case may be, as of 31 March 2012 (instead of 28 April 2012). Any difference in the Special Duty paid for 2011 will be set off against the Special Duty for the year 2012 and any negative balance arising out of this arrangement shall be refunded. In the absence of any agreement, the Special Duty shall burden the owner of the building. Taxpayers in Greece must bear this in mind when considering their tax position as far as Real Estate is concerned.
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T. +30210 69 67 000