Greek Government Weighs Freeze on Property Tax Values to Tackle Housing Crisis

The Ministry of National Economy and Finance is considering the prospect of freezing property tax values for at least another year. The government’s goal is that this measure, combined with other interventions, will help address Greece’s housing crisis.

Property values were last adjusted three years ago, but since then, market prices have risen significantly. Another increase in property tax values to match current market levels would likely trigger a further spike in real estate prices, exacerbating the already severe housing problem.

If the proposal to freeze tax values is approved, this would complement the housing package announced by Prime Minister Kyriakos Mistotakis at the recent Thessaloniki International Fair (TIF).

At the same time, the government is considering extending the suspension of VAT on new properties, which is set to expire at the end of the year, as well as the suspension of the capital gains tax on real estate.

Both suspensions would continue through 2025. The initial suspension of VAT, introduced in 2019, significantly boosted property sales and new construction during that period, while the capital gains tax freeze had a similarly positive effect.

Market Overview

Strong demand for housing continues to drive up property prices, as indicated by recent market data. According to the Bank of Greece, apartment prices in the second quarter of 2024 rose by 9.2% compared to the same period in 2023, though this was a slowdown from the 13.8% increase recorded in the previous year.

Prices for new apartments, up to five years old, rose by 10.7% in the second quarter of 2024, while older apartments, over five years, saw an 8.3% increase.

Regionally, apartment prices in Athens increased by 9.1% in the second quarter of 2024 compared to the same period in 2023. What is more, Thessaloniki saw a 12.1% rise, while prices in other major cities increased by 7.3%, whereas in rural areas, prices rose by 10.4%.

On a national level, property prices remain slightly below their 2008 peak. On average since the real estate market began to recover in 2017, prices have increased by 69% across the country, with a rise of 88% in Attica and 78% in Thessaloniki.