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All Market News: Spanish Real Estate Intelligence

Tax relief for REICs – The 0.75% tax rate is abolished according to new law

According to the draft tax law, the Ministry of Finance is abolishing the 0.75% tax rate imposed on REICs in 2016 by the previous government.

Following the entry into force of the draft law, real estate investment companies are required to pay a tax at a rate of 10% of each European Central Bank's applicable interest rate (reference rate) plus 1 percentage point and calculated at average of their investments, plus cash, at current prices, as shown in the six-month investment tables.

According to real estate market executives, due to the multiplication of this ratio on the assets (cash, real estate) of REICs (from 0.105 to 0.75%), REICs have lost their competitive edge, leading foreign investors to focus on real estate, competing platforms and companies abroad. Under the current regime, which will change after the bill is passed, REICs are the only corporations that are taxed on property and not on income.

Boom of new building permits in Athens and islands

The Greek real estate market expects a boom of new building permits in the coming years, as a result of the 24% VAT suspension measure on newly constructed buildings, the economic recovery and the buying interest by international funds.

In this context, the most licenses will concern high demand areas, such as the southern suburbs and central Athens, mainly around neighborhoods near tourist attractions.

Significant construction activity is also planned for the suburbs where new subway stations will be built, as well as for the high tourist areas, such as the Cyclades, Crete, Rhodes, Corfu and Halkidiki, for example.

Meanwhile, according to August data, the course of construction activity is showing signs of accelerating. As reported by the Hellenic Statistical Authority (ELSTAT), 1,300 building permits were issued in August. During the same period, private building activity increased by 28.3% in the number of building permits, by 35.3% in surface area and by 37.8% in volume. Among the regions with the strongest activity, are Attica with almost 80% and Southern Aegean (Cyclades) with 70%.

Foreign demand for real estate increased by 25%

Compared to last year, there is a 25% increase in demand for Real Estate property in Greece by prospective foreign purchasers.

Americans, Germans and English are the “driving force” of investment in the Greek housing market, according to a Spitogatos real estate ad analysis, followed by the Dutch. Chinese buyers are fifth on the list, confirming their steady demand for residential real estate. Currently, the most popular areas to look for real estate are Tinos, Kifissia and Glyfada. The top ten is topped by French, Australians, Swedes, Bulgarians and Canadians.

The ranking is based on the countries that perform most of the home searches for sale in Greece. In this context, Americans, who emerge as the most mobile potential buyers, are seeking real estate mainly in Santorini, Glyfada and Mykonos. Similarly, the Germans are more interested in buying property in northern Greece, focusing on Thessaloniki's city center, Kalamaria and Kavala. The English have maintained a high level of buyer interest, despite the 'turmoil' caused by the impending Brexit. According to Spitogatos figures, they are focusing their search on Rhodes, Glyfada and Kolonaki. The Dutch choose Athens and the areas of Pagrati, Mets-Kalimarmaro and Neos Kosmos. The French are interested in real estate on Paros and Syros islands, as well as Athens, ​​Kolonaki and Lycabettus. Australians seem to prefer the southern suburbs of Athens, Glyfada and Kalamaki as well as Santorini island, while Swedes “vote” for Rhodes, Kassandra Halkidiki and Volos (Pelion). Bulgarians are looking for real estate in Kavala and Sithonia, Halkidiki, Finally, Canadians prefer Kalamata, Glyfada and Santorini.