Which property sales are targeted by the tax authorities

By Prokopis Hadjinikolou

The tax office focuses on the purchase and sale of real estate in the last quarter of the year, with the aim of establishing whether criminal acts have been committed. In particular, real estate sales that were made in whole or in part with cash will be audited. And this as from the new year, buying and selling real estate with cash is prohibited.

AADE auditors will look for property buyers who rushed to take advantage and buy property with cash before the new provisions were implemented. If it is found that the money given is undeclared they will be asked to pay steep fines, while depending on the amount of cash that changed hands, the case will be forwarded to the prosecutors to determine if the money comes from criminal activities.

However, the audit of the tax office will not stop here. Records of purchases and sales made in cash for the last five years will be sought. It is noted that out of a total of 338,511 real estate transfer declarations for a total price of 27.7 billion euros, 84,354 were made in whole or in part with cash. Specifically:

– in 42,613 declarations the price was paid exclusively in cash for a total amount of 462.495 million euros, while

– in 41,741 declarations the price was partially paid in cash totaling €2.980 billion.

As mentioned above, the draft law that will be submitted to Parliament at the end of the month will, among other things, provide for fines ranging from 10,000 to 500,000 euros for those who buy a property with cash from January 1, 2024. Naturally, the contract in these cases will be cancelled. The new provision that will be included in the tax bill will provide for the following:

1. A contract for the purchase and sale of real estate that records an advance payment, partial or total payment in cash is void and its transfer is prohibited.

2. Violators shall be fined equal to 10% of the price paid in cash.

3. The fine is at least 10,000 and up to 500,000 euros, for each violation. For example, in case of buying and selling a property worth 100,000 euros the contract will be canceled and the taxpayers will be faced with the imposition of a fine of 10,000 euros which is 10% of the cash price (and minimum fine). Even if the purchase price is 50,000 euros, the fine will be 10,000 euros.

What will change in real estate?

– Imposed from 01/01/2024, VAT and accommodation fees applicable to hotels – rooms for rent on the income from short-term rental of three or more Airbnb-type properties.

– Compulsory insurance against natural disasters for medium and large enterprises.