Great news for parents looking to gift Greek real estate to their children.

Since October 1, 2021, the Greek government has introduced a significant tax exemption. Now, parents wishing to transfer any property to their children, including real estate, cash, and shares in a company, will not have to pay transfer tax when gifting property valued up to 800,000 euros. The 800,000 euro tax exemption from parents applies to each parent gifting property to each child. In other words, two parents can gift property to their two children worth up to 3.2 million euros (800,000 x 4) without paying transfer tax, as each parent can gift property worth up to 1.6 million euros to two children tax-free.

The same applies in reverse, even if such transfers between children and parents are rare. Considering the value of property owned by the average Greek family, which is less than 800,000 euros, the new tax-free amounts will cover almost every family in Greece. The previous tax-free amount was 150,000 euros, making the new tax-free threshold of 800,000 euros seem like an extraordinary measure.

Until now, the tax-free limit for family gifts was the same as the tax-free limit for inheritance. In both cases, the amount was 150,000 euros. As of October 1, 2021, the tax-free limit for family gifts skyrockets to 800,000 euros, while the tax-free limit for inheritance remains at 150,000 euros.

This implies that when a parent is asked whether it is better to gift property to their children now or leave it to them after the parents pass away, the answer is that it is more tax-efficient to gift the property now, as the tax-free limit is very high (800,000 euros), compared to the 150,000 euros tax-free limit for inheritance.

The tax-free limit also applies to free transfers of gifts from children to parents.

This can be done if the child first gifts the parent property or cash, and then the parent can further gift it to another child. Even grandparents can transfer property or cash to their grandchildren without paying a transfer tax up to the amount of 800,000 euros.

However, there is a catch when it comes to cash transfers. Any free gift from a parent to a child, from a child to a parent, or between a grandparent and a grandchild must be processed through a bank. Therefore, the amount that will be gifted must exist in the bank account of the person making the gift and must be transferred through a bank transaction to the account of the person receiving the cash gift.

Additionally, a further condition is that the person making the cash gift must have declared this amount as income for the past several years. The higher the amount of the gift, the more likely it is that the Greek tax authorities will request information on whether the person making the gift has sufficient tax returns for the past many years to justify the acquisition of such funds.

Another way to justify the source of funds for a gift is the sale of property in previous years by the person making the gratuitous gift. The gift of real estate in Greece is carried out through a power of attorney for a gratuitous gift, called "goniki parohi," usually drafted by lawyers and executed before a notary. The power of attorney must then be registered in the local real estate registry, which will make it valid against any third party. If the gift involves cash or bank funds, both parties sign and submit tax declarations to the tax office.