Buying Property in Crete - Objective Tax Value

The Notary calculates the Objective Tax Value for Crete Property, but what is it?

Because there has always been a relatively high Property Purchase Tax rate in Greece, there has always been a history of buyers and sellers cooperating to minimise the contract price and thus the amount of tax that has to be paid on transfer. To counter this the tax authorities have an assessment method for land and houses, inside and outside the village plan, close or far away from the sea, with olive trees or not, and so on. There are laid down formulae that are applied to the square meterage of the property that will determine this Objective Tax Value. It takes no account of the condition of a house, but is a general catch all formula designed to give the Greek government the amount of money they need to collect from property sales.

In general, but not always, the Objective Tax Value is less than the real value. In some cases it can be as little as 20% of the real value. Almost all contracts are written at a value that is very close to the OTV. If for example the OTV is 50,000 euros and the real value is 100,000 euros the tax saving of writing the contract at the OTV is approximately 5,500 euros. Whilst the government have commited to change the system to one which is more in line with Stamp Duty at a low rate, it has still not happened.

The price that is written in the Contract is for negotiation between the parties and their lawyers.