How Does Inheritance Tax in Greece Work?
Learn how Greek inheritance tax liability is determined by the heir's family connection, residency status, and where the inherited assets are located.
Inheritance tax in Greece is levied on the value of a deceased person’s assets transferred to their heirs. The amount of tax owed depends on the relationship between the deceased and the heir, the value of the inheritance, and the location of the assets. The Greek tax system categorizes heirs into three groups based on kinship, with each category having different tax rates and exemptions.
The tax applies to both movable and immovable property, and the rules differ based on the tax residency of the deceased and the heir. The process involves a formal declaration to the Greek tax authorities, and specific deadlines must be met to avoid penalties.
Determining Tax Liability
The obligation to pay inheritance tax in Greece is determined by the tax residency of the deceased and the heir, and the location of the assets. If the deceased was a tax resident of Greece at the time of death, their worldwide assets are subject to Greek inheritance tax. Similarly, a Greek tax resident who inherits assets is subject to tax on those assets, regardless of their location.
When neither the deceased nor the heir is a Greek tax resident, the tax liability is limited to assets located within Greece. This is known as the “situs” rule, where tax is applied based on the property’s physical location. Taxable assets in this scenario include real estate, bank accounts in Greek institutions, and shares in Greek companies. Movable assets located outside of Greece are not subject to Greek inheritance tax in this case.
An exception exists for Greek nationals who were residing abroad. If a Greek national dies while living outside of Greece, their movable assets located abroad may still be subject to Greek inheritance tax. This rule applies unless the individual had been living abroad for at least ten consecutive years before their death.
Tax Rates and Exemptions
The Greek inheritance tax system is structured around three categories of beneficiaries, with rates ranging from 1% to 40% depending on the category and the value of the inheritance. The closer the relationship between the heir and the deceased, the more favorable the tax treatment.
Category A includes the closest relatives: spouses, children, grandchildren, and parents. These heirs have a tax-free allowance of €150,000 and rates from 1% to 10%. A special tax exemption of €400,000 per beneficiary applies when the heir is a surviving spouse from a marriage of at least five years, or a minor child of the deceased.
Category B consists of a wider range of relatives, including great-grandchildren, grandparents, siblings, nieces, nephews, uncles, aunts, and parents-in-law. For these heirs, the tax-free allowance is €30,000, and tax rates range from 5% to 20%.
Category C includes all other individuals not covered in the first two categories, such as friends or distant relatives. This group has a tax-free allowance of €6,000 and is subject to the highest tax rates, which range from 20% to 40%.
Greece also offers parental grants (goniki parochi), which are gifts from parents to their children treated more favorably than standard inheritances. For monetary gifts between close relatives like spouses, parents, children, and grandchildren, there is a tax exemption for amounts up to €800,000.
Required Information and Documentation
Non-resident heirs must obtain a Greek Tax Identification Number (AFM) for all tax-related transactions. They must also appoint a tax representative in Greece to act on their behalf with the tax authorities.
To file the inheritance tax declaration, heirs must provide personal details, a comprehensive inventory of all inherited assets, and their valuation. Supporting documents include:
- The death certificate
- A certificate of closest relatives to establish the relationship
- A copy of the will, if one exists
- Proof of ownership for assets, such as property title deeds, bank statements, or share certificates
The valuation of real estate is based on the “objective value” system (antikeimeniki axia). This system uses predetermined values set by the tax authorities for properties in different areas, rather than their market value. Heirs must use this official valuation when declaring real estate assets.
The Inheritance Tax Declaration Process
The inheritance tax declaration must be submitted to the appropriate Greek Tax Office (DOY), with jurisdiction determined by the deceased’s last known residence. For non-residents, this may be the tax office responsible for the area where the inherited property is located.
For heirs who are residents of Greece, the declaration must be submitted within six months of the date of death. For non-resident heirs, the deadline is extended to twelve months. Late submissions can result in penalties and interest charges.
After the declaration is submitted, the tax office reviews the information and issues a tax assessment notice. This notice details the amount of inheritance tax due and provides a deadline for payment.
Heirs can pay the assessed tax in a lump sum or arrange for payment in installments. The specific options available will be outlined in the tax assessment notice, and payment is necessary to ensure that the transfer of the inherited assets can be legally completed.