What you need to know about the Real Estate Tax that is “blocking” real estate transfers

The abolition of the T.A.P. certificate of no debt for transfer contracts is back in the spotlight in an effort to facilitate and speed up contracts for real estate sales, parental gifts, etc.

An outdated law requires a certificate of no outstanding local tax liabilities to be attached to real estate transactions. The rate is set by decision of the municipal or community council and is uniform throughout the administrative district of the municipality.

The following are subject to real estate tax:

a. all types of real estate located within an approved city plan or within the boundaries of settlements existing in 1923 or within the boundaries of settlements with a population of less than 2,000 inhabitants,

b. all types of buildings located outside the approved city plan or outside the boundaries of settlements existing in 1923 or outside the boundaries of settlements with a population of less than 2,000 inhabitants.

In many municipalities, it can take up to two months to issue a TAP, even without any means of transport. And that’s not all: there are increasing protests from property owners across the country, both those who crowd the municipalities every day to obtain a TAP certificate of no debt (even though they usually have no debt) and those who did not benefit from the favorable provisions that were in force until recently.

Many owners, when requesting a certificate of no outstanding property tax (TAP) for a property transfer, are faced with exorbitant amounts of TAP debt for 12 years, which they are unable to pay! Owners are therefore requesting that the complex process of granting T.A.P. be replaced with a simplified electronic process of area verification by a notary.

1) Which law imposes the payment of T.A.P.?
The payment of T.A.P. is imposed in accordance with the provisions of Article 24, paragraph 17 of Law 2130/93.

2) Which property owners are liable for the T.A.P. debt?
The owners of the following properties:
Electrified properties, where the T.A.P. is collected directly through the electricity provider’s bill.
Non-electrified properties (buildings or plots of land) where the T.A.P. is collected by the municipalities to which they belong and are registered.

3) How necessary is the T.A.P. certificate?
The T.A.P. certificate is absolutely necessary for drawing up contracts and transferring property.

4) How can we pay off the resulting difference (T.A.P.)?
The resulting amount cannot be paid in installments but only in a lump sum at the town hall cashier’s office or by corresponding deposit into the municipality’s bank account.

5) What is required in the event of a change of ownership?
The following is required for a change of ownership:
Submission of an application to the municipality’s Revenue Department
A photocopy of the contract

6) Can I obtain a certificate only for the percentage that corresponds to me in a plot of land?
Yes, provided that the full details of all co-owners are disclosed to the service.

7) How long is the certificate of no outstanding debt valid for? The T.A.P. certificate for notarial use is valid until December 31 of the current year. If no contract is drawn up within the current year, the interested party must return the original certificate obtained the previous year and apply for a renewed T.A.P. certificate for the new year.

8) What applies to properties without electricity? Properties without electricity are NOT exempt from paying Property Tax (Article 24 of Law 2130/1993). Owners must declare their unelectrified properties to the municipality within two months of the interruption for the calculation of municipal fees (ΔΤ) and property tax (Τ.Α.Π.) to the actual liable parties: owner, co-owners, tenant, etc. (Law 25/75 and Article 5(1) of Law 3345/2005 & Article 24(3) of Law 2130/1993).

Late submission of a declaration of Non-Electrified Property results in a charge, DT (at the expense of the user, Article 19 of Law 1080/1980) and TAP (charged to the owner, Article 24(12) of Law 2130/1993) with the imposition of a fine (Article 19 of Law 1080/1980) from the date of discontinuation to the date of declaration.

When the property is used without being connected to the electricity grid, the user (tenant: Article 21(5) of Royal Decree 24/9-20/10-58 or owner: Article 4 of Law 429/1976), while the owner or co-owners are liable for the real estate tax (T.A.P.) (Article 24(3) of Law 2130/1993).

Taxes in favor of local authorities
Local authorities have the right under current legislation to impose various fees and taxes on real estate. Apart from the Real Estate Tax (RET), whose tax framework is determined by the State (Law 2130/1992), the most common fees imposed by municipalities on property owners, the amount of which is determined by the local authorities themselves, are as follows:

1. Municipal Cleaning and Lighting Fees

2. Municipal Tax on Electrified Areas

3. Municipal Potential Fees (for various reasons)

4. Municipal sidewalk occupancy fees.