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Kosmidis & Partners, solicitors

Partnering international businesses in Greece

Inheritance Tax in Greece - legal information from Greek Lawyers Kosmidis & Partners

Inheritance tax in Greece recently underwent a major change, mainly in respect of the tax levied on the inheritance of great value for close relatives. This amendment was introduced by law no. 3815/2010, which amended art. 29 of the code on inheritance, gifts, tax, parental benefits and profits from lottery (law no. 2961/2001). In particular:

According to article 29 par. 1 of law no. 2961/2001, the beneficiaries of the inherited property (heirs, legatees, shareholders and any persons who acquire property through inheritance) are classified into three categories:

1. The first category consists of a) the spouse of the deceased, b) the descendants of the first degree, c) the descendants by blood of the second degree d) the ascendants by blood of the first degree. In particular, with regard to the adopted descendants, the law stipulates that they are to be treated as natural children. In exceptional circumstances, the Head of the Public Financial Services may consider that such children cannot be treated as relatives, if he is informed that the adoption process was carried out with the sole purpose of circumventing the provisions of law no.2961/2001.
2. The second category includes a) descendants of the third and subsequent degrees, b) ascendants of the second and subsequent degrees, c) voluntarily or judicially recognized children against the ascendants of the father who acknowledged them, d) descendants of the child that was voluntarily or judicially recognized against the father who recognized the former against the former's ascendants, e) the siblings, f) the collateral blood relatives of the third degree, g) the stepfathers and stepmothers, h) children from the previous marriage of the spouse, i) the children by marriage (groom, bride) and j) the ascendants by marriage (father-in-law, mother-in-law).
3. The third category consists of any other person.

Pursuant to par. 2 of art. 29 of law no. 2961/2001, assets acquired because of death are hereby levied tax in accordance to the following tax scale:

1st category

2nd category

In relation to the taxation of real estate property, the "objective value" of the real estate is taken into account. The "objective value" is deemed to amount to the value which arises on the basis of certain objective evaluative information, such as i.e. the area in which the real estate is situated, its size, its age etc. In order to estimate the value of a real estate one may refer to official charts which can be found in the Public Financial Services of Greece; the value is calculated (and is binding) subject to these charts which are kept up to date usually every few years from the Ministry of Finance.

Calculation example: A, whose closest relative was his son, B, and his brother, C, dies and pursuant to his legally valid will, he bequeaths to B, a flat of an "objective value" of 160.000 € and also bequeaths to C another flat of an "objective value: of 50.000 €.

According to the provisions of law no. 2961/2001, as currently in force, the inheritance tax which B and C will be obliged to pay is calculated in the following way:

In respect of B: real estate value of 150.000 €. We detract 150.000 € from this amount, which, as we mentioned above, is exempt from tax. The amount of 10.000 € which remains, will be taxed at 1%. Thus, B will have to pay the amount of 100 €.

In respect of C: real estate value of 50.000 €. We detract 30.000 € from this amount, which is exempt from tax in relation to the second category of heirs. The amount of 20.000 € which remains, will be taxed at 5%. Thus, C will have to pay 1.000 € as inheritance tax.

The third category of heirs, which includes the rest of the relatives besides those of the first two categories and any other third person, is levied tax in accordance to the following tax scale:

Calculation example: A bequeathed by will to his friend, B, a real estate valued at 90.000 €. According to the above chart, provided B accepts the inheritance, she will have to pay: for the amount of 72.000 €, tax at 13.200 €. The remaining sum of 18.000€ (= 90.000€ - 72.000€),will be charged at a rate of 30% and so tax reaches to the amount 5.400 €. Consequently, B is obliged to pay a total tax amount of 13.200 + 5.400 = 18.600 € for an inheritance with a value of 90.000 €.

Moreover, law no. 3815/2010 has significantly amended par. 4 of art. 29 law no. 2961/2001, which now provides that funds acquired by cause of death are subject to tax which is calculated independently at a rate of 10%, in regard to heirs of the 1st category, and at a rate of 20% in respect of heirs falling within the second category.