Inheritance Taxes in Greece--2010 Update--by Christos Iliopoulos, attorney at the Supreme Court of Greece, LL.M.

Inheritance Taxes in Greece--
2010 Update

by Christos Iliopoulos

As expected, the Greek government introduced legislation according to which the rates of taxes for inheritance (and parental donation to children) have been seriously modified. The changes take effect from 19 January 2010, with regards to inheritance taxes and from 8 January 2010, as far as the parental donations are concerned.

Before we outline the basic new rates, it must be noted that for previous inheritance cases different legal regimes and rates apply, depending on the date of the passing of the deceased. One thing is for sure, however: inheritance taxes are paid only on properties of deceased persons who died from January 1st, 1990 until today. If the deceased passed away before 1-1-1990, the heirs do not pay any inheritance tax at all, irrespective of the value of the inherited properties.

Category-A Heirs

For inheritances after the 19th of January 2010, the surviving spouse, married to the deceased for at least five years, does not pay tax on inherited real estate property worth up to 400,000 euros tax value. This also applies to the minor children of the deceased (children under 18 years old). However, the surviving spouse and the children, irrespective of their age, do pay inheritance taxes at a rate of 10% for cash which they inherit.

Adult children and parents of the deceased do not pay tax on an inheritance share worth up to 150,000 euros of tax value. They pay an inheritance tax of only 1% on the next 150,000 euros of their share. This means that for an inherited share of real estate property worth 300,000 euros, the parents and the adult children of the deceased will pay 1,500 euros of inheritance tax, for cases after the 19th of January 2010.

For the next 300,000 euros worth of real estate, the first category of heirs (children and parents of the deceased) must pay 5% inheritance tax. In other words, for a share of 600,000 euros of property, the inheritance tax for this category of heirs is 16,500 euros.

Finally, for an inherited share which is worth more than 600,000 euros, each heir pays, for the value above the 600,000 euros, 10% inheritance tax.

An example: if the category-A heir of a deceased who died after the 19th of Jan. 2010 inherits real estate property worth 800,000 euros, this heir will pay no tax on the first 150,000 euros, he/she will pay 1,500 euros tax on the next 150,000 euros, he/she will pay another 15,000 euros on the next 300,000 euros and, finally, he/she will pay another 20,000 euros on the final 200,000 euros of inherited property. Total inheritance tax for this heir and for property worth 800,000 euros is 1,500 + 15,000 + 20,000 = 36,500 euros, which is not bad for real estate with tax value 800,000 euros and market value significantly higher.

Of course, the same heir, if inheriting from someone who passed away before 19 January 2010, would pay only 1% above the first 95,000 euros, therefore only 1% on the 705,000 euros, which would be only 7,050 euros, significantly lower than the 36,500 euros.

The new law suggests that category-A heirs who inherit cash and not real estate after 19 January 2010, pay 10% inheritance tax from the first euro (ouch!).

Category-B Heirs

Grandchildren, grandparents, brothers and sisters (category-B heirs) do not have to pay inheritance tax on the first 30,000 euros of tax value of real estate property. For property above 30,000 euros and up to 100,000 euros, the new inheritance tax is 5%, which means that for property up to 100,000 euros, a category-B heir will pay 3,500 euros. From 100,000 euros up to 300,000 euros, the tax rate is 10%. Therefore, for an amount of 300,000 euros, the category-B heirs pay 23,500 euros. For the part of property which is above 300,000 euros the rate is 20%.

Attorney Christos Iliopoulos has written extensively for HCS readers on Greek laws and procedures. Browse his articles.

It is worth mentioning that, according to the interpretation of the new law and without any clarifications from the government yet, it seems that the category-B heirs who inherit cash and not real estate after 19 January 2010, will pay inheritance tax at a rate of 20% from the first euro (ouch!).

Category-C Heirs

The regime for category-C heirs remains the same. Other relatives, therefore, apart from categories A and B, and those heirs who have absolutely no relation to the deceased, do not pay tax on the first 5,000 euros of their share, while they have to pay 20% on the next 55,000 euros, 30% on the next 160,000 euros, and 40% on any amount exceeding the first 220,000 euros of their share.

Inheritance Shares Determined by Citizenship

We must point out that how much inheritance tax you pay does not depend on whether or not you have Greek citizenship. For property located in Greece, the ownership and property rules apply the same to Greeks and non-Greeks. However, who inherits what share is determined by the citizenship of the deceased. If the deceased had Greek citizenship (or dual citizenship – Greek and another), then, for property in Greece, it is Greek law which determines what are the inheritance shares. If the deceased was not Greek, then it is the law of his/her citizenship that will determine who inherits how much.

(Posting date 30 January 2010)

Christos Iliopoulos is an attorney at law, LL.M., in Athens, Greece, specializing in International and European Business Law. For more information about him, see his brief biographical sketch under the HCS section for Contributing Authors at http://www.helleniccomserve.com/christosiliopoulosbio.html. He has submitted many articles to HCS; readers can browse these in the archives section bearing his name at the URL http://www.helleniccomserve.com/archiveiliopoulos.html. He can be contacted by e-mail at bm-bioxoi@otenet.gr or by phone (from the US) 011-30-210-6400282; mobile 011-30-693-2775920, fax 011-30-210-6400282, or by postal mail at the address: 105 Alexandras Ave., Athens, 11475, HELLAS

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