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The gap between the cadastral and market value of real estate in Greece is widening.

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We're explaining what this is due to and what the consequences are.

What has happened

Three years have passed since the last update of the cadastral value of real estate (known as the "objective value"), and in some areas of Athens, as well as in popular tourist zones, the difference with the commercial sales prices has sharply increased.

Key points

  • In the first five months of 2024, over 85,000 properties were sold in Greece, which is a record high.
  • Despite price increases across the country, demand for real estate remains high, and the gap between cadastral and market values has significantly widened.
  • In some cases, the market selling price of real estate exceeds its cadastral value by twice.
  • The most significant discrepancies are observed in the center of Athens, as well as in the southern and northern suburbs of the capital.
  • The Municipality of Athens leads in the number of real estate sales, where prices stated in contracts significantly exceed the cadastral value.

Examples

A first-floor apartment of 153 square meters in Kifissia was purchased at the price of 672,301 euros, or €4,394 /sq.m., when the objective value in the area in question amounts to €2,000/sq.m. That property’s selling price was 119% higher than the objective value.

Another first-floor apartment in Kifissia, of 208.5 sq.m., was sold for €600,000 or €2,878/sq.m., when the area’s zone rate is €1,650/sq.m. Likewise a third-floor flat of 57 sq.m. in Kolonaki, with an objective value of €242,250, was sold for €330,000.

The background

The cadastral value of real estate in Greece, known as "objective prices," directly impacts the annual property tax (ENFIA). However, since 2021, when the map of objective prices was last updated, the market prices for real estate in the country have significantly risen.

The Independent Authority for Public Revenue (IAPR) and the Real Estate Transfer Tax Registry report that the average price of sold real estate in Greece increased from €96,000 in 2022 to €106,000 in 2023 and have reached €108,000 in the first five months of 2024.

Thus, the disparities between market and cadastral values primarily indicate that actual real estate prices in Greece have substantially increased in recent years.

Quote

Natalia Tsiro Rouva, Founder and Managing Director of Hellas Consult Solution: "The market value of real estate in Greece is typically two to two and a half times higher than the cadastral value. This is especially true for areas popular among foreigners seeking a 'golden visa.' Prices are artificially inflated in these areas to make properties eligible for investment residence permits. However, the government is beginning to express dissatisfaction with the situation because it is losing out on taxes. After all, the annual ENFIA tax is calculated based on the cadastral value. Therefore, we can soon expect a new reform to determine cadastral prices."

Source: Ekathimerini

Photo by Oleg Prokopenko on Unsplash

Quoting conditions of Prian.info materials

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Tags: Greece, Market Analysis, Investment, Real Estate

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