“Relief” for property owners with debts: Withholding on property transfers drops to 5%

Previously, any taxpayer wishing to sell real estate while having overdue debts under suspended collection would face an automatic withholding of 50% of the transaction price by the tax office. This applied regardless of whether the debt was “frozen” due to a court appeal or a decision by the Dispute Resolution Directorate (DED), with the Independent Authority for Public Revenue (AADE) mandating the retention of half the sale price as a “guarantee” for repayment.

However, a recent decision by AADE Governor Giorgos Pitsilis (A.1072/2025) introduces significant changes. Withholding can now be reduced to just 5% of the sale price, given that certain conditions are fulfilled.

Specifically, this favorable treatment applies to taxpayers who have a principal debt exceeding €50,000 under suspended collection—either due to a court ruling or a decision by the Dispute Resolution Directorate (DED). To qualify for the reduced withholding from 50% to 5%, the debtor must provide adequate security for the State.

This can be accomplished in one of two ways:

1. Offering a guarantee (such as a bank guarantee), or
2. Registering a first mortgage on another property owned by the taxpayer.

In the case of a mortgage, the AADE will accept security based on 80% of the property’s assessed value. If the mortgage does not fully cover the debt to justify the 5% withholding, the withholding will be adjusted proportionally—for example, to 10%, 20%, 35%, etc.—depending on the coverage provided.

Example:
If a property owner has a suspended debt of €80,000 and sells a property for €200,000 while offering another property (like a plot of land) valued at €100,000, the AADE will accept 80% of that value (€80,000) as adequate security. This allows the withholding to decrease from €100,000 (50%) to €10,000 (5%), enhancing the taxpayer’s liquidity and facilitating the transfer.

Applicable Scenarios:

• For those with structured and current repayment plans on overdue debts, a digital tax clearance certificate will be issued with a 70% withholding on the sale price, capped at the total debt amount—provided the sale price is equal to or exceeds the property’s assessed value. If the sale price is lower, a 70% withholding will apply first to the sale price, and if that’s insufficient, it will be calculated based on 70% of the assessed value, ensuring the total withholding does not exceed the sale price.
• For those with unstructured overdue debts exceeding €30, who are not part of any repayment plan or collection suspension, a tax clearance certificate will not be issued. In such cases, assuming all required tax filings have been submitted and there are no other holds, a Certificate of Debt can be obtained digitally through myAADE, allowing the completion of the property transfer.