Greece – A Golden Destination with EU Schengen Zone Access
Greece is situated at the crossroads of Asia, Africa, and Europe. It is well-known for its gorgeous coast lines, sandy beaches, sunny weather, and the amazing nightlife.
Also, it is renowned for the unique natural beauties of its islands, rich culture, and local traditions. In fact, each island of Greece has different customs, culture characteristics and lifestyle that make it very interesting to visitors.
Moreover, Greece is very famous for its Mediterranean cuisine and the historical monumental sites, which date back to the 7th millennium BC, such as: Acropolis in Athens, Ancient Delphi and Epidaurus, Mystras, Ancient Olympia, Knossos Palace in Crete and many more.
Greece is a member of the European Union since 1981, it has joined the Schengen Zone in 1992 and the Eurozone in 2001. The official currency is Euro.
Its official language is Greek, but a great percentage of the population speaks English, followed by French, Italian and German.
Greece has an exceptional infrastructure, which can support all business activities, especially in its mainland cities.
Additionally, it has an outstanding inland transportation, as well as an excellent transportation through air and sea.
Equally, it has a reliable private and public medical system, which can support its citizens and visitors throughout the country.
The Educational system of Greece is very advanced and reputable all over the world.
Greece is considered to be a safe destination for travelers, since crime rates are considerably low.
Greek people are very polite, and they are distinguished for their hospitality. When foreigners visit Greece, they feel like home and they are overwhelmed by the Greek hospitality.
Even though Greece has been suffering from a monetary crisis in the last decade, it continues to be one of the most attractive and safe destinations in the world for investment, due to its location, safety, quality of life etc.
Similarly, Greece is considered to be a Business Hub for various industries and companies such as trading, manufacturing, tourist, energy etc.
Tourism is one of the most important sectors for the Greek Economy.
It produces high revenues and contributes significantly into the country’s GDP. Greece is highly dependent on its tourism sector; in 2018 tourism alone contributed €21.6 billion – 11.7% of the country’s GDP. This is €2.5 billion more than 2017. In fact, tourism in 2018, contributed directly and indirectly approximately €25.7 to €57.1 billion.
Greece is a popular destination for many European and International visitors for their summer and winter holidays. Unfortunately, due to the consequences related to Covid-19 pandemic, the country’s tourism industry has been suffering. There has been a decline in tourist arrivals due to the travel restrictions and a decline in domestic and international tourists’ expenditure.
Moreover, the downturn in tourism is expected to continue until the early months of 2021, which will then revive significantly reaching 308.000 persons/month in 2021 and 445.000 persons/month in 2022.
Greece’s economy is highly dependent on the country’s services sector and it has a high share of micro enterprises that are highly vulnerable to external factors.
Prior to the pandemic that has taken over in the first months of 2020, the Greek economy was prospering with a GDP growth of 1.9%. The growth was led by the domestic demand and the decrease of net exports and the growing tourism. However, public debt and unemployment rates remain high.
As per European Commission’s Economic Forecast figures, the country’s GDP is expected to decrease further in 2020 reaching – 9.7% and the unemployment rate will reach approximately 20%, in 2020.
Indeed, the current economic situation of Greece is uncertain and highly affected by various external influences.
However, the European Commission’s economic forecast, states that 2021 will be a promising year for Greece and potential investors. The country’s GDP is expected to reach almost 8% and unemployment rate to decrease to 16.8% in 2021, while the tourism and trade sectors will experience a significant upturn.
The Government of Greece took several actions to ensure that the Covid-19 pandemic is tackled in a balanced and measured way, whilst ensuring the stability of the country’s economy as much as possible.
For example, some of the measures that the government of Greece established to tackle the pandemic effects were special unemployment benefits and waivers of social security contributions, health care investments, payments postponement of certain taxes etc. Also, the government applied a 40% decrease in renting properties occupied by hotels, food catering and any other services who have been massively affected by the Covid-19 pandemic crisis.
In addition to that, Greece has the major support of the EU. In fact, Greece received funding from the EU in order to get through the economic consequences brought by the Covid-19 pandemic.
Given the measures taken by the Greek Government and the support of the EU, the European commission stated that the Greek economy is predicted to decrease by 9% in 2020 but in 2021 the Grecian economy is predicted to achieve a 6% increase.
The corporate income tax rate is 24% which is the same for Branch and Capital Gains tax rate. According to the table, individual income tax rate is as follow:
The real estate ownership has two types of taxes: the main tax and an additional tax.
The main tax is based on the characteristics of the property (i.e. location, zone price, surface, size, age etc.), whereas the additional tax differs from company to individuals.
According to Deloitte’s report on Greece 2020, “For companies the additional tax is calculated at a rate of 0.55% on the total tax value of all the company’s property. Property occupied by the company is subject to 0.1% additional tax. For individuals, the additional tax is calculated on the total tax value of all the taxpayer’s property if the total value exceeds €250,000. The additional tax rate ranges from 0.15% to 1.15%, depending on the value property”.
The investment levels are predicted to decrease due to the lower turnover and the uncertain future of the country’s economic prosperity.
However, the Greek government along with the EU institutions are taking actions to help companies to recover from the lockdown period and have an easier, more efficient recovery. For example, a new measure was applied for a 3-year suspension period of VAT on new building permits, aiming in enhancing and improving the housing market.
In addition to that, , the completion of the Hellinikon Project (a multibillion-dollar project, which includes the creation of apartments, marinas and luxury hotels), is projected to positively increase the value of the surrounding areas and contribute to the overall increase of the real estate market. Hence, the completion of this project will certainly attract international investments and encourage the development of more areas to accommodate the needs of locals and foreigners.
The real estate market in Athens during 2019 had an increase of more than 25% in apartment sales.
Attica has been on the top of the list having the highest increase in house prices, due to the high demand of short leasing and Greece residence permit scheme, “Golden Visa” The Golden Visa Scheme attracted non-European residents from various backgrounds and main nationalities Chinese, Lebanese, Russian, Turkish and Egyptian.
Furthermore, the real estate market is expected to experience a growth in prices in several locations throughout the country, especially at seaside areas where tourism is highly attracted.
According to the GrekoDom, Greece currently established a temporary stop to the readjustment exercise of property objective values. The specific activity entails that price zones will be reevaluated, due to the pandemic negative effects that caused a decline in low-level properties.
In addition, the government decided on the decrease of ENFIA (Unified Property Ownership Tax) by 8%-10%.
GrekoDom stated that, “The new ENFIA decrease is expected to delete the tax burdens, which shall emerge from the increase of the objective property value in multiple areas of the country.”. Therefore, property owners i.e. tourist areas, islands and wealthy areas shall expect a tax relief burden.
Also, the government has established an electronic system where individuals will be able to submit parental grants, declarations and transfer of properties in electronic forms, so as to make procedures more efficient and effective.
Finally, the Greek Real Estate market, especially in Athens, is expected to have a substantial growth due to the multibillion-dollar Hellinikon Project.
The specific project will be like a sub city consisted of luxury hotels, casinos, marinas, and modern apartments. Particularly, the specific project will potentially attract investors and interest for potential developers wishing to enter in the developing market of Greece. Of course, this increase will inevitably lead to the country’s GDP growth, as it will attract higher numbers of potential homeowners, as well as tourists both domestic and international.