Greece’s Expat Tax Regime: Comprehensive 2025 Update

Living in Greece

Greece is an idyllic destination for expats, offering a blend of natural beauty, rich history, and a relaxed Mediterranean lifestyle. The country’s cost of living is approximately 30% lower than many other European Union countries, making it an attractive option for those looking to stretch their retirement savings. Greece enjoys an average of 250 days of sunshine per year, which complements its picturesque landscapes, including 6,000 islands, of which 227 are inhabited. This environment, combined with the new favourable tax regime, makes Greece a prime location for retirees and high net-worth individuals seeking a high quality of life at a lower cost.

Qualifying for Greek Expat Tax

To benefit from the new Greek expat tax regime, certain criteria must be met. The government has outlined specific requirements to ensure that the tax incentives attract genuine long-term residents rather than transient visitors.

General Requirements

• Relocation from a Country with a Double Tax Treaty: The primary requirement is that you must relocate from a country that has a double tax treaty with Greece. This ensures that there is a mutual agreement in place to prevent double taxation and facilitate the relocation process.
• Non-Resident Status: Additionally, you must not have been a Greek tax resident for five out of the six years preceding your relocation. This condition helps to differentiate new residents from those who may have previously lived in Greece and are looking to take advantage of the new tax regime.

Specific Requirements for Foreign Retired Individuals

1. Receive Pension Payments from Abroad: To qualify as a foreign retired individual, your pension must come from sources outside Greece. This means that retirees drawing pensions from their home countries can benefit from the favourable tax treatment in Greece.
2. Tax Residency: You must establish tax residency in Greece by spending at least 183 days per year in the country. This residency requirement ensures that individuals genuinely integrate into Greek society and contribute to the local economy.
3. 7% Flat Tax for Retirees: Once you become a tax resident in Greece, you benefit from a flat 7% tax rate on your total foreign-sourced income, including pensions, dividends, interest, and capital gains. This favorable rate applies for a duration of 15 years.

Eligibility Criteria:

• Non-Tax Resident Status: Applicants must not have been Greek tax residents for five out of the six years preceding their relocation.
• Relocation from a Cooperative Jurisdiction: Individuals must transfer their tax residence from a country that has an agreement on administrative cooperation in tax matters with Greece.
• Proof of Foreign Pension: Applicants need to provide documentation confirming receipt of a foreign pension.

Application Process:

Applications must be submitted by March 31st of the respective tax year. The 7% tax is payable in a lump sum annually by the last business day of July and cannot be offset against other tax liabilities.

1. €100,000 Flat Tax for High-Net-Worth Individuals (HNWIs): Those who transfer their tax residence to Greece can opt for an alternative taxation regime, paying a flat annual tax of €100,000 on all foreign-sourced income, irrespective of the amount earned. This regime is available for a maximum of 15 fiscal years.

Eligibility Criteria:

• Non-Tax Resident Status: Applicants must not have been Greek tax residents for seven out of the eight years preceding their relocation.
• Significant Investment: Within three years of application, individuals must invest at least €500,000 in real estate, businesses, securities, or shares in legal entities based in Greece.

Family Inclusion:

The regime can be extended to family members by paying an additional €20,000 per person annually. Income earned within Greece by individuals under this regime is taxed according to the general tax provisions.

Recent Tax Reforms and Updates

In December 2024, Greece enacted Law No. 5162, introducing several tax reforms effective from January 1, 2025. Key changes include:

• Reduction of Healthcare Insurance Contributions: Employee healthcare insurance contributions are reduced by 1%, with the reduction equally shared between employees and employers.
• Exemption for Health Insurance Premiums for Minors: Health insurance premiums for individuals under 18 are exempt from tax for tax years commencing on or after January 1, 2025.
• Abolition of Business Levy for Freelancers: The annual business levy, previously up to €1,000, has been abolished for freelancers and self-employed individuals, providing significant financial relief.

Does the Greek Expat Tax only apply to income received through pensions?

No, the 7% flat tax rate applies to all sources of income. This comprehensive approach includes not only pensions but also investment dividends, rental income, and other forms of earnings. Previously, Greece had a progressive tax system with rates climbing as high as 45%, which could be a significant burden for high-income earners. The new flat tax rate is a significant reduction, making Greece an attractive destination for individuals seeking tax efficiency.

Property in Greece

The Greek government is actively working to make property ownership more appealing to foreign investors. One of the key initiatives is the proposed reform of unified property taxes. The current threshold for these taxes is €250,000, but policymakers are considering raising this to €350,000. This change would make purchasing property in Greece more cost-effective, benefiting both retirees looking for a home and investors seeking profitable opportunities. With lower property taxes, more funds can be allocated toward lifestyle enhancements, investments, and leisure activities.

To Summarise…

• Flat Tax Rate: The Greek Expat Tax regime has introduced a reduced tax rate of 7% on all income sources, significantly lower than the previous rates that could reach up to 45%.
• Qualification Criteria: To qualify, you must relocate from a country with a bilateral tax agreement with Greece and must not have been a Greek tax resident for five out of the previous six years. Specific criteria apply for foreign retirees and high net-worth individuals.
• Property Tax Reforms: Potential changes in property tax policies are set to make property ownership in Greece more beneficial, encouraging investment and making the country an even more attractive place to retire.

Greece’s updated expat tax regimes offer compelling incentives for retirees and HNWIs considering relocation. With favorable flat tax rates, extended applicability periods, and recent reforms enhancing the overall tax environment, Greece solidifies its position as an attractive destination for expatriates seeking tax efficiency and a high quality of life.

What to do next

If you are considering retiring in Greece, now is the perfect time to explore the new Greek expat tax incentives.  With favorable flat tax rates, extended applicability periods, and recent reforms enhancing the overall tax environment, Greece solidifies its position as an attractive destination for expatriates seeking tax efficiency and a high quality of life. To begin your journey, it is advisable to consult with specialists who can assist with pension transfers and investments. These experts can provide personalized advice and support to ensure that you make the most of your retirement in Greece.

Contact us today for a no-obligation discussion on how you can start benefiting from these new opportunities and enjoy a serene, tax-efficient retirement in one of the world’s most beautiful countries.