How does inheritance tax work for foreigners in Greece
In Greece, the Civil Code determines that the nationality of the deceased is the first reference for establishing the law applicable to inheritance. However, Regulation (EU) 650/2012, applicable in Greece since 2015, allows a person from another country of the European Union to choose the law of their country of nationality to manage their estate in Greece. This option is especially useful if you want to avoid complications and enforce the law in your home country.
If no specific law has been chosen, the law of the country where the deceased was habitually resident at the time of death applies. This means that if you were a resident of Greece at the time of your death, the Greek inheritance rules may apply.
What does the inheritance include?
It is important to know that the inheritance includes both the real and movable property, as well as all the debts of the deceased. This means that accepting an inheritance in Greece also involves accepting any associated debts (taxes, loans, social debts, etc.).
Taxable property in Greece includes all assets located on Greek territory, whether real estate, bank accounts or financial securities. However, property located abroad is not subject to Greek inheritance tax. So, if you are a foreign owner with assets outside of Greece, these assets will not be affected by taxation in Greece.
The different tax rates
Inheritance tax in Greece is divided into several brackets, and the rates vary from 1% to 40%, depending on the value of the inheritance and the category of heir. Heirs are classified into three categories:
- Category A: Spouse, children, grandchildren and parents. They benefit from the lowest tax rate, ranging from 1% to 10%.
- Category B: Siblings, nephews, nieces, and other extended family members. The tax rates for this category range from 5% to 20%.
- Category C: All other people, including unmarried friends and partners. The highest rates apply to this category, from 20% to 40%.
It is important to note that tax rates are progressive, meaning that they increase as the value of the inheritance increases.
The two types of inheritance in Greece
As a foreigner, it is essential to understand the two main forms of inheritance in Greece:
1. Legal succession (ab intestate)
This form of succession applies when no will has been drawn up. If you inherit property in Greece without a will, Greek legal inheritance rules will apply. These rules define who the heirs are and how the property is distributed according to the family relationship.
The spouse of the deceased, for example, inherits a percentage of the inheritance, while children or other family members may also be affected in order of priority.
2. Testamentary succession
If the deceased has drawn up a will, it may be drawn up according to the laws of his country of nationality or in accordance with Greek laws. Three types of wills are recognized in Greece:
- The holographic will: handwritten by the deceased.
- The public will: drawn up by a notary in the presence of witnesses.
- The secret will: given to a notary in the presence of witnesses.
If you have a foreign will, it must be recognized and published in Greece with the competent court.
The Inheritance Procedure for Foreigners
The inheritance process in Greece includes several key steps that foreigners should be aware of:
1. Verifying the existence of a will: The first step is to verify whether there is a will, which requires a search with the relevant Greek judicial authorities. This is especially important for foreigners to ensure that their inheritance tax is properly respected.
2. Establishing the Family Tree and Heirs: It is necessary to prepare a complete family tree to identify all legitimate heirs. This step may require coordination with the Greek municipal services, which can verify the family registration of the deceased.
3. Searching for real estate in Greece: As a foreigner, you will need to conduct a thorough verification of inherited real estate. This involves searching local land registries to verify title deeds, legal encumbrances, or other relevant information related to the property.
4. Acceptance of inheritance: The acceptance of inheritance is formalized by the signing of a notarial deed with a Greek notary. This step is essential to obtain full ownership of the property and to be able to sell or manage it.
The obligations of foreign heirs
If you inherit a property in Greece, there are certain obligations that are unavoidable:
- Obtaining a Greek Tax Identification Number (N.I.F.): This is a unique number needed for all tax transactions in Greece.
- Appointing a tax representative: As a non-resident, you will need to appoint a tax representative in Greece who will act on your behalf with the tax authorities.
- Management of bank accounts: If Greek bank accounts are part of the inheritance, specific steps with the banks will be necessary to transfer the funds or access the accounts.
Waiver of inheritance in Greece
If, for financial or personal reasons, the heir does not accept the inheritance, he or she has a period of 1 year to declare it (instead of the 4 months reserved for Greek residents). The renunciation is made by an official declaration to the competent court of the last place of residence of the deceased in Greece.
The European Certificate of Succession
If you are a citizen of the European Union, the European Certificate of Succession makes it much easier to recognise your rights as an heir in several countries. This document is recognised in all EU countries (except Denmark, Ireland and the UK) and makes it easier for you to exercise your rights as an heir abroad.
Delegating the procedure to a professional
The inheritance procedure in Greece can be complicated, especially if you do not reside in the country. Fortunately, it is possible to delegate all these steps to a Greek lawyer via a power of attorney. He or she will be able to carry out the research, manage the administrative formalities, and even sign the deed of acceptance of the inheritance on your behalf.
