A built-in barbecue or pergola can enhance a property’s garden while also increasing its market value. But how does this impact taxation when the property is transferred? Are these structures taxable? A recent directive from the Governor of the Independent Authority for Public Revenue (AADE), Giorgos Pitsilis, provides clarity on how constructions on properties are taxed when transferred through sale, inheritance, parental gift, or donation.
The directive states that in a property sale, the transfer tax increases if the property includes structures or features deemed integral components. For example, wells and boreholes are permanently affixed to the land, directly influencing the property’s value. This is particularly relevant for agricultural land, where the presence of a borehole or well designates it as irrigated, raising its assessed value and, consequently, the tax liability. If such active wells and boreholes exist on a plot, their value is determined through a preliminary evaluation by the appropriate tax office (DOY/KEFOK).
Prefabricated or modular homes qualify as integral parts of a property only if they are permanently installed on the land. When this criterion is met, their value is factored into the property’s assessed value and is subject to transfer tax, just like other essential components.
Conversely, structures such as pergolas, barbecues, sheds, inactive wells, fountains, cisterns, and fences are not considered integral to the property. These are classified as annexes or movable assets and do not influence the tax burden when a property is transferred or sold. However, if acquired through inheritance, donation, or parental gift, they are taxed separately based on the declared value provided by the taxpayer.
According to the AADE directive, no preliminary evaluation is required to determine the value of these annexes. The tax authority must accept the declared value without verification. Tax is imposed based on the amount declared by the taxpayer.
When assessing a property’s tax burden, authorities consider whether structures or elements are permanently affixed to the land and if their removal would entail excessive costs or cause property damage.
The directive highlights that distinguishing between integral components and annexes is essential for determining taxes on inheritance, donations, parental gifts, and property transfers. Integral components, which cannot be independently owned, are taxed along with the property’s total value. In contrast, annexes, which can be separately owned, are classified as movable assets. As a result, they are exempt from property transfer tax but remain subject to inheritance, donation, or parental gift taxation when obtained through these means.
