Tax increases create property bargains in Greece

With the Greek government inputting a severe austerity package including large tax increases, many locals are putting their vacation homes on the market. The result? Property bargains for foreign investors in some of Europe's most popular holiday destinations, reports the New York Times.

The high incidence of property taxes included in the government's latest austerity package, which it must pass in order not to default on its loans and be handed another bailout by the EU, means that for many Greeks home ownership, particularly second home ownership, is no longer a practical option. As a result, many of the nation's traditionally high-demand markets are now in oversupply as locals rush to sell their places in the sun.

Local estate agency Demeures de Grece reported that since the peak of the country's property boom in 2008, prices have decreased significantly even in sought-after holiday islands like Mykonos and Corfu. Average homes on the east coast of famed party capital Mykonos now sell at around €3,000-€5,000 per square metre, meaning bargain-hunting vacation home buyers can pick up a generous sized 1 bed apartment for as little as €195,000. "It's a good time to get a bargain", agency partner Nicolas Mugni told the Times.

Over on the somewhat more sedate island of Corfu, a magnet for older sun-seekers and families, prices are slowly following suit, with average apartment values now at around €4,000-€6,000 per square metre, according to CB Richard Ellis Atria. Resale properties present a particularly inexpensive option compared to new-builds, says Mugni, as they are only subject to a 10% transfer tax on sale, as opposed to the 23% VAT imposed on a new home. 

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