Greece Is Subsidising First-Home Demand While Raising the Cost for Non-EU Buyers

Greece has put housing affordability at the centre of its latest economic package, but the policy mix is unusual. Prime Minister Kyriakos Mitsotakis announced a new €2 billion “Spiti mou III” programme to expand subsidised first-home finance, while also announcing that the property-transfer tax on residential purchases by citizens of third countries will rise from 3% to 15% from 1 January 2027.

The first measure is designed to make ownership easier for households that struggle to finance a first home. The second is explicitly intended to reduce additional external demand for housing. Taken together, they show the government trying to support one group of buyers while cooling another.

A new round of subsidised first-home finance

The new programme is the successor to “Spiti mou I” and “Spiti mou II”. In his Thessaloniki International Fair address, Mitsotakis said the government would invest €2 billion in “Spiti mou III” with the aim of bringing the total number of first-home cases supported through the series to roughly 40,000. About 25,000 people or households have already been supported through earlier rounds, according to the speech as reported by Greek media.

That makes the 40,000 figure best understood as a cumulative policy target, not 40,000 new mortgages funded by the €2 billion programme alone. This distinction matters for market analysis because the demand impulse depends on the number of new loans, their size, eligibility criteria and timing — details that still need to be set out in the programme rules.

The previous round shows why the scheme matters. The Ministry of Social Cohesion and Family said on 3 September that more than 14,100 borrowers completed contracts under “Spiti mou II”. The programme combined 50% interest-free financing from Recovery and Resilience Facility resources with 50% bank financing. A third round on a similar scale could again lower monthly financing costs for eligible buyers relative to conventional mortgages.

But subsidised credit does not create homes

The affordability benefit for an individual borrower is clear. The broader market effect is less straightforward. When subsidised credit increases purchasing power faster than housing supply, part of the subsidy can be capitalised into prices — especially in the lower- and mid-priced stock that first-home buyers compete for.

Greece’s National Housing Strategy already acknowledges that affordability is not only a financing problem. It also focuses on supply, public property, empty homes, rental availability and new housing production. That is important because “Spiti mou III” will work very differently in a market with expanding supply than in neighbourhoods where eligible homes are scarce.

A fivefold tax increase for third-country buyers

The second housing measure is much more restrictive. According to the government measure breakdown reported after the Thessaloniki speech, the transfer tax on residential purchases by citizens of countries outside the European Union is to rise from 3% to 15% from 1 January 2027. The measure is described as applying to homes, rather than commercial property, plots or other real estate, and is intended to curb external demand that the government says is adding pressure to housing prices.

At face value, the change is large. On a taxable residential value of €500,000, a 3% transfer tax is €15,000; at 15%, it would be €75,000, before notary, registry, legal and other transaction costs. For an €800,000 purchase, the difference between the two headline rates is €96,000.

That is large enough to alter buyer behaviour, particularly in segments where non-EU demand is important. It could affect the economics of Golden Visa property purchases if the implementing law applies the new rate to those transactions without an exemption. But that connection should not yet be treated as settled law.

The 15% rate is an announcement, not yet a complete legal regime

As of 6 September, the 15% measure should be treated as announced policy pending implementing legislation. The post-speech reporting provides a start date and a broad scope, but several practical questions remain open.

The law will need to define how dual nationals are treated, whether long-term residents or other protected categories are excluded, how corporate buyers are classified, which date controls transactions already under preliminary agreement, and whether any transitional rules apply. It will also need to clarify interaction with existing first-home exemptions and residence-by-investment routes.

Until the implementing text is published, modelling the 15% rate as universally applicable to every non-EU-linked purchase would be premature.

The policy tension to watch

The more interesting question is how the two policies interact. “Spiti mou III” adds purchasing power to the domestic first-home segment. The 15% tax is intended to remove some purchasing power from third-country demand. If the foreign-buyer measure materially reduces competition in the same homes sought by first-time domestic buyers, the two policies could reinforce each other.

If the two buyer groups operate mostly in different locations and price bands, however, the effects may barely overlap. A tax increase on higher-value foreign purchases in central Athens, coastal markets or Golden Visa zones does not automatically improve the supply of modest homes eligible for subsidised first-home loans.

That is why the next documents matter more than the headline. Eligibility limits for “Spiti mou III”, property-value caps, geographic distribution, loan terms and the final wording of the 15% tax will determine whether Greece is genuinely rebalancing housing demand — or simply stimulating one part of the market while taxing another.