Assessed vs market property value: What the difference is and which one matters to you?

Two values, two different roles

If you are preparing to buy or sell a property in Greece, it is almost certain that you will hear both of these terms: assessed value and market value. Yet, despite their frequent use, many owners and prospective buyers confuse them or do not know which of the two values practically concerns them. The truth is that these are two entirely different concepts that serve distinct purposes. Let us explore what each one means, how it is calculated, and when you need which.

What is the assessed value of a property

The assessed value is the value determined by the state for each property based on standardized, objective criteria, rather than what a buyer would actually pay in reality.

This value is determined by the Ministry of Finance through specific parameters and coefficients, aiming for objectivity and transparency in taxation.

The calculation relies on a series of factors. The zone price determines the base value per square meter in each area. The age coefficient reduces the value depending on how old the property is, while properties on higher floors or with larger surface areas typically have a higher assessed value. Street frontage or a corner location also increases the property's value.

The assessed value is used exclusively for tax purposes. It forms the basis for ENFIA, the 3% property transfer tax, parental gifts, donations, and inheritances. It does not reflect what a buyer truly pays, but rather what the state considers a property to be worth for taxation purposes.

A crucial point you must know is that the current prices have been in effect since January 1, 2022, and will remain frozen until 2027.

According to public discourse, the next general readjustment has been postponed to 2027, with implementation expected around 2028. This means that while market prices have changed significantly in recent years, the assessed value does not follow them in real time.

What is the market value of a property

Market value is the value that can be achieved in the market during the sale of a property. It is the price buyers are willing to pay and sellers are willing to accept in a free open market.

Unlike the assessed value, a property's market value is shaped by the market based on various factors, spanning economic and social to technical aspects, and it is never stagnant but constantly evolving.

The factors influencing market value are far more multidimensional compared to those of the assessed value. Beyond location and size, the condition and age of the property play a significant role, as they are critical for determining value. A new or recently renovated property usually commands a higher value than an older property requiring repairs. Energy efficiency class, view, proximity to public transport, and broader market trends serve as additional decisive criteria.

The market value is what banks consider for mortgage approvals, and it is ultimately what dictates whether a property will be sold or not.

An incorrect calculation of the market value can result in a failure to sell. If you overestimate your property's value, it may not sell easily, whereas if you underestimate it, you might lose out financially on the sale.

Where the two values differ in practice

The fundamental difference is simple: the assessed value relates to the state, whereas the market value relates to the market.

The assessed value is fixed and determined by the state, while the market value represents the actual selling price of the property in the market.

The two prices rarely align. In highly sought after areas, the market value is often significantly higher than the assessed value, whereas in areas with lower demand, the reverse can occur.

How large is this gap?

Actual market sale prices are on average 30% higher than the assessed prices used for taxation. To make this clearer, consider a practical example: a property in central Athens, near the Acropolis, might have a market value of €500,000 based on location and current market conditions, while according to the state's estimation, the assessed value of the same property might be €350,000, which is the value used to calculate taxes.

How they affect taxes in a real estate transaction

The assessed value is not just a number on paper. It is what determines your tax burdens. The property transfer tax is 3% and is calculated on the property's assessed value, and it is typically paid by the buyer, not the seller.

However, there is an important point of attention. The tax is calculated on the taxable value, meaning the assessed value or the contract price, whichever is higher. This implies that if the sale price, or market value, exceeds the assessed value, the tax will be calculated on the higher price. This knowledge is vital for correctly calculating the total cost of a purchase.

Furthermore, if you are a private individual selling your home in Greece, the 15% capital gains tax has been suspended since 2015 and has been extended once again until December 31, 2026. This is a point that frequently causes confusion, but in practice, it means the seller currently pays no tax on the profit from the sale.

How you find each value

For the assessed value, the process is relatively straightforward. There are three ways:

Through the ENFIA tax clearance certificate.

Through the valuemaps.gov.gr application.

By using the property assessed value calculation sheets.

You can find it for free and without login credentials on the official valuemaps.gov.gr platform. You simply enter the address or postal code, locate the zone on the map, and view the price per square meter.

For the market value, things are not as automated. Estimating a property's market value is not a simple matter, but rather a process that requires both expertise and the necessary professional knowledge.

An experienced real estate consultant can conduct a comparative market analysis, taking into account recent sales in the area, the specific characteristics of the property, and the demand from actual buyers.

The Engel & Völkers team in Greece offers personalized market value estimates, utilizing deep knowledge of the local market, a network spanning over 35 countries, and data from actual transactions. If you are considering selling or want to know the true value of your property, you can request a free online property valuation from our consultants.

Which value matters to you, then?

The answer depends on what you are looking for. If you are trying to calculate your ENFIA or a transfer tax, then the assessed value is what concerns you. If you are preparing to list your property on the market or buy a new home, then the market value is what will determine if the deal is right.

In practice, for a complete real estate transaction, you need both. The assessed value tells you what tax you will pay. The market value tells you what the asset you are buying or selling is truly worth. You must be aware of both before making any final decisions.