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Global Economy

How Greece attracts German pensioners

In mid-February in a small village in northern Greece: Peter Süssenguth is getting his vegetable garden in shape. "Now is the time to clean everything up," he says. He grows cucumbers here, onions, potatoes. "Leek, for example, is already there – think about it! Normally there is snow, and in Greece we already have leeks and such."

The 66-year-old originally comes from Flensburg. He worked as an electrician, later as a forklift driver at a discounter and as a laborer in a large bakery. He also ran a kiosk with his wife. Süssenguth shows photos of it. "We were self-employed on the side, and I was still working somewhere as a non-self-employed person. And then I slowly abseiled down so that we can drive down here."

With Greek social security number

For a good two years now he has been living with his wife in Kato Mitrousi, a small village near the town of Sérres on the Greek-Bulgarian border. He has a Greek social security number and also pays his taxes here. Because if you spend more than half of the year in Greece, you are automatically subject to tax here under Greek law.

This has advantages for Süssenguth. "Although I don't actually have a large pension, it's still worth it," he says. Because the Greek government has changed the tax law. The goal: incentives should be created so that pensioners from abroad move to Greece and pay taxes here.

Flat tax of seven percent

This is what Prime Minister Kyriakos Mitsotakis announced in 2020. "From now on, any income from pensioners from abroad will only be taxed at 7 percent," he told the Greek parliament at the time. "It makes Greece much more attractive and increases public revenues."

A flat tax of seven percent on all income, for example on rental income, in combination with the good weather and the pleasant climate should make Greece a pensioner's paradise and help to boost the economy. On the one hand, the country would benefit from additional tax revenue. On the other hand, the hope is that retirees will spend a large part of their earnings in Greece.

Few applications so far

But so far there hasn't been a big rush, which could possibly also be related to the corona pandemic. Since the new regulation came into force, a good 200 applications have been received from foreign pensioners who want to relocate their tax residence to Greece.

Dirk Reinhardt is a partner in a Greek-German law firm in Athens. He assumes that there will be significantly more retirees in the future. "The demand is absolutely there," says Reinhardt. Many people would have had such considerations beforehand, with the tax incentives a move to the country would now be promoted. "It's often the case that they compare several countries, southern countries with good weather conditions and so on, and then say: Greece has the best conditions, we like it, and then take the step."

Of course there are a few things to consider. Reinhardt therefore recommends: Anyone who is toying with the idea of emigrating should obtain information from a tax advisor or lawyer in both Germany and Greece. This is even more important if you want to buy a property in Greece – there are always problems here, says Reinhardt. "One has to reckon with the fact that in many areas of Greece there is no register." Unlike in Germany, you then need a lawyer to check this in the land registry.

"Warm by nature"

Peter Süssenguth would also recommend everyone to find out beforehand and calculate everything carefully. Some things are initially complicated because it is different than in Germany. The bottom line is that the advantages clearly outweigh the disadvantages, and not just in financial terms. "We feel very comfortable here, I have to say honestly, because the Greeks are warm by nature," he says. "That's why you get along best here as a German. It's a completely different life, a good life, and in that respect I wouldn't swap."

And if they do get homesick, they fly to Germany for a few weeks. But usually they look forward to it again after a short time when they go back to Greece.

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