I've heard this claim several times:
Q: Why are there so many unfinished houses in Greece?
A: as long as the house is not finished, they don't have to pay building tax for it. So the leave it unfinished in order to evade this tax.
Is this true?
The short answer to the question is: It's not true.
Please let me state beforehand that my answer doesn't try to prove that Greeks in general do not try to avoid paying taxes. Although being a Greek myself, my opinion is that they do so in every possible way and this is for me an undeniable fact. But in this particular case with property taxation though, as you will see below, this is almost impossible.
A. About the finished stage and the protruding-up bars
It must be clarified that the term "steel girders" mentioned in the Telegraph's article (from the other answer) most probably means steel reinforcement bars (rebars), which is the technically correct term.
The vast majority of all "newer" buildings in Greece are steel reinforced concrete structures (less expensive to build than wooden or stone houses), which additionally do respond very efficiently during the frequent earthquakes.
It was a common practice in Greece, when building a one- or two-floor house - especially for summer houses (while the regulations do allow for even higher buildings) to leave the vertical reinforcing bars in the columns of the top floor slab protruding up, so that they could overlap with the bars of the same column, but for the next future floor structure (if and when that might be built).
While this is aesthetically not pleasant, it minimizes the cost of adding an additional floor on top in the future (provided of course that the bars are properly anti-rust protected and of the suitable length for welded lap splicing etc., according to the building codes).
In conclusion, protruding up steel-reinforcing bars are left there only for construction purposes and have nothing to do with "unfinished" stage or tax regulations. These buildings are considered (and are in fact) finished, and are taxed in the very same way as the rest of the "normal" buildings. I believe that this particular part of the article was due to lack of information on behalf of the newspaper reporter.
Furthermore, this particular construction practice has nothing to do with the financial crisis in Greece. It was exercised long before the crisis - and still is in some cases.
B. About the alleged tax evasion or avoidance
On the other hand, it is true that there are quite a few unfinished buildings in the country ("properly" unfinished in this case :)) due to lack of financing means because of this crisis, but obviously not for evading or avoiding taxes. Nobody wants to pay taxes for an unfinished and hence unusable house or apartment, so it is in any case better to finish it, if one has the money to do so.
According to Tax Law # 4223/2013 (in Greek) - Chapter A, Article 4, par A.2.η, there is a 60% reduction on normal taxes due (Coefficient 0.4) for unfinished structures, but only if they are without power supply, or with temporary power supply but empty, regardless of their finishing stage.
ν.4223/2013, Κεφάλαιο Α, Αρθρο 4, Παράγραφος Α.2
η)Συντελεστής Ηµιτελών Κτισµάτων (Σ.Η.Κ.), ο οποίος ορίζεται σε 0.4 και εφαρµόζεται στα ηµιτελή κτίσµατα, ανεξαρτήτως σταδίου κατασκευής, που: α) δεν είχαν ποτέ ηλεκτροδοτηθεί και είναι κενά ή β) ηλεκτροδοτούνται µε εργοταξιακό ηλεκτρικό ρεύµα, δεν είχαν ποτέ άλλη παροχή ρεύµατος πλην της εργοταξιακής και είναι κενά
(Google translate) Coefficient to be applied on normal tax
h) Incomplete Buildings Coefficient (Σ.Η.Κ.), defined as 0.4 and applied to the unfinished buildings, irrespective of the construction stage, which: a) have never been electrified and are empty; or b) they are electrified with work-site electric current, have never had any power supply other than work-site and are empty.
This means that if I own a house in an unfinished stage, either it doesn't have power, so it is unusable, or if it has (but a work-site/temporary one), it must be empty, so again unusable. Therefore, I must pay 40% of the normal taxes, but I can't use it.
Otherwise, regardless of its finishing stage, if the house has power (empty or not), or someone lives inside (with or without electrical power), the owner must pay the full 100% of the normal property taxes.
Every house supplied with el. power is registered in PPC's (Public Power Corporation) database, and therefore accessible by tax authorities. Thus, it is almost impossible to avoid property taxation.
Photos with rebars on top floor slabs (terraces) with anti-rust protection applied on protruding rebars
Durostick - top floor slab insulation - pp 16-17 left
Insulation - scroll down for photos showing rebars
Anti-rust protection - scroll down
boxing of top floor column rebars and here
Link to the Greek Code for Steel Reinforcement 2008 - Articles 7.3.2 & 10.4 provide for the obligatory embedding/concrete boxing of protruding rebar in case of long exposure (mentioned in the letter below) - which very few follow :)
Related article 31/08/12 - Letter of Federation of Owners of Lodged Rooms and Apartments in Dodecanese (cluster of islands in SE Greece) towards the Technical Chamber of Greece
To: Technical Chamber of Greece - Dodecanese section
In recent years we have been receiving daily initially questions, and then negative comments from our guests regarding the aesthetically non-pleasing look of the buildings that have the visible iron bars on their roofs / terraces.
So, the guests, after initially asking to learn the reason of the existence of iron bars in the terraces, then the legitimate question that arises is why we do not interfere aesthetically with the ugly look of these buildings.
This phenomenon is a remnant of another era and mentality; of the 1950s, 60s and 70s - in which owners following the suggestion and encouragement of contractors-builders left the steel rebars exposed in their building in order to benefit from a possible increase in the building factor (my note: building factor is the max no. of floors which is allowed for buildings in every district).
Many owners are not even aware of the damage caused to the building by iron erosion over time.
We know that there are a lot of faults regarding the aesthetic outlook/image of our islands, some of which require long and radical reforms in order to be corrected, and are blocked due to bureaucracy and the legislative framework. However, this can easily be corrected with appropriate information.
We believe that the Technical Chamber of Greece is the most competent body that could, in cooperation with other organizations, launch a campaign (conference organization, promotion through the media) in order to inform contractors-builders and property owners about the necessity of boxing/covering of the rebars, effectively contributing to building safety and beautification.
The State has already dealt with and has enacted measures requiring the obligatory boxing of concrete rebars, which can later be removed for any future expansion of the building. But no one seems to respect this institutional framework. We would like to ask you for your own actions and to inform the citizens about the relevant provisions in order to ensure both the quality of these constructions and their aesthetic upgrading.
The President of the Federation
Seems like the best info so far, so I'm turning this into an answer:
The Telegraph makes this claim in a May 2010 article:
Innumerable buildings have steel girders protruding up from what appears to be the roof. Otherwise the structures are complete and inhabited, but if the girders remain in place, the building is deemed unfinished and therefore not liable to the taxman.
And this 2013 report from a law firm suggests that unfinished buildings are subject to a lower tax rate:
The taxable value of a property is calculated after multiplication with coefficients corresponding to factors that are considered by the law to affect the property values. … Special status coefficients: 0.80 for listed buildings, 0.75 for expropriated properties and 0.40 for unfinished buildings.