As a not Greek citizen, it is possible for you to buy property in Greece. If you belong to a country-member of EU you are under the same legislation as a Greek citizen. If your country is not a member of the EU, the procedures differ and we are willing to inform you accordingly as long as we know your nationality. Additionally, recent changes in Greek law now permit foreign ownership of property in previously sensitive areas such as Crete and Corfu and in border areas. However, both EU and non EU residents must obtain permission from the appropriate authorities before purchasing real estate in border areas.
Before anyone — a citizen of Greece, the EU or another foreign national — can purchase real estate in Greece, that person must first obtain a tax registration number, known in Greece as AFM, which is provided to you by request from the IRS (Internal Revenue Service).
The first stage is a Sales Agreement to be signed by the parties and a deposit to be given – usually up to 10% of the property’s value. This agreement contains the names of the parties, a description of the property, the price, the method of payment and any special conditions.
The real estate agent will then be instructed to take the property off the market whilst your appointed lawyer completes the purchase transaction. Under Greek law, no contract is enforceable unless it is in writing and notarized. It is important therefore that once an offer has been made and accepted all purchase documents are checked by a lawyer before signing to ensure that the seller has a rightful title to the property.
If you decide not to complete the transaction for reasons not related to the property, after you have paid the deposit, the latter can be lost due to the cancellation of the sale. However, if the seller pulls out of the deal after receiving your deposit, you are entitled to claim a return up to double of the deposit as compensation. The compensation will not affect your statutory rights to legal action against the seller for any damages.
Further the public notary works with our office to ensure that the contract is drawn up in an orderly fashion and presented to the taxation authorities on time. Before any transaction takes place, we will carry out searches with the Land Registry; examine the titles of the property of the seller together along with the rest of the documentation.
Also a civil engineer will confirm that the property complies with town planning regulations. With the completion of the contract, the ownership of the property will then be legally conveyed to the buyer. The final contract is signed before the public notary.
Goods things do not come for free so, when buying property you will have to add extra expenses to the real value of the property and that is:
– Transfer tax (currently at 3%)
– Real Estate agent’s fee (2%) plus V.A.T. 24%
– Public notary (aprox. 1.2%) plus V.A.T. 24%
– Lawyer’s fee (aprox. 1%) and/or hourly fees plus V.A.T. 24%
– Land registry fee (aprox. 0.6%)
Attention! The value of a property in Greece is divided in two concepts. The commercial value of a property which refers to the expectation of the seller and differs from place to place based on the demand and supply. The objective value of a property is based on criteria set by the Inland Revenue authorities for a certain period of time and for certain places. The objective value sometimes approaches the real value but differs from area to area. If the commercial value is lower of the objective value, all taxes and fees are calculated upon the objective value. This is a very Greek particular and is related to the wish of the state to have minimum revenues from real estate transactions.
Finally Greek tax authorities are very concerned about where a foreign national is obtaining money to purchase property in Greece. As a consequence, a foreigner interested in buying property in Greece will need to open a bank account in Greece in order to be able to wire the money from his home country, at least the expenses that are payable in Greece (tax, notary public, land registry fees). Thus the buyer is obliged to demonstrate the source of its money for tax purposes otherwise tax authorities may consider the money used in the transaction sourced from “local income” and thus taxable. That is why a good accountant will be needed to plan and manage your tax obligations.
On many levels, buying property in Greece — particularly if you are a foreign national — can be a rather complicated and sometimes confusing process. However, we and our team of experts (public notary, civil engineer and accountant) are committed to our clients to provide expert legal advice, and work with the team of experts we have which will make our client feel secure and certain with his investment and abolish any complication either with the transaction or with the local authorities.
Lastly our office is here to help you with the exploitation of the property.
Rigas – Head Lawyer