Buying property in Greece

Buying in Greece - What's Involved?

Buying a property abroad can seem daunting, but buying in Greece is relatively straightforward. The information below should cover most concerns, but please don't hesitate to contact us if you require further information.

Who can purchase property in Greece?

Citizens of the European Union are able to purchase property in Greece. In certain circumstances it is possible for nationals of other countries to buy property. To establish what the regulations are in these cases you would need to contact the Greek Consulate or Embassy in your home country.

Power of Attorney

The purchaser is not required to be present when the contract is signed. If you are unable to attend you will need to prepare a Power of Attorney to enable signing of the contract in your absence. Depending on the seller's situation as well as the location of the land, the time from your decision to purchase to the actual signing of the contract can take anywhere from five days to over a month. If you are not in Greece, your Power of Attorney enables the lawyer of your choice here in Greece to sign the land contract on your behalf.

Lawyer

A lawyer registered to practice in Greece is required for all property transactions. You can appoint a lawyer of your choice or we will be pleased to recommend a local lawyer familiar with property purchase. Solicitors carry out necessary legal surveys and conduct a property title check for the past 20 years; they ensure the property is free of any mortgage notes, claims, expropriations, rights-of-way and, in general, any legal encumbrances. In addition, solicitors ensure that all property taxes burdening the vendor have been paid. The cost varies to €400,0-€500,00, plus 1% if the objective value of the property is under €40.000,00 and 0,05% if the objective value of the property is over €40.000,00.

Notary

A notary public is a government-appointed lawyer who processes and certifies all real estate transactions, including drawing up and reviewing all official documents, to ensure the legal transfer of the property. The cost is 1% to 1,5% on the objective value of the property.

Tax Registry Number

This tax number (AFM) is mandatory for all buyers, including foreigners and permanent residents abroad. It is issued on the spot at tax offices, free of charge. All applicants must present their passport and their birth certificate. If you have granted your solicitor full Power of Attorney, he / she can apply for an AFM on your behalf.

The property tax

The cost varies under €20.000,00 10% on the objective value of property and over €20.000,00 9% on the objective value of the property

Accountant

It is essential to hire an accountant early on to help you with tax returns and explain taxation laws to you.

Some other inquires you may have

• Do I need a Greek bank account?

Yes. All necessary payments will be made through this account; also, this account will prove that funds used for property purchase have come into Greece from another country and are, therefore, not taxable in Greece. Opening a bank account in Greece only takes a few minutes and requires no minimum opening deposit. All you need is your ID or passport and your AFM (tax registry number, see above).

• Can you walk me through the buying process?

The process is fairly quick and uncomplicated. As a general rule, you must:

·         Select your property.

·         Make sure financing for the purchase is secured.

·         Appoint your solicitor, notary public, surveyor, and accountant.

·         Apply for special permit, if applicable (Blue Card or other, see above)

·         Apply for your Tax Registry Number (AFM).

·         Open a Greek bank account.

·         Sign the pre-contract detailing terms of sale and payment schedule.

·         Pay a 10% deposit to secure the property by removing it from the market; usual payment methods include cash, bank transfer or credit card.

·         Return to Greece to sign the final contract, after all legal work is completed (6-8 weeks, usually). Alternatively, your solicitor may sign for you if he/she has been granted full Power of Attorney. Upon completion of final contract, all fees and taxes must be paid

• How much are closing costs?

Closing costs, including all fees and taxes, are an estimated 13-15% extra.

• Do I have to file tax returns in Greece once I’ve become a property owner?

Yes. The Greek State has mandated that all property ownership in Greece must be declared by filling out a form called E9 and submitting it to the Greek Tax Authorities. This is mandatory for every property owner in Greece, even for those who live abroad and have never filed tax returns in Greece or do not have an income in Greece. As of 2006, the E9 form will be submitted only by those who either, obtain or sell / dispose of any kind of right over immovable property in Greece. If you own immovable property in Greece but your assets next year have not changed from what they were the year before, you do not have to submit the E9 form again.

You can not file an E9 all by itself. E9 is a schedule which must be submitted together with the basic Income tax form E1. If you have no income in Greece, you enter “0” income in the E1 form; still, you must submit the E1 as well.

In order to submit the E1 and E9 returns, you must have a Tax ID Number (AFM). The E1 and E9 can be prepared and submitted by accountants and / or solicitors.

If you fail to declare a property you will not be able to transfer it later. Additionally, failure to file annual tax returns is subject to penalty; therefore, appointing an accountant and a solicitor early on in the buying process is critical.

• Do I have to pay Capital Gains tax if I decide to sell my property?

No capital gains has been abolished since May 2010

• Do I have to pay annual property taxes?

That depends on the value of your property. You will have to pay an annual property tax if your property’s tax assessed value exceeds 243.600 euros.

• Is it possible to get a mortgage in Greece? If so, what are the requirements?

Yes, it is possible to get a mortgage in Greece.LTV will be about 65%-70% To apply for a mortgage you will need your passport and proof of income for the last 2 years (P-60’s, payment stubs, or tax returns if self-employed). Please be aware that if you apply for a Greek mortgage, you must be able to pay all closing costs before any funds from the bank are released.

• Can I purchase property in somebody else’s name?

Yes. You may purchase property jointly with your spouse and/or other co-purchasers, in names of children or legal heirs, or in the name of a company.

• What type of property insurance is recommended?

Although no market standards exist as to the forms of insurance that can be taken out, it is reasonable to suggest that property be insured against the following risks: fire, earthquake, water damage, breaking glass, storm, theft, and third party.

• What happens if the legal searches highlight any problems with the property?

If the searches highlight any problems you will receive your deposit back in full. This is why the deposit is paid to the solicitor and not to the vendor.

• What happens if I change my mind?

If you have signed a contract and paid a deposit for a property, this is considered to be an official intent to purchase. It is important that you are absolutely certain that this is the property you want, and that you feel you are under no pressure to sign a contract and pay a deposit. Should you decide to withdraw from the purchase, you will lose your deposit.

• What happens if the vendor changes his / her mind?

If you have signed the pre-contract and made an initial deposit, your deposit will be refunded in double.

Please read our information on "Foreign Ownership" »