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WHAT TO KNOW WHEN BUYING PROPERTY IN GREECE

I. LEGAL PROCEDURE

EC legislation allows citizens coming from EC members - states to buy and own properties in another EC state. Therefore, the rules and the procedure applied for property purchase is the same for all European citizens. Since Greece became a member of EC in 1981, British, French, Spanish, Dutch, German etc citizens can buy any kind of properties in the Greek territory. Specific areas of Greece are considered to be military and there should be issued permission before the contract is signed (applied also for Greek citizens). Non European Union citizens who wish to purchase property should apply to the Ministry of External Affairs in order to get prior authorisation otherwise their contract will be void and not legal.

Deposit

To secure a chosen property: a 10% deposit on the purchase price is usually required on signing a pre-contract agreement. This agreement contains the names and description of the parties, the description of the property, the vendor's title, the price, the methods of payment and any general conditions negotiated by the parties. Sometimes in the case of a  cheaper property this agreement does not take place and the parties move straight to the contract signature before a Notary Public with the two lawyers representing the parties. The purchaser should always be aware that no deposit or any other amount should be paid before the legal search of the property is carried out by a qualified lawyer appointed by the purchaser and acting in his /her interests. In case that any of the contractors backs out of the contract, the other contractor can sue for his or her damage suffered.

Purchase

All the documents regarding the purchase of a property should be carried out before a Public notary, otherwise they are void and not binding, e.g the power of attorney for property purchase. Therefore, the property purchase contract is always executed before a Notary and in the presence of lawyers representing the seller and the purchaser. A purchaser needs a lawyer to act on his/her behalf in order first to check the vendor's title and his ownership (legal search) and then to assist with the Local Regulations, to fix the "assessed value" (with the notary's assistance) and ensure that he/she will obtain a legal property title. The legal search of the property includes the search of the vendor's ownership as well as the search of third peoples' rights on the property (eg mortgage, right of way etc), and it is always carried out at the local Land Registry of the area of the property. Legal procedures in Greece are not complicated and when the documentation is complete the contract can be signed quite quickly. The purchaser has to be provided with a tax number which is unique for any person (and can be used for any other action in Greece e.g. vehicle purchase) and he/she has to pay the conveyance tax before the contract is signed. In case of the contract cancellation, the tax is refundable. The notary can not allow the contract signature if all the documentation is not complete, the tax is not paid and the deeds are not in order. Finally, the contract has to be registered in the local Land Registry otherwise the vendor is still considered to be the owner of the property and can even convey the property to another purchaser.

Expenses

The Purchase tax, Notary and legal fees (except those of the vendor's lawyer), as well as land registration fees are always paid by the purchaser (if the opposite is not agreed) and they are calculated on the "officially estimated price" or "tax price" of the property, which is usually lower than the true purchase price. All prices in Crete are quoted in the Euro. Prices should be checked with the person showing you the property, who will then check again with the vendor at the time of a prospective purchaser making an offer to buy. We are not responsible for price changes by the owner.

NO CAPITAL GAINS TAX NOW

New tax laws for purchasers are as follows:

Any plot, or house built with a bulding licence up to and including 2005

The first €20,000    8%
The balance of price 10%

this joint amount is then subject to municipal tax of 3%

EXAMPLE

Price €30,000

€20,000     @ 8%       = 1,600
€10,000     @ 10%     = 1,000

Total                         = 2,600  x 3% = €78

Grand total                 =€2,678

Any house, flat or shop with a building licence since 2006

23% VAT

Exchange

The exchange rate between the Euro and the Pound fluctuates frequently. All our prices are in Euros. To obtain the exchange rate at any one time you should check with the bank or building society. There are companies who deal in foreign exchange - you can see a selection them on the home page of this website - and they usually offer a more favourable rate than the general rate given by the banks, they can arrange the transfer of your funds and can also fix a rate with you for a future date enabling you to budget more precisely.

II. LOCAL TAXES

Owners of properties are subject to a very small Public Tax which is incorporated in the electricity bill payable every second month.

III. PROPERTY TAXES

Owners of real estate property whose "assessed value" or "objective value" exceeds the amount of 175.000 Euro or 350.000 Euro for a couple are subject to property taxes. As an example for real estate property whose "objective value" is estimated at 322.800 Euro and only having one owner, the yearly tax would be about 440 Euro.

IV. PLANNING PERMISSION

According to the Greek laws, if a plot of land is not within the town plan and if there are no forest or archaeology restrictions, permission to build can be granted for any plot of minimum of 4,000m2. Permission can be granted for plots of land of 2,000m2 or less, if they are located within the planning zone or with frontage to principal municipal road. Inside villages, towns and cities planning permission can be generally granted for any plot. For some Greek areas there are specific Greek laws that apply about planning permission regulations. Most reputable agents can recommend skilled architects, and engineers who will give advice, work on plans and carry out the procedure for building permission. Building permits can be obtained through registered architects or engineers in Greece and cost approximately 4% -5% of the total cost of the building.

V. BUILDING COSTS

As a very general guide building costs per m2 are in the region of 1.000 to 1.500 Euro depending upon the materials used, in certain locations (difficult access etc.,) the building cost might reach 1.600 Euro.

VI. RENTING YOUR PROPERTY

Although many agents for Greece do not specialise in renting out property, most of them will recommend good properties which they know & the sale of which they have handled for short term letting to clients seeking to purchase. This is usually a free service of good will. Other agents specialise in letting and are the ones who should be approached if the property has been purchased with a view to investment.

VII. PROPERTY MAINTENANCE

During the last few years we have often been asked about Property Maintenance. Subsequently, several small companies or individuals in certain areas have set up in business to offer this service. Whilst we are happy to pass on their names and details to you, they do not form part of Crete Property Consultants.

VIII. PURCHASING FOR NON EU CITIZENS

Whilst EU citizens can freely buy properties in Crete, there are certain restrictions for those people outside of the European Union. However it is possible for non EU citizens to purchase in Crete. It will in general take longer time. It is necessary for your lawyer and notary public to apply to the Minister with all the documentation regarding yourself (curriculum vitae, six ratified photocopies of passport, certificate of birth and criminal record) and the documentation of the property (recent topographic diagram) and they will investigate your position in the community and ensure that you do not have a history of any kind which might be detrimental to the security of the island, this is because Crete is considered to be a border territory. Should you be prepared to go through this process then please fell free to ask for our up to date property lists.

IX. BUILDING FROM SCRATCH DOS AND DON'TS

When buying a plot and building from scratch! These are tips, and are not meant to put you off buying a plot and building the house of your dreams - but they might help prevent your dreams becoming nightmares! Please make sure that you have a proper contract for building work with the builder and/or architect in Crete in the same way that you would have in the UK if you were getting new building work or renovation done, for your own protection.

Architect and Contracts

DO make sure you are completely compatible with the architect you choose. Architects in Greece hold much more power than those in the UK it is not really possible to fire them. Once they have obtained your building permit they are responsible for signing to say the building's footings are correctly installed and for signing off the job so that you can have your services connected and your building is legal. Spend the time and money to take photographs of the land and get some sketch plans of your ideas drawn up here in the UK - this way you will be able to shop around for an architect in Crete who agrees with your ideas (in so far as they are legal within the building laws) without making the complicated decision of choosing an architect before he does your sketch plans. Make sure you speak the same language - and I don't mean Greek! For example if a sum of money has been put in the contract for tiles and you go to choose tiles with your architect and see some lovely expensive ones and you ask "can I have those?" and the reply is "yes, of course" this means that you can have them, but if they are for example £10 per square metre more than those quoted for in the contract then you will have to pay the extra .Check that IKA, VAT and the cost of the building permit etc., is included in your contract or not - if one quotation seems vastly more expensive than another it could be that the IKA, Vat and building permit price is included and the lower quotation does not include them. In general these costs are outside the contract Do have a clause in your architectural contract that you may choose the builder of your house independently of the architect if you so desire. Unlike the UK where an architect cannot also be a builder, in many cases in Greece the architect and the builder are one and this creates a conflict of interest. Bear in mind that a plot of land within the village limits or one with an old building on it (unless it is protected) poses less problems and expense than a plot outside the village/town limits.

Services

DO make sure that if you are buying a plot outside the village limits you know what your costs will be for services. You might see an electric pole nearby and be told the price of the one you need to your houses is only £600 - however you could be the unlucky one that is just out of range and a transformer might be needed - a transformer costs many thousands of pounds and the cost of it is not shared between you and anyone else who might build near to you later - they are the lucky ones and you could be the unlucky ones. For detached houses standing in their own plots outside the village or town limit now the electricity meter has to be placed in a concrete structure on the edge of your land. This has to be built by a registered electrician and will be an additional cost to the connection and or electricity pole charge.

Water

If there is no mains water nearby your land you might have to allow for a very large water tank to be built because water delivery is a set amount of gallons and it is more economic to have a tank which takes the entire load. If you have bought land which is rocky this could be an expensive item which almost certainly will be additional the quotation of the building. Sewerage

If the land is rocky building a seepaway tank could be costly because of the drilling involved, this is something you can get some kind of quotation on before you start.

DON'T Be put off buying the land of your dreams if the location is perfect, the price is right and your budget is just a little bit elastic, but if you budget is strictly limited do think twice since all sorts of things can arise with new build which are unforeseen

Buy land with access problems unless you are prepared to pay for the problem.

Buy land on a steep slope to the road unless you realise it will cost more to build, unforeseen shoring up, mid slide etc

RENOVATIONS TO OLD PROPERTIES

We can introduce you to builders who are known to us if you are considering renovation work and are happy to discuss our personal experiences/opinions with you, as we have renovated houses ourselves, but we have not got a financial arrangement with any builders or architects who undertake renovation works and we are not working in collaboration with them. Therefore we cannot be responsible for the quality or cost of your renovations. You should obtain quotes and commission any works you require directly with the builder/architect of your choice.