Tips to Buying Property in Greece

Tips to Buying Property in Greece

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Where to Look

Overseas Property Mall Buyers Guide Series to GreeceWith so much that is iconic in the realms of culture and tourism, it’s difficult to find a clear-eyed assessment of the relative merits of different parts of the country. However, given the distance from Northern and Western Europe and the country’s own topography, it’s worth remembering practicalities such as the proximity of international airports.

Mainland destinations such as the Halkidiki peninsulas in the north (close to Thessaloniki) and the Peloponnese or the island of Crete have the edge in terms of accessibility. It’s also worth keeping a look out for news of new budget airline routes such as GB Airways’ plans to serve Cofu, Mykonos and Rhodes this summer. The level of exclusivity that you are looking for will also narrow the field.

Snags, Points to Remember, Legal and Otherwise

There are some extra controls on non-EU nationals acquiring property in places such as Rhodes (which is adjacent to Turkey) and the country’s northern frontier with other Balkan states. Greece has no land registry so property transactions will normally be accompanied by a topographical survey of the boundaries with neighbouring properties.

Property purchases are almost exclusively in Euros and purchasers normally expect to pay a 10% deposit when the initial sale agreement is signed; THIS IS NOT NORMALLY REFUNDABLE.

There have been some cases of planning permission being revoked with allegations of corruption being made, as in Porto Carras in Halkidiki.

The Law Society provides a handy search engine for enabling you to look for lawyers by country and speciality. Investors are recommended to retain the services of bi-lingual property consultant. Payments for properties must be made from accounts at Greek banks although these are fairly easy to open. The authorities’ concerns about tax evasion and money laundering mean that it is important to obtain a ‘pink slip’ when making wire transfers into your Greek bank account. Vendors and purchasers pay a percentage commission at the time of a property transaction

Greeks themselves tend to prefer new build properties which means that older residential property may be more attractively priced though it may also need significant renovation. The amount of renovation required for older ‘character’ properties can be prohibitive from an investment angle.

Forest fires are a perennial problem in northern parts of the country such as Corfu or Halkidiki (which had spectacular fires in 2006).

Property Taxes

All new residents in Greece are required to obtain an ‘AFM’, a tax role number, from the tax authorities.

2007 has seen an important change in the tax regime relating to property in the announcement of a complete overhaul of the country’s property values for taxation purposes, generally bringing official valuations into line market ones. The effect of this will not only be to increase some property taxes but also to raise the cost of some ancillary charges such as the fees payable to notaries.

Property taxes will rise by 16% in planning zones and 37% for developed land. Capital gains tax is to be introduced on properties purchased after 1st Jan 2006. For those sold from 3½ to 5 years after the date of purchase the tax will be levied at 20%. For longer periods of ownership capital gains tax will diminish in steps to a zero for properties owned for more than 25 years.

Purchasers of properties incurring capital gains tax will avoid the 9 to 11% property purchase tax but will have to pay a 1% exchange fee (a stamp duty by another name?)

From the beginning of 2006 VAT at 19% has been imposed on new build. Read the Hellenic Communication Service webcite for changes to property valuations for tax purposes.

What to Read

For a general introduction to residence in Greece read ‘Going to Live in Greece‘ by Peter Reynolds. and are also worth a visit.