Thinking of a beachside place on a small Aegean island? Or looking at a pad in downtown Athens? Getting a place in Greece can be a dream for many but the right groundwork needs to be done to avoid the process from turning into a nightmare.
Rules and red tape apply in every market a home buyer does business in, though in Greece, the list of boxes that need to be ticked is a bit longer than elsewhere.
As always, getting the right legal and tax advice is crucial.
Once the negotiations have been completed, then starts the battle with bureaucracy, says Guy, a fund manager from Israel. He purchased a holiday home in Crete more than ten years ago and recently acquired a second property on the Greek island, which he is now renting.
“It is very common for deals to fall through for technical reasons, the building could have been illegally constructed or an unexpected name pops up as being a part-owner of the property. This was the case in the first few properties I had spotted,” he said.
“It takes months to get everything sorted out and to finish the deal. The process can be challenging but at the end of the day, it is worth the effort. You need to keep reminding yourself of the goal at hand,” he added.
Among the charges a buyer is hit with is a 3 percent property tax, while real estate agency fees are usually between 1.5 – 2.5 percent of the sale price. Keep in mind that many transactions in Greece may be held privately to avoid these costs and property owners may advertise and represent themselves. Notary and lawyer fees could either be a set cost or up to 1.2 percent of the total transaction value (plus 24 percent VAT).
Accountant Haris Markidis, who owns Logistcenter, points out to IN+SIGHTS GREECE that foreign buyers need to get a Greek tax file number and appoint a legal tax representative in the process. The property needs to be declared to authorities in the E9 tax form, and every year the owner is hit with the ENFIA property tax.
This is a tax due in September every year, adds Markidis. Experts have identified four key areas which the acquisition process focuses on, among others:
When selling or transferring buildings or land, owners are required to submit a Declaration of Legality of Property Status. This certificate describes what has actually been built in terms of size and use, compared with what has actually been declared to authorities.
2-Energy Performance Certificate – EPC
When selling or renting residential and commercial property, owners are required to submit an energy performance certificate. To issue this certificate, an energy inspector conducts an on-site energy survey and determines the level of efficiency consumed by the property.
3-Hellenic Cadastre – National Land Registry
All property and land now must be registered by location and title ownership, allowing owners to secure the legality of their property.
4-Electronic Building ID
All building constructions need to be registered electronically and assigned a unique ID code. Owners will not be able to sell, rent, transfer property, or even file a tax form on it without a building code.