Buying Greek Property & Real Estate In Greece
NB: Any monies imported into Greece for property purchase should be documented and receipted
Capital gains tax is usually exempt when using the proceeds to buy another home in Greece. However, capital gains tax can range between 10-30% but reduces over the time of occupancy
Check within each area of Greece as to any restrictions regarding security issues as there may be increased close to Turkish areas.
Property Prices in Greece Guide
Range considerably from:
From ?20,000 / ? 28,000 for rural properties in need of
refurbishment.
From ?25,000 I? 35,000 for building plots close to the coast
From ?30,000 / ? 42,000 for coastal apartments/studios
From ?100,000 / ? 140,000 plus for Townhouses and small
Villas.
NB: Be sure to check with local authorities regarding building restrictions for new properties.
Annual Wealth Tax is charged on all properties over a specific value and is charge as a singular figure percentage between 1- 2% against the properties declared value.
Where to buy in Greece
With over 2500 islands in Greece you will most certainly be spoilt for choice. A few tips: coastal properties around holiday resorts will be more expensive. Try moving inland a little where you will get a lot more for your money but may still be able to take advantage of living near to a resort. The mainland can be more expensive especially around the capital Athens.
Living Costs in Greece
As I'm sure you have probably already been to Greece on holiday and as such you will know that the standard cost of living is quite reasonable compaired to other EU countries. However, white goods like washers/fridges etc can be very similar to UK goods and cars can be somewhat expensive.
Buying Property in Greece
Once an agreement has been reached as to the price, a contract is normally drawn up and would include price, completion date and any other relevant information for the sale. A deposit can range from 10 - 30% and a mortgage can be secured by either a Greek Bank or an International Mortgage Broker. The contract is signed and an agreement is reached between completion before a Notary who will normally charge around 1-2% of the property value as his fee
Solicitor / Lawyer
Wherever possible, try to enlist the services of a local Lawyer or Solicitor to act on your behalf, preferably one who speaks English. They will be responsible for paying any taxes and registering the property with the land registry in Greece. They will normally charge between 1 - 2% of the sale value of the property.
Fees
Allow up to 18% for your fees just to be on the safe side as purchase tax is charged depending on the value of the property at between 9-11%. Land registry fees should be about 0.4% of the assessed value plus a small sum for stamp duties and certificates. Real Estate agent's fees are usually paid by the buyer and seller.
Property Tax
Very good value and is normally around 0.25% of the property's declared value paid annually. This will cover local services. In addition, there is a community tax of around 3% of the property transfer tax which is paid to the local municipality for general public services.
Mortgages
Greece is slowly changing is mortgage and lending criteria system which used to be quite difficult - to fall in line with other EU countries but beware as interest rates in Greece can be among the highest in the European Union. Some people have used their existing properties at home to raise finance to buy their Greek property outright thus saving on interest and hassle. Mortgages are available on residential properties through a couple of International Mortgage Brokers.
1. Formalities
All EU citizens have equal rights concerning the purchase or sale of property in Greece. Non EU citizens are also free to buy property in Greece, however with some restrictions as described bellow. The documents required for signing a property-purchase contract are:
a) Both the buyer and the seller must provide:
-- A valid passport (or a legal identity card for EU citizens only)
- A Greek fiscal number which is obtainable by non Greek citizens, within 5 working days by the Greek Tax Authorities.
b) The seller should provide a "clean" B' Tax certificate issued by the competent Tax Authority, according to Law 1882/1990 proving that he has no outstanding debts towards the Hellenic Fiscus.
c) An additional special permission is required for the purchase of properties close to the Greek borders. Such permission will be issued by the local Department Authorities and is not granted to non EU citizens.
According to the Greek law, the purchase contract, known also as a "Purchase Deed", is signed by the buyer and the seller in the presence of:
- A Notary Public
- A lawyer appointed by the buyer
- A lawyer appointed by the seller
The buyer's lawyer is liable to investigate that the property being bought is free and clear of any charge, lien, mortgage, and especially of estate taxes (viz, land property and inheritance) or municipal taxes, damages to neighboring owners and so forth. This investigation, held by the buyer's lawyer, is the guarantee that the Title Deed of Ownership and the relevant certificates issued by the land registry, show that no third party claim or challenge of any kind exists.
Special attention must be paid to assure that the property is sold and will be delivered to the buyer, with the benefit of full vacant possession.
2. Additional cost when purchasing property
Additional costs for the purchase of property, come in the shape of:
>11% "property transfer tax" on the contract price, payable when buying only. The declared contract price cannot be less than the published government value which is usually far below the real cost.
> 1-2 % lawyer's fees on the contract value, subject of agreement between the lawyer and his client.
> expenses of 1,5% on the contract value, for the completion of the contract, like notary fees, registry etc..
All expenses for the conclusion of the final contract, including the relative tax of property transfer will be borne by the buyer. However, each contracting party will pay the fees of his legal representative who will be present at the signing of the contract, as is required by the Greek Law.
3. Commission payable to a Real Estate agent.
In Greece it is customary that both seller and buyer will contribute a commission payable to the real estate agent, for introducing the buyers to the owners.The exact amount of this commission is a matter of agreement between the real estate agent and his clients. It is understood that the agent's commission for his services, is due only in the event of a conclusive transaction
4. Annual taxes to be paid by property owners in Greece
There are no annual taxes to pay in Greece, if the total value of the properties owned by the same person, does not exceed the value of 200.000 Euros. The valuation of properties, is carried out by the government, which provides published values, announced for every type of property. As already mentioned above, these values are usually far below the real cost.
Guide to Greek Mortgages
When it comes to taking out a Mortgage in Greece, loans are available only in Euros. The minimum loan amount in Greece is 35,000 Euros, and there is no maximum loan amount stipulated. When it comes to loan terms, there is no minimum term of lending, but the maximum loan term is 25 years. The maximum age limit on Mortgages is 70 years old.
Banks in Greece charge a 1 per cent arrangement fee. Loans in Greece are available on a repayment basis only, although lenders offer 2 years interest only followed by a reversion to repayments. Greek mortgages generally do not charge for total or partial early repayment. In Greece, borrowers can take out a mortgage to buy property, improve their house, or purchase land.
Maximum loan to value in Greece is 80 per cent of the purchase price or value, depending on which is lower. When it comes to legal fees and valuation, the buyer must pay for all. Loans are also only provided to borrowers who can fully prove status - income and outgoings.
When you want to Build in Greece you need to ensure that you have funds to start the build,and a mortgage can be arranged with the Bank for the finishing of the property with funds being released at the request of the builders providing a satisfactory valuation has been carried out. Each valuation report costs approximately 100 Euros. The level that will be released at each stage depends on the bank and the build programme.
How much can I borrow on a Greek mortgage, and what proof of income is required?
There are no non-status/ self-certification mortgage facilities available in Greece , however renting out your property is permitted, therefore all loans need to be supported by a minimum of proof of income. If you are employed, you will need to produce your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need copies of your Audited Accounts together with you last 12 months business and 6 months personal bank statements.
Greek Lenders will not take into account any proposed rental income from the property that you wish to buy. Your loan will be based on your personal (or joint) 'net' pay, and is calculated on an affordability basis. For you to be considered by the lenders in Greece your total outgoings must not exceed 35% of your net monthly income.
A simple example; If your total net monthly income is 1,000, your total out-goings must not exceed 350, you must have 650 per month to be put towards the mortgage repayments to be eligible.
WE WILL GUIDE YOU THROUGH THE PROCEDURES TO EXPIDITE A MORTGAGE
