Buying property in Greece

 The ‘what and how’ of buying property in Greece

A. TRANSACTIONAL PROCEDURES
Once the desired property is located, what are the proper procedures for its purchase?
Assuming that you’ve located the property you want to buy, there some specific steps to follow in order to complete the transaction:

1. Appointment of Legal Representation (Attorney). The attorney assists, guides, and represents the buyer through the process. Our company helps the client by either assigning one for him (subject to the client’s consent, of course), or by providing a list of reputable attorneys specialized in real estate transactions.
NON European citizens need to familiarize themselves with a number of documents necessary when purchasing property in border areas.

2. Appointment of a Notary Public. For a property purchase agreement to be legal and valid, it must be executed in the presence of a Notary Public. To avoid any misunderstanding, we must note that the notary does not in any way represent the interests of the buyer. He or she is an authorized public official in whose presence the contract is read out loud, and signed by both parties once they have expressed their consent to what was read to them. The procedures undertaken by the notary are the actual drafting of the contract, and verification and registration of the transaction into the public records. The latter assures that the buyer acquires legal title to the property and is recorded as the rightful owner. The notary drafts the contract and is responsible for the verification and registration of the transaction in the public records, so that the buyer acquires the official title of the property. Our company can either propose a list of experienced notaries for the buyer to select from or assign by default the notary handling the contracts of a specific project (subject to the client’s consent).

3. Obtain a copy of the Deed and initiate a title search at the Registry of Mortgages
The contract or deed is obtained from the seller by the buyer or his attorney. The buyer must obtain the contract deed (title) held by the vendor. With the deed in hand, the attorney is responsible for carrying out the search of the title deed at the Registry of Mortgages. This is a vital step of the transaction in order to ensure that:

  • The seller is actually the true holder of the absolute deed of the property.
  • The property is unencumbered by liens.
  • All relevant property taxes burdening the seller have been paid in full.

The construction was completed in accordance to all planning and building permits, adhering to all relevant regulations.
4. Issuance of a Tax Registry Number (AFM). The buyer must have a Tax Registry Number before he can make any transaction. An application must be made to the Internal Revenue Service which then issues the number.
5. Payment of Transfer Tax. This tax must be paid to the local office of the Internal Revenue Service before the contract is signed. The payment may be made by the buyer or his legal representative.
6. Signing of the contract. The contract must be signed in the presence of a Notary Public in order for it to be valid. He or she then records the transaction at the local Registry of Mortgages.
7. Effective transfer at the Registry of Mortgages. The buyer’s attorney ascertains that the title of the property is duly transferred to the buyer's name by obtaining the certificate of registration from the Registry of Mortgages.
8. Notice to the Land Registry regarding the transfer (if applicable). A copy of the title and the certificate of registration from the Registry of Mortgages must be submitted to the Land Registry in order to register the property under the buyer's name. As Greece is still undergoing establishment of a national Land Registry, some regions do not yet have a Land Registry. In these areas, security of the property title is done by the local Registry of Mortgages.

What are the costs associated with purchasing property that must be paid by the buyer?

To complete the purchase transaction, the buyer must pay the following costs:

  • Attorney’s Fee. The fee is estimated at 1-2% of the selling price, is subject to agreement and may be incremented by any costs associated with the title search and any costs incurred by the provision of additional legal advice.
  • Notary Public’s Fee: 1,3% of the value of the property.
  • Transfer tax: This tax is payable to the local Tax Office and is calculated as follows: 9% for the value up to 15.000 Euro plus 11 % for the value above 15.000 Euro. For areas not covered by a fire department these percentages are 7% and 9% respectively.
  • Municipal tax: Payable to the local Tax Office and calculated as 3% of the transfer tax.
  • Registry of Mortgages: The fee payable to the registry of mortgages amounts to 0.45 % of the property value.
  • VAT Tax 19% for constructions built after 01/01/2006.
  • The ZAFIRATOS GROUP prices are final. No hidden costs and no brokerage fees.

Are there any periodic costs on property ownership?

Annual property taxation in Greece is limited to the following two taxes:

Municipal tax: The municipal tax is included in the electricity bill. It varies from municipality to municipality and ranges from 0.025 % - 0.035 % of the assessed value of the property.
Annual property tax: Property owners are subject to an annual property tax only in the case where the assessed value of the property they own exceeds 243.000 Euro. The tax is calculated as 0.3 % - 0.8 % of the property’s assessed value.
What exactly is the “assessed value” of a property and how is it used?

The "assessed" value – also known as "objective" value - of a property is set by the Internal Revenue Service and it is the minimum accepted value for transaction purposes. The assessed value of a property is calculated on the basis of public data tables listing prices per square meter in a particular zone as well as other location or specific property characteristics. Assessed Value Tables are a matter of public record and are thus easily obtainable. This value is used for calculating the transaction costs such as transfer tax, as well as the annual property taxes.

Which state authority secures property ownership in Greece?

The Registry of Mortgages. All title deeds as well as any encumbrances or liens on a property are properly registered and kept at the Registry. Titles are filed under the owner’s name and may be checked by attorneys performing title searches to assure that there are no liens, third party claims, or other encumbrances on a particular property. A title search will also reveal whether or not previous transfers of the property were valid or properly done. The title search process always proceeds the signing of the contract.

B. FINANCING THE PROPERTY PURCHASE

What is the procedure from transferring funds from abroad to pay for the purchase of property?

Funds can be simply transferred from the buyer’s bank account abroad to his bank account in Greece. The buyer should however make sure that all fund transfers be officially documented as this will facilitate repatriation of funds in case he subsequently sells the property. Another issue to take into account is income taxation in Greece.

Are bank loans available for buyers of property in Greece?

The Greek banking system offers a wide range of financing options for the purpose of buying property. Most Greek banks have a network of branches abroad. The buyer could also go through an international bank with branches in Greece. Either is acceptable and the final decision depends on the options and financing packages offered.

What is the situation with Value Added Tax in Greece?

VAT in Greece is imposed on all purchases of goods and services and the rate applicable to real estate is 19%.

What is the situation in Greece regarding property insurance?

Insurance companies provide a variety of insurance packages especially for property. Although insuring a property is not mandatory by law, it is required by financial institutions if there is a mortgage on the property. Insurance premiums are usually payable semi annually or annually. Property insurance covers a wide range of liabilities and hazards including fire, theft, earthquake natural disasters, third party liabilities, etc.

Athens Office: 78 Marathon Street 16673 Panorama, Voula
Tel & Fax: (0030) 210 89 95 499, Mobile: (0030) 6944 344 683, (0030) 6977 090 163
Kefalonia Office: Mavrata Village 28082, Tel & Fax: (0030) 26710 81618, E-mail: divacasa@hol.gr