I. The process of buying property
On many levels, buying property in Greece –particularly if you are a foreign national – can be a rather complicated and sometimes confusing process. This is why seeking legal advice beforehand is so important. As a general rule, a foreign national can purchase real estate in most locations in Greece. However, non-EU nationals may be required to obtain prior approval by the local prefecture in certain areas, i.e. some regions of northern Greece, Rhodes and Crete.
Once you have found the property that suits you, and had decided to proceed with the purchase, you will then need to follow those specific steps:
1. Find a Lawyer
The Buyer should appoint an attorney with experience in property law as well as in transactions in general, in order to guide and represent them throughout the process.
It is recommended that you agree with your lawyer on their payment from the very beginning.
In case the Buyer is a NON European citizen or legal person and intends to buy property in border areas in Greece, they must be granted permission from the competent Greek authorities in order to be able to conclude the transaction.
2. Obtain a copy of the contract deed and perform a title search at the Property Registry and the Land Registry (if applicable)
The Buyer must get, usually through the broker or the vendor directly, the property deed (title). This can be done with the help of an attorney or a broker. The attorney is the required to search the title both at the Property Registry and the Land Registry (if applicable). Not all regions of the country have a Land registry, as Greece is currently undergoing the process of establishing a Land Registry. In areas that do not yet have a Land Registry, ownership is based on and secured by the local Property Registry.
The search must be carried out in order to ensure that:
- The vendor holds the absolute deed of the property
- The property is free of conditions or encumbrances.
- All taxes burdening the vendor have been paid.
- The construction was completed in accordance to all planning and building permissions.
Only if the property deed is secure should the buyer proceed to contract.
3. Find a Public Notary
Any purchase agreement, in order to be valid, must be signed in the presence of a public notary and therefore a public notary must be appointed once a solicitor is found. In most cases, the already appointed attorney would have a Public Notary with whom he usually cooperates. Public notaries do not represent the Buyer’s interests. They are public officials in the presence of whom the contract is read, understood by both parties and signed. The notary drafts the contract and – along with the attorneys of both parties – 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.
4. Issue a tax roll (registry) number (AFM)
AFM is the Greek tax roll number and every person, whether natural or legal, Greek or foreigner, must have one in order to carry out transactions of any kind, regardless of whether you reside in Greece or have a residence permit.
The buyer must be issued an AFM in order to be able to proceed with the purchase. AFM is applied for and issued by the Inland Revenue Service. To apply for an AFM at nearest tax office you usually need just a copy of your passport. It is a fast and painless process. This can also be done by a person who has a power of attorney (Apostile stamp is usually required) who will be the buyer’s authorized person for the tax authorities e.g. your relatives, lawyer or accountant.
5. Pay the transfer tax
The appointed Public Notary estimates the transfer tax according to the amount of the transaction and prepares the – so called – tax statements. Transfer tax must be paid to the local Inland Revenue Service by the buyer prior to signing the contract. This can be done with the aid of the attorney. The notary requires proof of payment (the receipt) in order to authorize the sale.
6. Signing the contract
In order to have a valid contract, it must be signed in the presence of a public notary.
The presence of attorneys, one representing each party, is not obligatory. Once the contract is signed, the notary or the buyer’s attorney registers the transaction at the local Land Registry or, if not applicable, at the local Property Registry.
7. Ratify the purchase – Conclude the process of the transaction
The purchase is concluded by the time the Buyer transcribes a certified copy of the new contract deed to the Land Registry or, if there is not any, to the Property Registry. From this moment on, the property right is transferred from the Vendor to the Buyer. It is recommended for the Buyer to obtain the relevant certificate from the Property Registry or the Land Registry (where is applicable).
The usual costs associated with this procedure that fall on the buyer.
Anyone purchasing land in Greece should have in mind that they are required to bear the following expenses in order for the transaction to be completed:
- Attorney’s fee: normally about 1-2% (subject on agreement) on the selling price, plus the legal research and any other legal advice that the solicitor had offered to the client.
- Public Notary’s fee: 1.3% – 1.6% on the value of the property.
- Transfer tax: This is payable to the local tax authority and amounts to 3,09% on the property’s value
- Property Registry/Land Registry: The fee payable to the Registries amounts to 0.50% of the property’s value in the case of Property Registry or 0.65% if there is a Land Registry (approximately).
- Brokerage fee: The maximum brokerage fee that you can be legally charged is 2.00% on the actual selling price, depending on the brokerage contract.
- VAT: In case that the vendor is the constructor you will be charged with VAT 24% (under prerequisites and in that case there is no transfer tax)
Buyer’s responsibilities after the purchase
The buyer has a yearly obligation to submit a statement including all his properties to the Inland Revenue service until 15th of May.
The “assessed (objective) value” of a property and its use
Most fees are based on the ‘assessed tax value’ of the property. It is the minimum accepted value for transaction purposes set by the State. How much lower depends on the location of the property – in resort areas or on islands tends to have a higher tax value than that in remote or less popular areas. The ‘assessed tax value’ is calculated by the local tax authorities based on government tables using criteria such as the location, size and characteristics of a property. It’s this value that is usually declared on the final purchase contract (title deeds).
In some rural areas the value can be negotiated, but in most areas it’s fixed. You should ask your lawyer to ascertain the ‘assessed tax value’ of the property you plan to buy and to obtain confirmation in writing.
Ensuring the ownership of property in Greece
The ownership of property in Greece is secured by a state authority called the Property Registry. Property deeds are kept there and this is where all encumbrances on properties are registered. Property is filed under the names of the owners and lawyers are entitled to check property belonging to any individual or company. A title search is performed in order to find out if there are any claims, liens and encumbrances on the property. A title search will also show if the property was properly transferred. This is routinely done prior to signing a contract.
Greece is currently undergoing the process of establishing a Land Registry.
II. FINANCING AND OTHER FINANCIAL ISSUES
Transferring funds from
my home country to pay the vendor
This can be done via a simple bank transfer from your account back home to your account in Greece. Buyers are advised to officially document any funds imported for buying property so that in case of a subsequent sale of the property, the proceeds can be repatriated.
Property finance in Greece
Greek banks are well developed and equipped in offering a variety of financing programmes. They have branches throughout the world and similarly many international banks have branches in Greece. Financing property purchase in Greece can be arranged by both Greek and international banks that have branches in Greece.
Property is insured through insurance companies. Property insurance contracts cover all types of possible damages i.e. fire, earthquake, natural disaster, storm, theft, third party liability etc. Insurance costs are normally billed bi-annually though annual payments are also acceptable. Property insurance is not obligatory, but is required by the financial institutions mortgaging the property.