The geographical position of Greece provides the advantage to be a political, diplomatic and commercial center of South-Eastern Europe, as a member of the European Union and of the Schengen zone, while the unmatched natural beauty of the country every year attracts millions of tourists, making it one of the world’s most popular tourist destinations.
The dynamic combination of the geopolitical position and the natural beauty of the country placed the country at the center of investors’ attention. One of the key areas of investment, that is inextricably linked to the Greek culture, it is the real estate market, which is, indeed, in recent years tends to growth in attracting new investors from foreign countries.
The process of purchasing property in Greece, is closely intertwined with the traditions of the Greek family, that is significantly focused on living in its own home, is governed by the strict legislative framework, providing thus the formality of the process and, consequently, its absolute safety. While the process of purchasing real estate by foreigners – that is, citizens of countries outside the European Union – basically, the same procedures are applied.
Concretizing the above-mentioned legislative framework, one of the main strongholds is a tax system. It should be emphasized that among the Greek citizens and foreigners there is no difference in the taxation of real estate.
As for the safety of legislation, it is exactly through the observance of all the formalities of this process its indefectibility is ensured. First of all, the legal review is carried out on each property to be sold: a thorough inspection of the property rights in the geographically competent real estate register, and, in particular, the property is examined both in terms of property rights and for any kind of encumbrances (mortgage, arrest, contestation).
There is also technical inspection conducted by the private engineer in the competent urban planning department, and in some cases, there is considered a question of the possible existing encumbrance of the forest inspection and archaeological service. It is noteworthy that for the signing of sale and purchase contract must be provided a certificate of an engineer that attests the legalization of all the possible illegal building on the property. Finally, the seller is verified in the tax service about any debts: the presentation of the tax clearance certificate is one of the key documents for the sale and purchase transaction.
In addition, another parameter related to property rights, refers to the independence of the spouses. This means that each spouse acquires and transmits independently any property which is in his/her possession, without the consent of the other spouse.
The legislative framework in Greece has one peculiarity in the sale of real estate: the owner of the property is also the owner of the plot of land on which the building is constructed. It is provided by legislation that in case when the owners of the building decided to implement its demolition, they have the right, according to the proportion of co-ownership of each of them, to build a new building, potentially favorable to them in terms of the floor area of constructed property, which can be increased on the basis of the current rate of construction at the time of building.
Title transition and registration is a totally transparent, easily controlled and public procedure in Greece. The country is a European Union member since January 1981, so both national and European legislation are applicable.
In case one party of a property transaction is not a Greek citizen, the following actions should be performed:
Drawing of a Power of Attorney. It is done by a Greek notary in the presence of an accredited translator (compulsory). This Power of Attorney authorizes the lawyer whose name is stated in this document to act on the foreigner’s behalf. It also contains the powers granted to the lawyer for the purposes of the Principal Property Purchase Agreement drawing and execution. Thus, the buyer doesn’t have to deal with long and complicated legal formalities and procedures.
The authorized lawyer, acting in the name and on behalf of his principal (buyer), registers him as a tax payer in Greece and opens a bank account in a state bank (in the buyer’s name).
The authorized lawyer thoroughly checks the state Property registry for the property history and for other details (such as existing or previous mortgages, encumbrances or other charges, existing and previous contracts and agreements concerning the property etc). After he finishes the property checkup, he draws a report, signs and certifies it and delivers it to the prospective buyer.
The authorized lawyer draws a Title Transition Tax statement and submits it to the local tax body. The tax rate amounts to 3,09% if the property Construction permission was issued prior to 01.01.2006, and to 24%, if it was issued after this date.
Both parties (Buyer and Seller) sign the Principal Property Purchase agreement in the presence of a notary and an accredited translator. After the agreement is signed, the lawyer registers it in the State Property Registry which is the final, integral and compulsory stage of the property purchase transaction.
After the Principal agreement is signed, the Buyer receives the full package of documents mentioned above which are duly notarized and translated, along with the Construction Permission, Power Consumption Certificate, Property layout plan and its topographical plan.
Documents required for Property Purchase in Greece
Property purchase procedure in Greece is very simple and it takes shortest time. Nowadays it will only take you 10 working days to obtain full title of some Greek property. You might have heard that it is not quite so, and such opinion stands to reason, but it is not true anymore: before June 2011, there was a boundary regime law which required that the buyer willing to purchase property in some area close to the state border had to apply for permission from the Greek Ministry of Defense. Because of that the buyer had to collect a large package of documents and the whole transaction could take several months. Now the procedure became much simpler, and all property purchase formalities can be finalized within 10 days. The list of documents required also became much shorter.
The list of documents required for property purchase:
Valid passport
Valid Greek or Shengen visa
Document confirming permanent residence address (national ID/passport of the country of residence)
Statement of employment, i.e. a document confirming main occupation of the prospective buyer (type of occupation is not relevant).
Copy of Tax declaration (or Income Tax Statement, or any other income statement (salary statement, bank statement, etc). The amount of income displayed is not relevant and it is not correlated with the price of property. This document is required for registration as a Tax Payer in Greece.
Property Purchase Contract: fees and additional expenses (in case the property is newly built):
If you sign a property purchase contract, you will have to pay the following expenses and fees:
Building permission before 2006:
If the actual property price amounts to €100.000 and tax is 3,09%, then expenses calculate as follows:
A Lawyer’s fee: 100.000х1,5% = 1.500 € (plus 24% VAT which is added up to this amount) = €1.860
A Notary’s fee 100.000х1,5% = 1.500 € (plus 24% VAT) = €1.860
Title transition tax: 100.000х3,09%=3.090 €
Mortgage registry fee: 100.000х0.5% = 500 €
Estate agent’s fee: 100.000х2%= 2.000 € (plus 24% VAT)= 2.480 €
Total amount: 9.790€ (This amount can’t be considered a service fee calculated based on property price).
Building permission after 2006:
If the actual property price amounts to €100.000 and tax is 24%, then expenses calculate as follows:
A Lawyer’s fee: 100.000х1,5% = 1.500 € (plus 24% VAT which is added up to this amount) = €1.860
A Notary’s fee 100.000х1,5% = 1.500 € (plus 24% VAT) = €1.860
Title transition tax: 100.000х24%=24.000 €
Mortgage registry fee: 100.000х0.5% = 500 €
Estate agent’s fee: 100.000х2%= 2.000 € (plus 24% VAT)= 2.480€
Total amount: 30.700€ (This amount can’t be considered a service fee calculated based on property price).
For properties that are not newly built (same as newly built properties with building permission before 2006):
If the actual property price amounts to €100.000 and tax is 3,09%, then expenses calculate as follows:
A Lawyer’s fee: 100.000х1,5% = 1.500 € (plus 24% VAT which is added up to this amount) = €1.860
A Notary’s fee 100.000х1,5% = 1.500 € (plus 24% VAT) = €1.860
Title transition tax: 100.000х3,09%=3.090 €
Mortgage registry fee: 100.000х0.5% = 500 €
Estate agent’s fee: 100.000х2%= 2.000 € (plus 24% VAT)= 2.480 €
Total amount: 9.790€ (This amount can’t be considered a service fee calculated based on property price).