Legal Information - Greece
Legal information for buying property on the Greek Islands
NEWS:
02 November 2011 - NEW PROPERTY TAX LAW GREECE - UPDATE CLICK HERE
July 2011 - UPDATE TO TAX LAWS FOR PROPERTY OWNERS IN GREECE CLICK HERE
February 2011 - NEW TAX LAWS FOR PROPERTY OWNERS IN GREECE CLICK HERE
Securing Your Home
Once you have found your property and agreed a price you will need to make a 10% deposit to secure it. This is not returned if you decide to drop out of the sale. It is essential that you secure the services of a lawyer to help in the transaction process. The lawyer will advice you in the procedures, it is usual for this deposit payment to be fully documented and you can subject this payment to a refund being made if the title searches or other legal matters prevent the sale from going ahead on behalf of the vendors. If you have any doubts about the legalities of the sale, you must ensure that it's your 'head not your heart' that rules in this matter and that you are absolutely satisfied with the legalities of the sale before you proceed.
When your deposit has been drawn, this confirms that the vendor is proceeding and at this point should take the property off the market to await completion of contracts handled by both parties lawyers. Once this has been done a date will be agreed for you to pay the Purchase Tax, balance of purchase price and legal fees.
Legal Help
Unless you already have a lawyer familiar with Greek law it is best to engage a local lawyer who is familiar with the area you intend to buy in. They will be used to dealing with the local sales agents and Public Notaries, in addition they will often have knowledge about the vendor and any issues that may not be immediately apparent. They will also be well acquainted with local planning regulations and any restrictions that may apply.
Your lawyer will carry out all the necessary searches, and lawyers are required to make representation of all legal procedures before the Notary Public who oversees the searches and who will not proceed the transaction agreements until he/she is satisfied with land registry searches.
Before the contracts are signed you have to pay the Purchase Tax, after this the notary registers the deeds with the Land Registry in your name. In some locations there are two kinds of Land Registries, firstly the older way in which the registration is done in each owner's name and secondly the new way (Cadestre) in which each property has a number and the registration is done for the property.
If you cannot read Greek, it is advisable that you have an interpreter present so that the contracts can be translated for you before you sign them. You can choose your own translator or ask the notary to to find someone for you and you can insist that he/she is present when you sign the contracts. In small locations there are not usually professional interpreters so it can be difficult to find someone if you need an interpreter who speaks a language other than English, German or French. After the contract is signed you can ask that a translation copy be made for you, this is done at the Ministry of Foreign Affairs you have to pay for this and it also takes time.
Insurance
If you intend to use your home only for holidays insurance can be arranged through your Greek Bank for fire and storm damage. However insurance for theft may only available if you live in your property throughout the year. There are companies in the UK that can offer full insurance (3rd party for example)
Setting up a Bank Account
All transactions are in Euros. You will need to set up a Greek bank account to pay for your legal advice, transfer money and pay bills. You must now have a Greek Tax number to open an account. Payment of utility bills can be set up very easily by direct debit via the bank, and money can be transferred online.
There are foreign exchange brokers like Moneycorp and Excel Currencies that can transfer large amounts to Greece according to the commercial rate.
Our Finance section has a guide on the best ways to transfer funds to Greece.
Purchase Tax
Purchase tax is payable, for plots and houses situated outside of the borders of a village or town. It is paid at 7% up to a total purchase price of 15,000 euro, 9% is payable on amounts exceeding this. For properties situated within the borders of a town or village the tax is calculated at 9% and 11% for the same amounts.
Local Municipal Tax or Community Tax
Currently calculated at 3% of the Purchase Tax and is paid together with the Purchase Tax.
Public Notary
Approximately 2.5% of the objective price or Tax Office estimation of the value or on the price declared in the purchase contract if this is higher.
Land Registry
0.45%of the assessed price plus a fixed charge, currently15 euro.
Lawyer
Your Lawyer or Solicitor will normally charge between 1% and 2% of the sale value of the property. If he/she acts as a Power of Attorney on your behalf he/she may charge more.
Real Estate Agent
The Real Estate Agent's fees are usually paid by the buyer.
All expenses for the conclusion of the final contract, including the tax on property transfer will be borne by the buyer. Each party will pay the fees of their legal representative who must be present at the signing of the contract, this is required by Greek Law.
Annual Property Tax
There are currently taxes to pay in Greece. Foreign owners of property in Greece are obliged to file annual income tax returns to prove that you are able to afford the costs associated with maintaining a property.
The I.R.O (Internal Revenue Office) assumes the income you need to prove to maintain your property (calculations according to square meters of property), the pool and the car you own, there is also a yearly income amount that is assumed you will need to support yourselves in Greece (whether you have been to Greece or not throughout the year) The amount is 3,000 euros for unmarried owners and 5,000 euros for married couples (if the property is in both names). These amounts are added to your total annual tax bill. For this additional assumed amount you need to pay extra tax of euro 230 for unmarried owners or, euro 380 for married owners.
Proof must be attached to your tax return that you have imported into Greece the relevant amount during last year by transfer from a non-Greek bank to your Greek bank. (Please note that the name on the sending account must match the name on the beneficiary account).
Proof is in the form of the certificates from the Greek bank (called in the past – pink slips). If you don’t have that proof than you will be taxed by 5% as if that amount (assumed income) was really income.
The taxation is 5% for the amount of euros you are not able to prove importation for (pink slips).
You should ensure that whoever is to make your tax return has plenty of notice. Tax returns can now be filed electronically and individual code numbers have to be issued.
Tax returns for foreigners are filed during May and any “pink slips” should reach your tax representative by mid April at the latest
An additional (approx.) 53% of the tax is charged as advance payment for the next year which can be returned if you have the necessary pink slips to prove and cover the amount to you would need to import.
If you do not pay this tax then you will be fined and if you owe more than 5000 euro you could e sent to prision.
To explain
Property owners in Greece are now charged ‘a living expense tax’ of euro 3000 if you are a single person and euro 3000 for each single owner of the same property. So, if there is 3 single owners of one property you are charged euro 15000. It is euro 5000 if you are a married couple.
You are then charged tax for each square meter of property you own. The pool and type of car you own are also calculated taxed accordingly. (Please see the culculation table below.)
Before you panic, you do not have to pay euro 3000 or, euro 5000 and then for each added square meter of property per year. YOU ONLY HAVE TO PAY 5% of the entire culculated final amount.
For example it is: 230 or 380 euros for assumed income to support yourselves in Greece and then, 5% of each square meter of property. If you own a car and pool, It is 5% for type of car and pool.
Property owners only pay tax on the on the amount they cannot prove they have imported into Greece. So if your final tax amount is culculated at 6000 euro per year and you have not imported any euros. Your tax bill is 300 euro. If you have imported 2000 euro your tax bill for the year will be 5% of the remaining 4000 euro (euro 200 to pay). If you can prove import for the full amount then you pay zero tax that year.
How do you import your euros into Greece?
You can transfer your money directly into your Greek bank account
You can withdraw money from your UK GBP from a cash machine in Greece.
BEWARE: IF FOR EXAMPLE, YOUR ACCOUNT IS WITH THE NATIONAL BANK OF GREECE YOU CAN ONLY WITHDRAW MONEY FROM A NATIONAL BANK OF GREECE CASH MACHINE – THE CASH MACHINE MUST MATCH THE BANK YOUR ACCOUNT WITH. YOU MUST KEEP THE SLIP THAT COMES OUT OF THE MACHINE.
Take your cash machine slips to the bank with your bank book and ask them for pink slips. Remember to ask for a pink slip for all the money transfered into your account from abroad. Give your lawyer the pink slips you got from the bank and have your tax return done.
A new additional property tax was announced On Sunday 11 September 2011. The property tax will range from €0.50 cents to €10.00 per square meter (averaging at about €4 per square meter), depending on the type of area the property is in. It will be in effect for a period of two years and will be collected in instalments through electricity bills.. UPDATES TO FOLLOW...
Property Tax Law news for Greece.
30 SEPTEMBER 2011 - NEW PROPERTY TAX GREECE CLICK HERE
July 2011 - UPDATE TO TAX LAWS FOR PROPERTY OWNERS IN GREECE CLICK HERE
February 2011 - NEW TAX LAWS FOR PROPERTY OWNERS IN GREECE CLICK HERE
Mortgages
Greece is slowly changing its 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 International Mortgage Brokers. Conti a Licensed Credit Broker, offer mortgages for property in Greece to U.K buyers.
See full Article: Mortgages for Greece
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:
Both the buyer and the seller must provide:
1. A valid passport (or a legal identity card for EU citizens only)
2. A Greek fiscal number which is obtainable by non Greek citizens, within 5 working days by the Greek Tax Authorities.
3. The seller should provide a series of certificates such as a "clean" B' Tax certificate, a certificate from the Municipality that he/she doesn't owe the Annual Property Tax, a certificate that no Inheritance Tax is owed ( if the vendor owns the property through inheritance) etc.
4. 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.
5. Non EU citizens owning property does not confer EU citizenship, nor does it allow you to enter the EU without a normal visa.
According to Greek law, the purchase contract, known also as a "Purchase Deed", is signed by the buyer and the seller in the presence of :
A Public Notary
A lawyer appointed by the buyer
A lawyer appointed by the seller
The buyer's lawyer is liable to investigate at the Land Registry that the property being bought is free and clear of any charge, lien, mortgage or municipal taxes, damages to neighbouring owners etc. 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.
You must make sure that the property is sold and will be delivered to the buyer, with the benefit of full vacant possession.
