The text below describes the usual procedure for
buying properties in Greece
I. LEGAL PROCEDURE
EC legislation allows citizens coming from EC members - states to
buy and own properties in another EC state. Therefore, the rules
and the procedure applied for property purchase is the same for all
European citizens. Since Greece became a member of EC in 1981, British,
French, Spanish, Dutch, German etc citizens can buy any kind of properties
in the Greek territory. Specific areas of Greece are considered to
be military and there should be issued permission before the contract
is signed (applied also for Greek citizens). Non European Union citizens
who wish to purchase property should apply to the Ministry of External
Affairs in order to get prior authorisation otherwise their contract
will be void and not legal.
Deposit
To secure a chosen property: a 10% deposit on the purchase price
is usually required on signing a pre-contract agreement. This agreement
contains the names and description of the parties, the description
of the property, the vendor's title, the price, the methods of payment
and any general conditions negotiated by the parties. Sometimes in
the case of a very cheap property this agreement does not take place
and the parties move straight to the contract signature before a
Notary Public with the two lawyers representing the parties. The
purchaser should always be aware that no deposit or any other amount
should be paid before the legal search of the property is carried
out by a qualified lawyer appointed by the purchaser and acting in
his /her interests. In case that any of the contractors backs out
of the contract, the other contractor can sue for his or her damage
suffered.
Purchase
All the documents regarding the purchase of a property should be
carried out before a Public notary, otherwise they are void and not
binding, e.g. the power of attorney for property purchase. Therefore,
the property purchase contract is always executed before a Notary
and in the presence of lawyers representing the seller and the purchaser.
A purchaser needs a lawyer to act on his/her behalf in order first
to check the vendor's title and his ownership (legal search) and
then to assist with the Local Regulations, to fix the "assessed
value" (with the notary's assistance) and ensure that he/she
will obtain a legal property title. The legal search of the property
includes the search of the vendor's ownership as well as the search
of third peoples' rights on the property (eg mortgage, right of way
etc), and it is always carried out at the local Land Registry of
the area of the property. Legal procedures in Greece are not complicated
and when the documentation is complete the contract can be signed
quite quickly. The purchaser has to be provided with a tax number
which is unique for any person (and can be used for any other action
in Greece e.g. vehicle purchase) and he/she has to pay the conveyance
tax before the contract is signed. In case of the contract cancellation,
the tax is refundable. The notary can not allow the contract signature
if all the documentation is not complete, the tax is not paid and
the deeds are not in order. Finally, the contract has to be registered
in the local Land Registry otherwise the vendor is still considered
to be the owner of the property and can even convey the property
to another purchaser.
Expenses
The Purchase tax, Notary and legal fees (except
those of the vendor's lawyer), as well as land registration fees
are always paid by the purchaser (if the opposite is not agreed)
and they are calculated on the "officially estimated price" or "tax
price" of the property, which is usually lower than the true purchase
price. The purchase tax differs for civil and agricultural properties.
Civil are considered the properties situated in cities or in areas
where there is a fire station while agricultural properties are
those situated in areas out of the city borders or in areas without
a fire station.
Tax for civil properties is a) 9% for the first
15.000 euros and b) 11% for the rest of the amount. Then 3% of
this total tax is added as municipal tax.
Tax for agricultural properties is a) 7% for
the first 15.000 euros and b) 9% for the rest of the amount. Then
3% of this total tax is added as municipal tax.
The Notary's fee is approximately 2%,while the
land registration fees are 4,75/1000 plus an extra amount of around
20 euros for each contractor. Also, the notary will request you
to pay the Law Society fees which are calculated at the percentage
of 1% for the first 45.000 euros of the price and at the percentage
of 0,5% over this amount. The lawyer has to do the required legal
search, the fees of which is 400€ for the lawyers we suggest
for your representation. This amount includes the legal fees for
the full explanation of the procedure to be followed as well as
for the tax number issuance. At the first appointment with the
lawyer, it is useful to sign a power of attorney before a notary
so that the lawyer will represent you for all the preparatory work
of the contract and even at the contract signature. For the power
of attorney you have to pay the notary an amount of 65 euros. For
the contract signature, you need to have a new topographical plan
made, prices range from 210€ to 425€ depending on the
size and location of the property. The topographical plan is attached
to the contract, signed by the contractors and it actually describes
the property under conveyance .For the contractual work, representation
before competent authorities, tax payment, price to be paid to
the vendor, full cost payment, contract signature, the lawyers
we recommend will charge you for legal fees the amount of 600€.
However, this will save you considerable airfare and hotel bill
expenses for return visits to Crete.
II. LOCAL TAXES
Owners of properties are subject to a very small Public Tax which
is incorporated in the electricity bill payable every second month.
III. PROPERTY TAXES
Owners of real estate property whose "assessed value" or "objective
value" exceeds the amount of 175.000 Euro or 350.000 Euro for
a couple are subject to property taxes. As an example for real estate
property whose "objective value" is estimated at 322.800
Euro and only having one owner, the yearly tax would be about 440
Euro.
IV. PLANNING PERMISSION
According to the Greek laws, if a plot of land is not within the
town plan and if there are no forest or archaeology restrictions,
permission to build can be granted for any plot of minimum of 4,000m2.
Permission can be granted for plots of land of 2,000m2 or less, if
they are located within the planning zone or with frontage to principal
municipal road. Inside villages, towns and cities planning permission
can be generally granted for any plot. For some Greek areas there
are specific Greek laws that apply about planning permission regulations.
Most reputable agents can recommend skilled architects, and engineers
who will give advice, work on plans and carry out the procedure for
building permission. Building permits can be obtained through registered
architects or engineers in Greece and cost approximately 4% -5% of
the total cost of the building.
V. BUILDING COSTS
As a very general guide building costs per m2 are in the region
of 1.000 to 1.500 Euro depending upon the materials used, in certain
locations (difficult access etc.,) the building cost might reach
1.600 Euro.
VI. PURCHASING FOR NON EU CITIZENS
Whilst EU citizens can freely buy properties in Crete, there are
certain restrictions for those people outside of the European Union.
However it is possible for non EU citizens to purchase in Crete.
It will in general take longer time. It is necessary for your lawyer
and notary public to apply to the Minister with all the documentation
regarding yourself (curriculum vitae, six ratified photocopies of
passport, certificate of birth and criminal record) and the documentation
of the property (recent topographic diagram) and they will investigate
your position in the community and ensure that you do not have a
history of any kind which might be detrimental to the security of
the island, this is because Crete is considered to be a border territory.
Should you be prepared to go through this process then please fell
free to ask for our up to date property lists.
VII. BUILDING FROM SCRATCH DOS AND DON'TS
When buying a plot and building from scratch! These are tips, and
are not meant to put you off buying a plot and building the house
of your dreams - but they might help prevent your dreams becoming
nightmares! Please make sure that you have a proper contract for
building work with the builder and/or architect in Crete in the same
way that you would have in the UK if you were getting new building
work or renovation done, for your own protection.
Architect and Contracts
Do make sure you are completely compatible with the architect you
choose. Architects in Greece hold much more power than those in the
UK it is not really possible to fire them. Once they have obtained
your building permit they are responsible for signing to say the
building's footings are correctly installed and for signing off the
job so that you can have your services connected and your building
is legal. Spend the time and money to take photographs of the land
and get some sketch plans of your ideas drawn up here in the UK -
this way you will be able to shop around for an architect in Crete
who agrees with your ideas (in so far as they are legal within the
building laws) without making the complicated decision of choosing
an architect before he does your sketch plans. Make sure you speak
the same language - and I don't mean Greek! For example if a sum
of money has been put in the contract for tiles and you go to choose
tiles with your architect and see some lovely expensive ones and
you ask "can I have those?" and the reply is "yes,
of course" this means that you can have them, but if they are
for example �per square metre more than those quoted for in
the contract then you will have to pay the extra .Check that IKA,
VAT and the cost of the building permit etc., is included in your
contract or not - if one quotation seems vastly more expensive than
another it could be that the IKA, Vat and building permit price is
included and the lower quotation does not include them. In general
these costs are outside the contract Do have a clause in your architectural
contract that you may choose the builder of your house independently
of the architect if you so desire. Unlike the UK where an architect
cannot also be a builder, in many cases in Greece the architect and
the builder are one and this creates a conflict of interest. Bear
in mind that a plot of land within the village limits or one with
an old building on it (unless it is protected) poses less problems
and expense than a plot outside the village/town limits.
Services
Do make sure that if you are buying a plot outside the village limits
you know what your costs will be for services. You might see an electric
pole nearby and be told the price of the one you need to your houses
is only X Euro however you could be the unlucky one that is just
out of range and a transformer might be needed - a transformer costs
many thousands of Euro and the cost of it is not shared between
you and anyone else who might build near to you later - they are
the lucky ones and you could be the unlucky ones. For detached houses
standing in their own plots outside the village or town limit now
the electric metre has to be placed in a concrete structure on the
edge of your land. This has to be built by a registered electrician
and will be an additional cost to the connection and or electricity
pole charge.
Water
If there is no mains water nearby your land you might have to allow
for a very large water tank to be built because water delivery is
a set amount of gallons and it is more economic to have a tank which
takes the entire load. If you have bought land which is rocky this
could be an expensive item which almost certainly will be additional
the quotation of the building.
Sewerage: If the land is rocky building a seep away tank could be
costly because of the drilling involved, this is something you can
get some kind of quotation on before you start.
Don't be put off buying the land of your dreams if the location
is perfect, the price is right and your budget is just a little bit
elastic, but if you budget is strictly limited do think twice since
all sorts of things can arise with new build which are unforeseen
Don't buy land with access problems unless you are prepared to
pay for the problem.
Don't buy land on a steep slope to the road unless you realise
it will cost more to build, unforeseen shoring up, mid slide etc
Copied with permission from Crete
Property Consultants |
