How to buy property in Crete - the best ways to go about it

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.

And finally

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 (check updates on their site)

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