Properties in Zakynthos
.

Important Information for Property Purchase in Greece

Property ownership in Greece is open to every individual or legal entities either with Greek or other nationality. However, the information given below is essential for every potential buyer. For detailed information, please follow the links below:

 

1. Essential Documentation

2. Essential Legal and Technichal Advice

3. Purchase Agreement

4. Costs

5. Tips for Extra Attention

 

1. Essential Documentation

There is a certain process for buying a property in Greece. The potential buyer must have:

A valid Greek Tax Registration Number, which can be issued by the local government's taxation department.

Evidence of their -lawful- possession of funds to cover the purchase prices together with all purchase-related expenses. Individual buyers must provide tax returns of the last five years preceding the purchase; revenue from such tax returns must add-up to the total of the purchase price and the purchase-related costs. Legal entities should equally demonstrate their ability to cover the said expenditure, by means depicted in their books; alternatively, foreign individuals or legal entities should prove that sufficient funds were imported in order to cover the same expenses, as evidenced by means of Exchange Import Declarations (pink slips) showing that the amount spent has been wired to their bank account in Greece. -Back Top-

 

2. Essential Legal and Technichal Advice

Once the potential property has been identified, the buyer needs to assign the following audits to an Attorney and a Civil Engineer before reaching a final decision:

A valid Greek Tax Registration Number, which can be issued by the local government's taxation department.

Title audit (Attorney: An attorney should be assigned for the examination of the title of the property to be purchased. This examination takes place in the local Land Registry, where such titles are kept, and must cover a time span of at least twenty years; ideally, it should result in a written confirmation that no mortgages or other liens or claims by any third party burden the real estate under consideration.

Adequacy of use audit (Civil Engineer): An engineer must be assigned to examine the adequacy of the property under consideration for its intended use (residential, commercial, professional etc. purposes).

If the potential property is a plot, a point of particular concern should be whether it lies within a forest (if located outside the city limits); apart from that, an examination of relevant legislation should confirm its adequacy to be used (built) as intended (permitted "land uses"). Other points of examination usually relate to its actual location and size (in comparison to what is described in its title), or to whether any state authority has an expressed interest in it (expropriation).

If the property is a building (house, apartment, office or other), the engineer should particularly inquire whether the construction undertaken indeed corresponds to the relevant building permit and any other construction-related legislation (lawfulness of the building). Other points of interest relate to the observance and accuracy of the architectural plans, the building's anti-seismic protection, the payment of all construction employees' social security contributions, etc. -Back Top-

 

3. Purchase Agreement

All the property purchase agreements in Greece are, by law, drawn up in the form of notarial deeds (Notary Public). Each contracting party should be represented by an attorney throughout the signature process. Such signature process may be broadly described as follows:

Taxation: For each real estate purchase in Greece the relevant transfer tax must be prepaid. To this end, the buyer submits to the local (where the real estate lies) tax office a declaration for the "transfer of real estate" and a spreadsheet for the estimation of the transfer value (both prepared by the notary public). The relevant amount is normally paid by means of a bank check issued in the name of the above tax office.

Local Bar Association: If the price of the real estate exceeds 29.350 Euros, buyers must pay to the local Bar Association an amount against their attorney's fees. Such amount is a percentage (grossly 0,5%) of the purchase price, as shown in the purchase contract. At the same time, a draft of the contract, as prepared by the notary public pursuant to the attorneys' directions and signed by both attorneys, is submitted to the same Bar Association, in order for it to validate the attorneys' signatures appearing on its body - a fee of some 10 Euros is also due for such validation. -Back Top-

Purchase Contract: Once the above process is completed, all contracting parties and their respective attorneys, assemble to the notary public's office, where the real estate purchase contract already drafted is read out loud by the notary public and signed (by all present). Contracting parties must be able to evidence their identity (ID card or Passport); they may also be represented by third parties, bearing a lawfully drafted (also in the form of a notarial deed) power of attorney. If the buyer is a legal entity, the notary public must be provided with all its "legalizing" documents (Articles of Association, Minutes of the Board of Directors etc.), as well as, a special power of attorney authorizing the person who will sign the purchase contract on the legal entity's behalf. A typical real estate purchase contract generally includes the personal information of the buyer and the seller, the description of the real estate to be sold, its ownership title (going back at least twenty years), the purchase price and the way it is paid (in cash, check, loan etc.).

Registration of Purchase greement: Only after the real estate purchase agreement has been registered with the proper Land Registry is the buyer deemed as the legitimate owner of the real estate. To this end, a ratified copy and summary of the signed contract, together with a copy of the transfer tax declaration and payment receipt, as well as a relevant petition for registration, all prepared by the notary public, are submitted to the local Land Registry. This is normally done either by the notary public or by the buyer's attorney; however, the buyers may undertake this action themselves. At the same time the buyer requests the Land Registrar to issue a series of certificates (ownership, registration, liens and claims), which should demonstrate (and confirm) the new ownership and legal status of the purchased real estate.

Other actions: The buyer, once the transfer of ownership is completed, as above, should also submit a photocopy of the purchase agreement to the local municipality, in order for a relevant entry to be created in its books (and for the relevant local taxes to be imposed on the proper new owner). Depending also upon whether the region where the purchased real estate lies (to be confirmed by either the buyer's attorney or the notary public), the new owner might have to submit a photocopy of the purchase agreement to the local office of the National Public Register ("Ktimatologio"). -Back Top-

 

4. Costs

An important point of clarification, that directly affects the real estate purchase expenses, refers to the "objective" value of real estate. The Greek tax authorities, in an attempt to control tax evasion, have setup a system that determines in abstract the "objective" value of real estate. This value is considered the real estate's "deemed minimum" value - the contracting parties shall be taxed on that amount, even if the actual transfer price is set below such "objective" value. In market terms, however, the tax office's objective value of real estate is generally well below its market price.

In certain areas, where the "objective value" system is not implemented, the local tax office takes into consideration comparative data, particularly the price per square meter of a recent transfer of similar real estate within the same region, in order to determine the value of the real estate - the buyer must pay the tax derived in this way, but has the right to claim a reduction at a later stage.

In view of the above, and unless a substantial change (such as changes in "objective values" or the application of VAT - both already under way) takes place, expenses for the real estate transaction (tax, lawyers' and notary public's fees, registration fees) should be estimated at around 12 - 15% of the purchase price. However, it should be noted that a substantial tax deduction is provided by law in favour of all individuals purchasing their first main residence.

-Back Top-

 

5. Tips for Extra Attention

Although potential buyers should undertake all actions aimed at purchasing a real estate in cooperation with their attorney, as well as acquire written certifications where possible, paying attention to the following points might prove useful while in the purchasing process.

No Private Documents: By law, all real estate-related contracting in Greece must be done by means of notarial deeds. In this context, any private documents entered between the seller or the buyer (concerning the sale itself, prepayments, the purchase price, or preliminary agreements) do not secure the interested party with regard to the real estate under consideration.

Preliminary Agreement: In case any of the contracting parties (buyer or seller) is in a hurry to secure its position in relation to the intended transaction, but however not all processes are complete for the actual purchase transaction to take place, a notarial preliminary agreement may be entered into, in order to bind the parties towards signing the final purchase agreement if all conditions are satisfactorily resolved. In such a notarial preliminary agreement the parties agree on the basic terms of the purchase and undertake to sign the final purchase agreement at a later time, either specified, or upon the occurrence of a certain condition; the seller may additionally grant the buyer the right to pay the agreed amount and acquire the real estate, even if the seller does not concur and sign the purchase contract, by himself (self-contracting), when the specified time arrives or the set condition is fulfilled.

Special Borderline Legislation: In Greece a special legislative framework applies to real estate lying along its borderline; foreign individuals and entities should usually acquire a special permit from the relevant state authorities, with regard to land acquisition along the said areas. Detailed information should be requested by the interested party's attorney to this end.

National Public Register of Lands ("Ktimatologio"): In Greece a process of registering all real estate in the country in the -partially in operation- National Public Register of Lands ("Ktimatologio") is well under way. Any party interested in acquiring real estate should inquire whether the region under consideration has indeed been registered with the National Public Register of Lands, in order to undergo the relevant administrative process with regard to the real estate transfer in its name. -Back Top-