Introduction
When it comes to investing, real estate investments in comparison to others, such as shares and stocks have proven to run fewer risks and are by far more effective over a period of time despite the fact that stock and shares yield more and quicker returns. Now, following a long period of recession, the realty market is on the rise, making property investment most lucrative especially in Greece. In addition, foreign investors through an affordable real estate investment can also secure Permanent Residency in the country.
Since 1981, Greece has been a member of the European Union, therefore both national and European legislation apply. The transaction is a transparent, controlled public procedure. Of course some paperwork is essential but it can be accomplished easily with the assistance of an appointed lawyer. The procedure for property acquisition is far simpler than what was some years ago. It is completed in three main parts. In the case of a foreign buyer (investor) the following steps must be taken:
Property
ACQUISITION
#1. Obtain all legal documents required for property purchase in Greece
Unlike what was true till now, property purchase has become quite simple and it only requires approximately ten (10) working days. The documents needed are also fewer and easier to get. It gets even easier if the investor appoints a lawyer to represent him throughout the transaction. It is obligatory that foreign buyers have an accredited translator when the final contract is to be signed.
- A Power of Attorney must be drawn. A Greek notary will carry this out, always in the presence of an official translator (mandatory). The lawyer, whose name is stated in the document, is to act on behalf of the buyer. The document must clearly state the powers granted to the lawyer for the drawing and execution of the specific Principal Property Purchase Agreement. This frees the buyer from all the hassle of the long, complicated formalities and actions.
- The lawyer as authorized will act on behalf of the buyer and register the buyer as a taxpayer in Greece. A bank account is issued in a state bank, in the buyers name of course.
- The lawyer’s duty is then to check the history of the property at the state Property Registry. This includes previous or existing mortgages, encumbrances, contracts and agreements regarding the property.
- Once the checking has been thoroughly completed, the lawyer draws a report with all the relevant information he collected.
- The lawyer delivers the report to the buyer, signed and certified.
- A Title Transition Tax statement is prepared and submitted to the local tax authority by the lawyer. If the property is dated prior to 2006, based on the Property Construction Permission, the tax amounts to 3.09% but if the permission was issued after this date then the amount due is 24%. Tax payment of 24% is suspended until 31/12/2022.
- The Principal Property State Agreement is signed by both parties (the Buyer and Seller) in the presence of a notary and the translator.
- Following the signing of the agreement, the lawyer registers it in the State Property Registry. That is the final, integral and compulsory stage of the property purchase transaction.
#2. Due Diligence
Upon completion the Buyer receives all the above mentioned documents which are duly notarized and translated into the buyer’s native language including
- Construction Permission
- Power Consumption Certificate
- Property layout plan
- Topographical plan
It is important to consider the amount of expenses that will incur for such a transaction. That is the Transfer of Title and Deed fee and additional expenses. All of which must be paid promptly either before or after the completion of each step involved in the transaction.
The extra expenses and fees include:
- Lawyer’s fee: 1,5% of the property value plus 24% VAT which is added up to this amount
- A Notary’s fee: 1,5% of the property value plus 24% VAT
- Title transition tax: 3.09% on property value
- Mortgage registry fee: 0.5% on property value
- Estate agent’s fee: 2% on property value plus 24% VAT
The fees calculated are based on property price and may vary in accordance with the price.
However, as mentioned above if the Property Construction Permission of the real estate was issued after 2006 then the amount due for the Title Transition tax amounts to 24% of property value. But the tax payment of this 24% is suspended until 31/12/2022.
The Lawyer’s and Notary’s fee remain the same as above, 1.5% each plus 24% VAT.
The Title transition tax fee is 24% of property value, and the Mortgage registry fee is also 0.5%.
The estate agent’s fee remains the same as above, that is 2% plus 24% VAT on property value. Again one must remember that the fees calculated are based on property price and may vary in accordance with the price.
*All the above fees are subject to change by law.
#3. The signing of the Final Contract
The appointed Greek lawyer completes the procedure of signing the Final Contract in a Notary Office and transfer of Title Deed to Buyer(s) name(s). The Contract amount in full, including all legal fees and Title Deed transfer fee as designated above, comprise the final step of the procedure. It is important to note that the Settlement of the Final Contract and Issuance of Title Deed all can take place on the same day.
As we have seen above, buying a property requires a lot of paperwork, a topnotch budget and a transparent picture of all the pertinent expenses. So, before proceeding with a deposit, make sure you are fully informed of the expenses you are required to pay and never hesitate to consult your lawyer or realty advisor if you render necessary.
What one has to bear in mind is that as soon as a foreign buyer purchases a Property of a minimum value of 250,000.00€, either residential or commercial, the buyer is entitled to get a Greek Residence Permit and the thereto related Schengen Visa provided to non-EU Nationals. This is another incentive for property investment in Greece.
Discover the most significant benefits of Greece Golden Visa Residency
Conclusion
Therefore, one can see that investing in Greece is a worthwhile opportunity. One should not miss out on the ideal timing of the Greek economy recovering from a recession as well as the Golden Visa scheme.
A professional property consultant can assist you by dealing with this particular part of the process on your behalf allowing you to dedicate your precious time to your own business schedule. If you are interested in further details, do not hesitate to contact us or you can book a complimentary free consultancy session at your convenience.
Great article, Odysseas!