N E W S L E T T E R
Purchasing property in Greece – A practical legal guide (2)
Greece has always been a popular destination for investors who wish to purchase property for personal use or for business purposes (Airbnb or otherwise). Following a period of record-low property values, the market is starting to show signs of a rising trend. Investment projects are being planned, such as the 8 billion euros development of the former Elliniko airport in the Southern suburbs of Athens, the aim being to transform it into a complex of luxury residences and hotels including a yachting marina and a casino.
At the same time recent Greek laws have provided incentives to foreigners for purchasing property in Greece (for example a “Golden Visa” can be obtained for purchasing property of a value of at least 250K euros). Τhe Greek government is also considering offering the Greek citizenship to third-country nationals for a real estate investment worth at least 2 million euros. Additionally, the yearly property tax (ENFIA), payable by property Owners, has been reduced by about 30% whilst a further reduction is being considered for the year 2020.
But whatever the reason for wishing to acquire Greek real estate or the available incentives, a number of steps need to be taken to ensure that the process is completed smoothly whilst avoiding all pitfalls. The recommended steps are outlined below.
Finding the property
This can be done either through estate agents, auctions or property Owners directly.
Appointing a lawyer
Before consideration is given to making any sort of offer or deposit, priority should be given to the appointment of a lawyer! The lawyer will perform an ownership check. This involves attendance at the Land Registry office/ National Cadastre (in the area where the property is located) to check and confirm the ownership status as well as whether the property is free of encumbrances (mortgages, liens etc.). Such encumbrances may not make the transaction impossible, but will delay the process and your lawyer will need to liaise with the seller’s bank. Additionally it is recommended that the appointed lawyer requests confirmation from the seller (physical person or legal entity) as to whether there are any outstanding debts vis-a-vis the authorities (tax authorities or national insurance) as such debts are also likely to delay the process.
Once the titles and status of seller have been checked, it is important that the property be examined by a civil engineer/surveyor, with whom the appointed lawyer will closely liaise. The surveyor will survey the property to ensure that i) in the case of land, in particular outside urban areas, no restrictions apply (e.g. the area is not a forest, archeological site or shoreline/coastal zone area, a building permit can be obtained) and ii) in the case of a building, it has been properly authorised by the state, all relevant permits exist and no restrictions apply (some buildings in particular in the historic center of Athens are characterized as historic buildings or monuments and must be preserved, making their transfer complicated and sometimes impossible) . If the building is unauthorised, it will need to be legalised, a process which is also likely to complicate the whole procedure.
Negotiating the deal
If the property “passes” the above mentioned checks the buyer will negotiate the price or authorise his/her lawyer to do so. Consideration will be given as to whether a deposit is required at this stage, in which case a private agreement will be drawn up by the involved lawyers.
Appointing a Notary (or ask your lawyer to appoint one for you).
The Notary will provide a list of the documentation (required from the seller) which will be attached to the contract. Collecting the correct documents and ensuring that they are in order will avoid complications and delays. It is advisable for the seller also to involve a lawyer at this stage. The buyer needs to obtain a Greek Tax Number and consider with his appointed lawyer how to pay the price (by bank transfer, cheque, whether to open a bank account in Greece etc). Once the Notary and lawyer are satisfied that all the documents are in order, the Notary will draw up the contract and provide a tax declaration form for the transfer tax to be paid. This is in the region of 3% of the “objective”/“tax value” of the property or the agreed price (whichever is the highest).
Signing the contract
Once the buyer has paid the tax, the parties will attend at the Notary’s office to sign the contract. The buyer’s and seller’s lawyers can sign on their behalf, if provided with the appropriate power of attorney. Finally the contract will need to be submitted to the Land Registry/National Cadastre for registration of the change of ownership.
The above procedure may all seem very complicated to a foreign investor. However with the assistance of experienced advisors the aim can be accomplished with very little hassle on the part of the buyer.
Our firm advises on all sorts of property transactions (on behalf of buyer or seller) and assists throughout the whole process. We also assist with the formation of companies (if necessary or suitable) and liaise with experienced notaries, engineers and accountants.
For more information, feel free to contact .
Author: Alexandra Nikolakoglou, partner at L&L Law Firm.