Here’s a detailed breakdown of each step involved in purchasing property in Greece:
Step 1: Research and Planning
1.1 Determine Your Budget
Assess All Costs: Begin by determining the total budget for your property purchase. This should include not just the property price but also additional expenses such as legal fees, notary fees, real estate agent commissions, property transfer tax (3%), and ongoing costs like maintenance, utilities, and property tax (ENFIA).
Financing: If you require a mortgage, research the available options, both in Greece and your home country. Note that Greek banks may require a higher down payment from foreign buyers and might have more stringent lending criteria.
1.2 Research the Market
Market Trends: Study current real estate trends in Greece. Certain areas, like Athens or the islands, may have different price dynamics compared to rural or less touristy regions. Real estate websites, local newspapers, and market reports can be useful resources.
Legal Landscape: Familiarize yourself with Greek property laws. For example, certain types of property may have specific legal requirements, especially historical properties or those in protected areas.
1.3 Choose the Location
Purpose of Purchase: Determine whether the property is for personal use, rental income, or investment. The purpose will significantly influence your choice of location.
Factors to Consider: Think about proximity to amenities like schools, hospitals, and transportation if you plan to live there. If it’s an investment, consider tourist appeal and rental yield potential.
1.4 Understand the Legal Restrictions
Non-EU Citizen Restrictions: Non-EU citizens need to be aware of specific restrictions. For example, properties near border areas, such as some islands or regions in northern Greece, may have restrictions on foreign ownership. You might need special permission from the Ministry of Defense to buy in these areas.
Step 2: Find a Property
2.1 Hire a Real Estate Agent
Selecting an Agent: Choose a licensed real estate agent with a good reputation and experience in the region you are interested in. Agents in Greece are typically familiar with local markets and can provide insights into neighborhoods, price ranges, and legal requirements.
Agent’s Role: A good agent will guide you through the property search, arrange viewings, negotiate the price, and assist with the paperwork.
2.2 Property Inspection
On-Site Visits: Personally visit the properties to assess their condition. Consider factors such as the age of the building, any visible structural issues, the quality of construction, and the state of the surrounding area.
Condition Assessment: Look beyond aesthetics and consider practical aspects like water pressure, electrical systems, heating/cooling, and potential renovation needs.
2.3 Verify Property Details
Legal Verification: Ensure that the property is free from legal disputes, unpaid taxes, or encumbrances. Your lawyer should conduct a thorough title search to confirm that the seller has clear ownership and the right to sell the property.
Check Building Permits: Verify that the property complies with all building regulations and that any renovations or additions were made with the necessary permits.
Step 3: Engage Professionals
3.1 Hire a Lawyer
Role of the Lawyer: In Greece, it is crucial to have an independent lawyer to protect your interests. The lawyer will handle the legal due diligence, review contracts, and ensure that all documents are in order.
Fees: Legal fees typically range from 1% to 2% of the purchase price, depending on the complexity of the transaction.
3.2 Notary Public
Notary’s Role: The notary public is a state-appointed official who ensures the transaction is legally binding and properly registered. They prepare the final contract and ensure that it adheres to Greek law.
Notary Fees: The notary fee usually amounts to about 1% to 1.5% of the property’s declared value.
3.3 Surveyor/Engineer
Technical Inspection: Hire a qualified surveyor or civil engineer to inspect the property’s physical condition and to confirm that it complies with all relevant building codes. This step is crucial, especially for older properties or those that have undergone renovation.
Surveyor’s Report: The surveyor provides a report outlining the property’s condition and identifying any issues that could affect its value or require costly repairs.
Step 4: Financial Preparations
4.1 Get a Greek Tax Number (AFM)
AFM Application: The AFM (Arithmos Forologikou Mitroou) is a Greek Tax Identification Number required for any financial transactions, including property purchases. You can obtain it at the local tax office with your passport and a completed application form.
Use of AFM: The AFM is necessary for opening a bank account, paying taxes, and registering the property in your name.
4.2 Open a Greek Bank Account
Bank Account Requirements: A Greek bank account is essential for managing payments related to the property purchase, such as taxes and utility bills. To open an account, you will need your AFM, passport, proof of address, and sometimes proof of income.
Currency Exchange: If you are transferring funds from abroad, consider exchange rate fluctuations and associated costs.
4.3
Check Financing Options
Mortgage Availability: Greek banks do offer mortgages to foreigners, though terms may differ from those available to Greek citizens. Be prepared for potentially higher interest rates and down payment requirements.
Loan Approval Process: The process can be lengthy, requiring detailed financial information and proof of income.
5.1 Preliminary Agreement (Pre-Contract)
Pre-Contract Details: The preliminary agreement outlines the basic terms of the sale, including the agreed price, deposit amount (usually 10%), and timeframe for completing the purchase. It’s often used to reserve the property while due diligence is completed.
Deposit: The deposit is usually non-refundable if you decide not to proceed, but refundable if the seller withdraws or legal issues are found.
5.2 Legal Checks
Title Search: Your lawyer will verify that the seller is the rightful owner, that there are no liens or debts attached to the property, and that all necessary permits are in place.
Tax Clearance: Ensure that the property is free from any unpaid property taxes or municipal charges. The seller must provide tax clearance certificates as part of the process.
5.3 Tax Clearance
Seller’s Tax Status: It’s essential to verify that the seller has paid all necessary taxes, as any outstanding tax liabilities could be transferred to you after the purchase.
Certificate of Tax Compliance: Your lawyer will request this from the seller to confirm that the property is clear of tax debts.
Step 6: Finalizing the Purchase
6.1 Sign the Final Contract
Contract Signing: The final purchase contract is signed in the presence of the notary public. The contract must be in Greek, so make sure your lawyer explains all the terms clearly.
Power of Attorney: If you cannot be present in Greece, you can authorize your lawyer or another representative to sign on your behalf using a power of attorney.
6.2 Pay the Purchase Price
Payment Process: The final payment is usually made by bank transfer. Ensure that the funds are ready and the transfer process is understood well in advance of the signing.
Proof of Payment: The notary will need proof of payment to proceed with the registration of the property in your name.
6.3 Transfer of Ownership
Land Registry/Cadastre Registration: The notary will register the property with the local Land Registry or Cadastre. This step legally transfers ownership to you and ensures that the transaction is officially recorded.
Registration Fees: These fees vary depending on the location and value of the property and are usually around 0.5% to 0.7% of the property’s value.
7.1 Pay Property Transfer Tax
Tax Payment: The buyer is responsible for paying the property transfer tax, which is typically 3% of the property’s objective value. This tax must be paid before the final contract is signed.
Filing with the Tax Office: Your lawyer will handle the filing and payment of this tax to the tax office.
7.2 Register with the Tax Office
Property Registration: Once the sale is complete, you must register the property with the local tax office to ensure it is included in your annual property tax assessments.
Filing Requirements: You will need to provide the final contract, proof of tax payment, and possibly other documents as required by the local tax office.
7.3 Utilities and Local Taxes
Utility Transfers: Arrange to have the utility accounts (electricity, water, etc.) transferred into your name. This may require a visit to the utility company offices or can sometimes be done online.
Municipal Taxes: Some local taxes, like garbage collection fees, are paid through utility bills. Ensure these are properly set up in your name.
8.1 Annual Property Tax (ENFIA)
ENFIA Calculation: The annual property tax (ENFIA) is based on the property’s objective value, location, and size. You will receive a tax notice each year, and it must be paid even if the property is not in use.
Payment Schedule: ENFIA can typically be paid in installments throughout the year. Ensure you keep up with payments to avoid penalties.
8.2 Maintenance and Insurance
Property Maintenance: Regular maintenance is crucial, especially for older properties. This includes structural repairs, gardening, and routine checks on systems like plumbing and electricity.
Insurance: Consider purchasing property insurance to cover potential risks like fire, theft, or natural disasters. Insurance is not mandatory but highly recommended.
8.3 Legal Compliance
Local Regulations: Be aware of local regulations regarding property use, renovations, and rental activities. For example, if you plan to rent the property, you may need a rental license and be subject to specific tax obligations.
Property Improvements: Any significant improvements or renovations may require a building permit. Ensure you comply with local building codes to avoid fines or legal issues.
Conclusion
Purchasing property in Greece is a complex process that involves several legal, financial, and practical steps. By carefully planning and engaging the right professionals, you can navigate the process smoothly and successfully. Whether you’re buying a holiday home, a rental property, or planning to relocate, understanding each step in detail will help you make informed decisions and protect your investment in this beautiful country.
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