Purchasing Real Estate in Greece
The process of purchasing property in Greece can be fairly simple if you carefully follow the requirements of Greek law, and provide all the necessary documents. The registration process of a standard real estate transaction takes 2-6 weeks, depending on the level of preparedness of the seller’s documents. Naturally, getting assistance from real estate professionals who is well versed in the laws and procedures could make the process easy and highly successful.
1. General requirements of Greek law
Before carrying out any real estate transaction, all the general requirements of Greek law must be met:
A. A contract for the purchase/sale of real estate property in Greece must be prepared and signed by a notary. The contract shall be written in Greek and verbally translated (verbatim) during the signing.
B. Before the transaction is completed the buyer must get a registration number from the local Taxation Authority, pay taxes for the transfer of the property, and present the payment confirmation to the notary.
C. Once the transaction is completed, the parties must present all the required documents to the notary, and sign the contract in his/her presence. The contract may be signed before the notary by the parties or their representatives.
D. The process is completed once the new status of the real estate property is registered at the State Registrar for guaranteed real estate loans, or with the State Lands Registrar.
2. General inspection of the property by a lawyer
One vital step in the purchase of property in Greece is the general inspection of the property by a lawyer, examining several important parameters:
• Checking the property’s legal status at the Land and Guarantees Registrar – Make sure the property indeed belongs to the seller and faces no legal claims and/or loans, and that all necessary permits for it exist. This inquiry must be perfect and very strict, because usually these records are disorganized and exist only on paper, not digitally. If you find no problem with the property owner or the property itself in the last 20 years – you may continue advancing the transaction.
• Checking with the Nature Reserves Authority – Make sure no specific construction restrictions apply to the real estate property due to archaeological excavations or any other issue that might prevent construction on the site.
• Checking with the Taxation Authority – Check if the property owner faces any risks of foreclosure or has any problems with respect to taxation.
3. Registration with the Taxation Authority
Foreign residents who wish to purchase property in Greece must be identified by Greek economic entities, and get a personal registration number (AFM) from the Greek Taxation Authority in order to begin the process.
4. Paying taxes
The main taxation that applies to the purchaser is the real estate transfer tax, currently set at 3%.
5. Opening a bank account in Greece
6. Preparing the contract
The seller of the property must present the following documents:
– Confirmation that they have no financial debts
– A statement on the lack of income from the sold asset in the past two years
– Confirmation that the property is included in the seller’s tax report
– Confirmation of payment of property tax
– Confirmation of payment of applicable taxes if the seller inherited the property or got it as a gift.
– Confirmation that they have no liabilities for maintenance, operation, or any other paid service provided by the authorities for the property or its perimeter.
– Approval for any design, construction, or other type of work done in the property.
– Zoning/Land Registration confirmation regarding the status of the property.
The buyer must present the following documents:
– Confirmation that they have no financial debts/delayed tax payments
– Confirmation of the real estate transfer tax payment, carried out in advance
7. Notary’s role in the process
As described above, contracts for the purchase of property in Greece are written in a certain way and require notary approval. Contracts signed contrary to the said requirements are worthless and may not be used for claiming compensation.
The notary is usually recommended by the seller. The duties and responsibilities of public notaries in Greece are quite limited, namely the requirement to inform the parties on their rights and obligations as part of the deal, and make sure they clearly understand everything they are told. This is generally achieved by reading out the content of the contract before the signing in a language understood by all parties.
Notarization expenses for a standard transaction depend on the value of the specific property in the purchase-sale contract, as well as the volume of work required for preparing the documents. Nowadays the cost of notary services is 0.5% of the total cost plus VAT. However, 9% of the notary fees are deducted and go to a Lawyers Fund, and another 6% go to the Notaries Benefits Fund.
8. Closing of the transaction
The parties may close the deal by signing the contract in Greece or at a Greek consulate, in person or through representatives. By delegating the appropriate power of attorney, each party may transfer its powers to its representatives, including the lawyer representing its interests in Greece.
The power of attorney must comply with European rules. It is required to state not only the exact name of the subject, the property, and the representative in the transaction, but also all the important terms and conditions of the future deal. Greek notaries may reject a power of attorney or require additional documentation before approving it, if they believe a certain section is missing or poorly written. A power of attorney approved by a foreign notary shall be recognized in Greece as long as it contains an approval from the Greek consulate in that country or an apostille translated into Greek by a certified translator.
9. Registration of ownership under the Torrens title
The Torrens title is a method of transferring rights. The transfer of real estate property rights requires official registration at the Register of properties or Pledge registry. If the contract states the parties’ rights and obligations, then the registry sets the proper transfer of these rights and obligations. Registration fees are 0.575% of the value specified in the contract, and apply to the buyer.
If the area on which the property is located has already been transferred from the pledged loans system to the Register of properties, then the current owner must declare ownership of the real estate property within a certain in order to register it in the new Land Registration. The cost for submitting this statement is 35 Euros for each ownership right specified in the registration document. The declaration and registration of ownership of the real estate property in the new land registration system guarantee the completion of the transaction, and are necessary steps for obtaining permits for designs, plans, construction, and more.