Buying a property in Greece: Greece has become a favorable investment destination over the years, mainly due to its natural beauty, mild climate, and geographical location, but also due to a significant drop in prices after the financial crisis.
The world is now looking at Greece as the new hot investment destination and is moving to benefit from the plenty of quality real estate available at affordable prices. Many buy as end-users and let others go.
Greece is a member of the eurozone enjoying all the benefits it derives from common currency sharing without the risk of devaluation or inflationary volatility.
Laws about the purchase and ownership of real estate are granted by the Hellenic Constitution and the Civil Code. Most of the properties in Greece are freehold.
- Legal framework
- Real estate capture
- Real estate buyers in Greece may have different rights.
- Wholly owned (wholly or jointly)
- Bare ownership (full or joint)
- Usufruct (complete or combined)
The buyer must ensure that the seller has rights in each transaction, to ensure that the value of the real estate is reflected in the rights that come with the sale.
Acquisition of real estate in Greece
There are various ways to obtain real estate in Greece. For investors, these mainly concern the following two:
- Acquisition by contract: The buyer and seller come in front of a notary public and sign a sign that is later registered in the local cadastre or land registry.
- Acquisition of property through public auction: The Greek state has been an electronic auction. Greek and foreigners can pay online. The process is open to the public and the proposed property is readily available through the weekly magazine.
Basic Procedures Accepted in GREECE:
- After the selection of the property, the buyer appoints a lawyer to make all the necessary legal searches. The title search takes place on the Land Registry and ensures that the property in question belongs to the seller and is clear of any encroachment. The lawyer also examines the suitability of the property and if it is located in an area where prohibitions or restrictions apply.
- Issue of a tax number. The Greek state requires that each transacting party (natural person or legal entity) have its unique tax number before acquiring immovable property.
- Technical survey of the property. This is not a mandatory stage but is highly recommended as a plan and maybe structural issues invalidating a sale or loss investment.
- Payment of stamp duty (transfer tax). Currently 3% of the transaction value.
- Completion of the first acquisition contract from Notary Public. The buyer receives the title deed, which is the first step in the ownership of the property.
- The registration of title deeds is done in the local land registry and is a complete proof of ownership.
- Registration of property online with the tax authorities.
Taxation
- Ownership of real estate in Greece is subject to an annual tax (ENFIA), which is calculated based on the value of each property and the total value of the assets in their portfolio.The annual tax is currently payable in 5 installments and applies to all types of immovable property – including matters of rights over properties. Such a tax applies to both natural persons and legal entities, whether they are residents and/or have their registered seats in Greece.
- Property-based income is subject to taxation. Natural persons benefiting from rental income are taxed at various rates (thresholds are produced based on the amount of revenue).Owners of real estate are taxed separately on legal entities because rental income is treated as revenue and subject to a 29% corporate tax.
Important parameters for consent before acceptance
Like every country, Greece also has some restrictions on investors buying real estate:
- Acquisition in forest areas: Under the Hellenic constitution, land use cannot be changed in areas considered as a forest.
- Acquisition of immovable property in areas near the border: There are specific prerequisites for acquisition in areas close to the border. In these areas, foreign investors can obtain immovable property by obtaining special permission by joint ministerial approval.The publicly available list identifies such areas. Strict restrictions apply and investors should do extensive research into such plots before purchase.
- Acquisition outside urban zoning: Special attention should be paid to plots outside urban or residential areas as they often have limitations regarding the development potential that they offer and in most cases, plots in small segments. Cannot be divided.
- Acquisition on the coast: Development of real estate that is located close to the coast can be prohibited or permitted under very specific conditions set by the state.
- Acquisition in areas where antiquities are located: Development in areas located in historic monuments may be restricted or permitted under very specific circumstances. In most cases, special permission is required by the competent Directorate of the Ministry of Culture.
- Acquisition in areas of outstanding natural beauty or under a special environmental protection regime. In such areas, both the acquisition and development of real estate may be prohibited by the Ministry of Environment.
Buying a property in Greece
Investing in rent in Greece is a very interesting option, especially if you choose to invest in tourist areas such as Cyclades, Crete, Rhodes, or Porto Heli. Returns on rental investment in Greece typically range between 4% and 6%.
However, if you receive income in Greece and particular real estate revenue, you will have to pay personal non-resident income tax. Property income ranges between 15% to € 12,000, € 12,000 and € 35,000 to 35%, and monthly incomes range from 45% to above 35,000.
Income from holiday rentals is not subject to tax if the rental period is not less than 90 days per year and 60 days on the islands, which have less than 10,000 inhabitants. Longer rent is possible, but if income reaches € 12,000 per year, the owner will be liable for income tax.