Some useful tipsConsidering a property or land in Greece?
What now?
First of all you can search with the help of HomeGreekHome.com to get an excellent feel of the Greek market, price levels and why not, locate the property of you dreams. When you do so, you can ask your estate agent about the next steps. But for the beggining we are going to give you some tips:
1) Find out if the property that you are interested in is within the city plan or let your estate agent/realtor do it for you. Many people bought land (property) at which they couldn’t, by law, have electricity, water supply and telephone network. That is because it is outside the city plan.
2)VAT (AFM) . This is the Greek Value Added Tax and every foreigner and Greek must have one for any kind of transaction. Foreign buyers should apply for the acquisition of a Tax Registration Number issued specifically for taxpayers incurring a limited tax liability at the competent Tax Office in Athens (Tax Office for Foreigners - DOY Katoikon Exoterikou). To obtain this Tax number you will need to provide your passport and a full birth certificate. The full birth certificate must show the names of both your parents.
3)Pothen esches (ΠΟΘΕΝ ΕΣΧΕΣ). You must have proof of where you got the money to buy a property here in Greece, i.e. bank statements.
4)Taxes. The property buyer has to pay the transfer tax, which has to be downpaid before the purchase. A tax declaration for property tax also has to be submitted, but this varies according to the value of the property. The law also stipulates that you “may” have to pay annual tax.
5)Notary public. A contract is needed and only the notary is authorized to do it, by law. You must know that you pay the notary and not the seller. It is usually about 1-2% of the amount listed in the deed of the sale. This probably has nothing to do with the real value.
6)You also need a lawyer to make sure the title is clean. The factual and legal search conducted by the buyer's lawyer at the Land Registry is very time consuming and requires specialisation and experience in real estate law. The uncertainty of the current system of Land Registries is resolved in practice through the examination of the legal relationships in connection with the specific asset over a period of 20 years.
The lawyer must also make sure that the property is unencumbered (free of burdens like mortgages or prenotations of mortgage) and free of claims (no injunctions and enforcement measures or actions pending). In cases of buildings the lawyer has to further examine if the construction works are based on lawful building permission and all real estate taxes burdening the seller have been paid.
The lawyers' fees for the factual and legal search depend on the peculiarity and complexity of each case. The cost varies between 2 - 4 % of the total purchase price depending on the transaction volume.
7)Civil engineer will make sure the house is structurally sound. This is very important as Greece is prone to earthquakes.
8)You also need to know that the realtor’s fee is usually about 2% of the amount of the listed property price.
9) Contract
A Notary Public always executes the contract for the property transaction. The Notary Public calculates the officially estimated price of the property. This "officially estimated price" (the Tax value) is assessed by the tax office and is usually lower than the true purchase price.
The vendor and the purchaser can sign only contracts with a very low assessed tax value. Otherwise they need the signature of a Lawyer. One Lawyer signs for the purchaser, another one for the vendor.
10)Land Registry
Immediately after exchange of contracts the new owner will be registered in the Land Registry. This is the definite proof that the purchaser now owns the property!
11) Expenses
Transfer tax
Municipality tax
Public notary
Lawyer’s fee
Registry of Mortgages
A total of 10%-13% of the property value should cover all expenses.
The purchase tax is between 7%-11%.The fees for the Notary Public and the Lawyer are estimated at 4% of the purchasing price. And if you bought your house with a Realtor's help you must know that charges you 2% as commission for their professional services.
12) You don't have to be in Greece to complete the real estate transaction. Each cotractng party can give authority of representation to another person by signing a Power of Atorney. In most cases the proxy is given to the lawyer of the contracting party, who settles every step of the buying procedure by applying for a tax registration number, paying all necessary taxes and signing the transfer deed. Representation through proxy is time and cost effective. Proxies by the real estate seller and purchaser must take the form of a notarised document. The existence of a Greek Consulate is of huge practical importance for foeign purchasers, as the Consulate can carry out legal actions which, in Greece, fall within the scope of a notary's competence.
13) The cost of buying property in Greece.
The value of a property in Greece is divided into two meanings. The real value of a property which refers to the expectation of the seller and differs from place to place based on the demand and supply.
The objective value of a property is based on the criterias set by the inland revenue authorities for a certain period of time and for certain places. The objective value sometimes approaches real value but as a rule the former differs significally ( 50% lower ).So on the transfer/contract of property is done when the value is not lower than what the objective is.
www.HomeGreekHome.com Post to:      28-10-2007 |
Write a comment
* = required field