Stages of real estate purchase in Greece, Europe
Title transition and registration in Greece follow a transparent, easily controlled, and public procedure. As a member of the European Union since January 1981, both national and European legislation apply to property transactions.
When a property transaction involves a non-Greek citizen, the following steps should be taken:
Drawing a Power of Attorney: This document is prepared by a Greek notary in the presence of an accredited translator (which is mandatory). The Power of Attorney grants authority to a lawyer, whose name is specified in the document, to act on behalf of the foreign buyer. It includes powers necessary for preparing and executing the Property Purchase Agreement, relieving the buyer from complex legal formalities.
Tax Registration and Bank Account: The authorized lawyer registers the foreign buyer as a taxpayer in Greece and opens a bank account in the buyer’s name at a state bank.
Property Checkup: The authorized lawyer conducts a thorough check of the state Property registry, investigating the property’s history, existing or previous mortgages, encumbrances, charges, and any relevant contracts or agreements related to the property. A report with all relevant findings is then prepared, signed, certified, and delivered to the prospective buyer.
Title Transition Tax Statement: The lawyer prepares a Title Transition Tax statement and submits it to the local tax authority. The tax rate is either 3.09% if the property’s construction permission was issued before January 1, 2006, or 24% if it was issued after that date. However, the payment of the 24% tax is suspended until December 31, 2022, as per Article 6 of the VAT Code (L.2859/2000).
Signing the Principal Property Purchase Agreement: Both the buyer and seller sign the agreement in the presence of a notary and an accredited translator. After signing, the lawyer registers the agreement in the State Property Registry, which is the final and mandatory step of the property purchase transaction.
Document Package: Once the Principal Property Purchase Agreement is signed, the buyer receives a comprehensive package of duly notarized and translated documents in their native language. This package includes the Construction Permission, Power Consumption Certificate, Property layout plan, and its topographical plan.
These procedures were provided by the Legal Department of Grekodom Development company to facilitate property transactions involving non-Greek citizens.
Legal principles of property transactions in Greece.
The property purchase procedure in Greece is now straightforward and efficient, taking only 10 working days to obtain full title to a Greek property. In the past, there was a boundary regime law until June 2011, which necessitated buyers seeking to purchase property near the state border to apply for permission from the Greek Ministry of Defense. This led to a lengthy process with a large package of documents, taking several months to complete. However, the procedure has since been simplified, and all property purchase formalities can now be concluded within 10 days. The list of required documents has also been significantly reduced.
List of documents for real estate registration:
- Valid international passport
- Valid visa permitting entry to Greece
List of documents for opening a bank account in Greece:
- Valid international passport
- Valid visa permitting entry to Greece
- Document confirming permanent residence (internal passport of the country of residence)
- Letter of employment confirmation (an official document validating the primary professional activity of the potential buyer, with the specific type of employment being of no importance)
- Copy of the tax return.
These streamlined requirements make the real estate purchase process in Greece much more efficient and accessible for buyers, without the previous complications associated with boundary regime laws.
Expenses for real estate purchase in Greece
When signing a property purchase contract, you should be aware of the additional expenses and fees that you will be required to pay. These expenses are calculated based on the property’s actual price and the applicable tax rate.
If the property price is €100,000, and the tax rate is 3.09%, the expenses are as follows:
- Lawyer’s fee: €1,500 (1.5% of the property price) + 24% VAT = €1,860
- Notary’s fee: €1,500 (1.5% of the property price) + 24% VAT = €1,860
- Title transition tax: €3,090 (3.09% of the property price)
- Mortgage registry fee: €650 (0.5% of the property price + €150)
- Estate agent’s fee: €2,000 (2% of the property price) + 24% VAT = €2,480 Total amount: €9,940 (Please note that this total amount cannot be considered a service fee calculated based on the property price).
On the other hand, if the property price is €100,000 and the tax rate is 24%, the expenses are as follows:
- Lawyer’s fee: €1,500 (1.5% of the property price) + 24% VAT = €1,860
- Notary’s fee: €1,500 (1.5% of the property price) + 24% VAT = €1,860
- Title transition tax: €24,000 (24% of the property price)
- Mortgage registry fee: €650 (0.5% of the property price + €150)
- Estate agent’s fee: €2,000 (2% of the property price) + 24% VAT = €2,480 Total amount: €30,850 (Please note that this total amount cannot be considered a service fee calculated based on the property price).
It’s important to keep in mind that the lawyer’s fee may vary between 1.5% to 2% of the actual property price, depending on the region of the purchase. Additionally, the payment of the 24% tax is suspended until December 31, 2022, as per Article 6 of the VAT Code (L.2859/2000).
