The 3 steps
The 3 Steps for buying real estate in Greece
Think of buying real estate in Greece? You are not alone. You see, Greece is not only just a popular travel destination. It is an extremely preferred one, according to the Institute of Tourism Research. Last year, even the predictions fell short: approximately 17 million people visited Greece throughout the year. If you’ve been in Greece there is no need to say more of why visitors keep coming back…
Not surprisingly, Crete is the most popular travel destination in Greece. Over the last five decades, the demand for Crete as a desirable property hotspot has been proven by all those that seek:
- a holiday in the sun
- the brilliant climate almost all year round
- the splendid environment
- the low cost of living, in comparison to other countries like Italy, Spain, Portugal or Cyprus
- the warm welcoming hospitality of the Cretan locals
- a retirement home
- a holiday home
- an investment opportunity
Given much thought, and having finally decided to make your home in Crete, there are several things to bear in mind, and 3 basic steps to take, which will help you in starting your search for a property purchase. When buying real estate in Greece, you are most likely to expect things to be done differently compared to your home country. The procedures can initially seem confusing, but it is essential that you have a clear idea of your basic requirements, along with some basic planning and calculations.
Although these 3 steps will be refined as your search for property purchase develops, they are the basic initial factors to be considered.
We do hope that the following listed steps and information assist and provide you with a deeper insight before buying real estate in Greece.
1. Property research
Once you have looked into and arranged your finances, your first step is to figure out your budget and what you want at the price you can afford. Try to decide what kind of property in Crete you would like to buy and give some thought to where you would like to live.
Before buying real estate in Greece, it is important that you know exactly what your requirements and basic property specifications are. Decide what property is ideal for you regarding the following:
- Area: in a city, in a village or outside a village?
- View: Sea view or mountain view?
- Property size: land and building plot area in m².
- Type of house: modern, traditional, stone-built, villa or renovation?
As soon as you have firmed up on your Crete property requirements, your second step will be to plan a date and carry out a:
2. Inspection / viewing trip
After having searched and browsed through various Greece property agents, the property search has commenced and your second step will be to visit Crete to pursue your future home.
We advise you to treat this more like a business trip, as it is very important in the process of buying real estate in Greece. Make sure you collect all the relevant information possible, plan to look at locality as well as properties and be sure to take your time. One of our services is to help you plan your trip and make the necessary appointments in order to view a selection of suitable Crete properties that match your requirements.
3. Things to consider after the viewing
So you have just completed your viewing inspection trip and found the property of your dreams? Now that you seriously consider buying a real estate property in Greece, take a breath and stop. It’s time to go over a few things beforehand.
Is the location you found suitable to your needs? Keep in mind that Crete is slightly different during the winter months, especially if you are moving for retirement or on permanent terms. Most facilities and shops in those beautiful villages close down in winter, so it is very important to know what type of amenities matter to you. Ask where the closest shops, tavernas, bus route and hospital are.
Ask to see a signed, up to date topography, showing and marking the boundaries of the property. Go through the architectural plans and brochures provided. You are not sure and can’t remember details, as you were caught up in the heat of the moment? No problem: arrange a second viewing appointment.
Finally, remember: buying the right type of real estate in Greece – and all over the world - is not always a matter of only concrete and bricks.
2.3.2. Legal matters
Before buying a property in Greece, keep in mind the following legal matters...
Regarding buying a property in Greece, European Union (E.U.) citizens have the same rights and obligations as any Greek citizen does. All E.U. citizens can buy and own properties in every E.U. country. The rules and procedures applied for property purchase is pretty much the same across E.U.
Since 1981, when Greece became a member of the European Union (called European Community back at the time), European citizens are free buying any kind of property they wish in Greece, the only possible exclusions being various areas that are considered to be “sensitive“, like an airfield or a piece of land that belongs to the military. In these cases, a special permission from the Greek government must be issued first.
Although Greek law does authorize foreigners to own property in most areas, restrictions do apply for non-E.U. citizens who are interested in buying property in Greece. If this is the case and you are a non-European National, you can surely still purchase property, just keep in mind that the whole process could become more delayed than that of an E.U. citizen.
Before buying property in Greece, you have to apply for a license on your behalf to the Ministry of National Defense, submitting the title deeds to the property, and getting prior authorization, otherwise your contract will be void and not legal. Your credentials will be checked and the purchase will either be approved or not. This process could take 6 to 8 months, and there will also be an issue of immigration to be addressed. In short, the law breaks down into two basic procedures, one for European citizens, and the other for non-European citizens. As a result the applications and required documents vary.
As the first legal step in the process of buying a property in Greece, it is highly recommended to appoint a lawyer to handle all the legal work for you. You should do that just after you have chosen the property you wish to buy in Crete. We advise you to appoint an English speaking lawyer, preferably one who is a local, as they will be on the spot to do searches and will know local laws and regulations. You will need to sign power of attorney over and who will in turn explain the legal aspects of your purchase and will undertake to act on your behalf throughout the proceedings.
Your lawyer’s role is to act in your interest. Most buyers prefer to give power of attorney to their lawyer; this allows them to carry out all the necessary checks, paperwork and payments in your absence. This document must be drawn up by a government appointed solicitor (This can be done in your home country but it is easier, quicker and cheaper to have it prepared while you are in Crete). The whole process takes about an hour.
He/she opens a joint bank account, thus enabling you to transfer funds to finance your purchase and obtains you a Greek tax number, known as an AFM number in Greece, which is required by law for everyone buying a property in Greece. However, please note that the public notary will not authorize any sale, if the appropriate tax papers and deeds are not in order. Also note that the property purchase contract is always executed before a notary and in the presence of lawyers representing the seller and the purchaser.
It is important to know a few facts regarding the building permission before buying a property in Greece. According to Greek laws, there are 3 types of planning permissions granted to plots:
- Not within the village permit: If a plot of land is not within the town plan and if there are no forestry or archaeological restrictions, permission to build can be granted for any plot of minimum of 4.000 m² for every 200 m² building permit.
- Within the village permit: If a plot of land is located within a planning zone, it is usually classified in the “perimeter”, meaning having frontage to a principal municipal road. In this case, permission can be granted for plots of land of 2.000 m² for every 200 m² of building.
- Inside the village permit: If a plot of land is located inside villages, towns and cities, permission to build can be generally granted for any plot.
Note: Most architects are aware of plots that are situated in considered archaeological areas and should notify potential customers beforehand, in order to get authorized permission from the archaeological service. This procedure usually does not take long.
To sum up, buying property in Greece is not much more complicated that buying property in your home country. Just use the same common sense, apply the same type of methods, and make the same legal checks.
2.3.3. Money matters
In Crete, the property sales procedure is more familiar than you think
In Crete, property sales follow the same financial pattern as in every part of the European Union. As a potential buyer, you should note that all documents regarding the property purchase, regardless any Crete real estate agencies, including the purchase tax, Public Notary, legal fees, accountant fees and land registration fees, are always paid by you, the purchaser. These fees are usually calculated on the estimated price of the purchased property. In addition, the total expenses are forecast around 10%; the variation being dependent on the Tax Office assessment of the property for purchase tax purposes (normally substantially less than the purchase price.). The approx. 10% forecast includes usually all the above mentioned.
Every year you will be required to do your tax return, which means that you will have to provide all your receipts of purchases such as houses, cars, boats and bikes etc, not including the receipts of small items purchases such as furniture or electrical appliances. The tax return is submitted every May and concerns the previous year (January to December). If you live abroad, it is highly recommended in authorizing an accountant to represent you in front of the Tax Office.
You will be advised by your lawyer to transfer all your money via bank transfer in order to have a proof of foreign currency transferred in Greece, therefore making you eligible of tax exemptions.
In order to finance your Crete property purchase, it is possible to take a loan – in fact, it is very common. Conditions are similar to those in the rest of the European Union (E.U.). Most banks will give of up to 80% for 30 years or more. They will not ask for overseas security, but they will ask for proof of earnings and tax returns of approximately the last two years.
Obtaining an acceptance for a mortgage, will give you the head start you need to purchase a property. This service can be arranged whether you have yet to visit Greece. Once an acceptance has been completed, you will know the range of property values you will be able to purchase at and place an offer, confidently knowing that you can raise the necessary finance to support this. Mortgage costs in Greece vary from the property type being brought to the purchase price being paid.
The majority of Crete real Estate agencies and construction companies apply general rules and follow similar procedures for Crete property purchase.
At the same time, you will receive a Sales Confirmation Letter from the Crete real estate you are dealing with, confirming all of the sales details and advising you of the Stage Payment Program. A copy of this is also forwarded to your lawyer.
Your Crete property sales person will also complete a specification sheet with you. This is a detailed document which will describe your choices of tiles, kitchen cupboards etc and list and price of any extras that you would like to have in your new home i.e. solar panel, central heating etc. They will also take you to select your tiles and fittings.
Copies of this specification sheet are passed to the builder of your Crete property site, to your Sales Person and attached to your Sales Confirmation Letter, so everyone is aware of your particular requirements.
After you have returned home
There will be the following stage payments on the dates you have mutually agreed with the Crete estate agency, completed on the Sales Confirmation Letter while you were in Crete.
The most common ways of payment stages Crete property agents employ are:
- Stage Payment 1 – 10% Deposit
- Stage Payment 2 – 30% Land Purchase
- Stage Payment 3 – 20% First Construction
- Stage Payment 4 – 20% Second Construction
- Stage Payment 5 – 20% Final Construction
Stage Payment 1: Deposit
This down payment is used to secure the purchase of your chosen Crete property and is required on signing per-contract agreement, which should contain the names and description of the parties, the description of the property, the price and any general conditions. Having received your Bank Account details, you should send 10% deposit to your joint account in Crete in order for your lawyer to carry the searches on the property and Register to ensure clear title. He/she will then pay the deposit to the construction-real estate agency and the Public Notary will prepare new deeds.
Stage Payment 2: Land Purchase
You will receive a request for 30% of the purchase price to complete the Crete property Land Purchase. On completion of Stage Payment 2, your land is then registered in the local Land Registry in your name and a copy of the deeds of your property is sent to you by your lawyer. Payment of the lawyer’s fees and purchase tax accounting of the purchase price is also required at this point. Your lawyer will advise you of the exact amount.
Note: Many customers combine Stage 1 & 2 payments into one transfer, reducing UK bank commission and charges and enabling earlier processing of their land purchase and therefore an earlier start to building.
Stage Payment 3: First Construction
Request for further Stage Payment will be sent to you before the required payment date, thus giving you time to make funds available for transfer. Stage Payment 3 is the first construction payment which includes your Crete property License fee, architect and civil drawings, building permits, excavations, and concrete foundations.
Stage Payment 4: Second Construction
Request for Stage Payment 4 will be sent to you before the required payment date. The second construction payment pays for the construction of floors, stairs, exterior and interior plastering, tiling, and bricking up.
Stage Payment 5: Final Construction
Request for Stage Payment 5 is the last and final payment of your Crete property. At this stage you will also be required to pay for any extras also. This payment pays for the purchase and installation of bathroom and kitchen fittings, doors and locks, painting and varnishing, roof, balcony or terrace, windows and shutters, ceilings and electrical and plumbing installations.
Buying a property in Crete? Have you checked the guarantee?
In the most common case, before you purchase a property in Crete, you should look for a company that offers a two year construction guarantee on a new-built house.
If buying off plan, make sure the company meets the building delivery date given, thus obligating them in signing an agreement (set up by the solicitor representing you) stating the date agreed - or facing penalty.
Penalty is whatever you agree with the construction company for every month they are late in completing the construction of your property in Crete.