Property Buying Guide for Greece

Property has become the modern family's obsession. People looking for a holiday home, international investment property or a combination of both will surely have dreamt of owning a house on the Mediterranean. Spain and France, the default choices of anyone buying property overseas, are becoming saturated real estate markets. Among the other European Union (EU) member countries situated around the Mediterranean, Greece offers a sensible investment choice with its plethora of unexploited locations for property development. It attracts people who want to buy property for personal purposes and to enjoy extended holidays.

Greece is an ideal locale for investment in all kinds of real estate – industrial, commercial, residential and holiday property. The entry of Greece into the European Union is attracting foreign nationals to this land. Investment in this new Mediterranean property market is the new trend among many foreigners. The buying preference for Greece has rapidly gained precedence. This attention from property developers and their clients is resulting in well-developed islands and mainland.

Reasons to Buy in Greece

The climate, scenic attractions, low cost of living and wealth of history and culture woo both visitors and investors. The summers are long and sunny with more than 300 days of sunshine, while the autumns and winters are mild and comfortable. A large number of tourists visit this popular destination every year. Purchasing villas to rent or lease to other individuals and tourists proves highly profitable.

The property prices in Greece and its islands are reasonably valued and competitive when compared to the established Mediterranean favorites –such as Spain and Portugal. Greece is still unexploited and undervalued and has a very high potential for capital growth. The property value is appreciating with Europe recovering from recession. It is now a member of the European Union (EU) and facilitates buying property abroad. The political and economic stability is also an added feature.

Different types of property – traditional stone houses to trendy new apartments and farmsteads - are available. The Greek community consists of a unique blend of both domestic and international owners. The splendid villas attract people who want second homes and holiday properties.

Popular Property Sites

Kos where Hippocrates taught medicine, Rhodes with its history of Collussus, Crete the land of King Minos, and Santorini with its amphitheatre of village houses dotting the hillsides are popular sites to mention just a few. The Greek islands are traditional favorites for British people, while mainland Greece attracts Germans, Scandinavians and Eastern Europeans. Crete is a popular holiday destination known for its history and varied landscape with snowy mountains and sandy beaches. The good rental potential of Crete makes it popular among investors. The Peloponnese peninsula in southern Greece attracts people seeking a less established market. The place has excellent potential for capital appreciation.

The prices depend on the location and condition of the property. The property in coastal and island areas, such as Crete, Corfu and Rhodes is very expensive but easier and more profitable to sell. The property in inland areas of the mainland, though relatively cheaper, usually requires extensive renovation. This becomes costlier because the older properties almost certainly lack electricity, water supply and sanitation. Its resale value is also low. Buying new property is a good investment opportunity, with no renovation costs and high resale value – particularly for those with splendid views of the sea.
The airline services to these places are good and improving.

Buying Process

Foreign nationals who seek to buy property in Greece should have a proper understanding of the buying process along with its requirements and regulations. Otherwise, it can be a rather confusing and complicated process.

Foreign nationals can purchase property in most locations but must get prior approval from the local prefecture in certain areas of Greece. Then the person must also obtain a tax role number, known as AFM, from any tax office in the country. Citizens of Greece or another EU nation need to show their government issued ID card while those from other countries must show a passport to obtain the AFM.

A foreign national will also need to obtain a ‘pink slip’ for wire transfers of money from abroad. This helps the Government to track the origin of the money. Opening of a bank account in Greece is essential for all money transactions before purchasing any property.

An English speaking lawyer with thorough knowledge of procedures can help the whole process. They would prepare a draft of the preliminary contract after the offer. Paying a deposit amount would execute this agreement. The buyer and the seller sign the final contract of sale before a public notary. The buyer has to pay the outstanding balance amount, after which the notary registers the new ownership.

Fees and costs of purchasing and registering property in Greece are slightly high. They account for 13-15% of the purchase price and include fees, taxes, land registration and fees of the lawyer and notary. VAT is payable on new buildings.

The system of bureaucracy demands the approval of a number of documents before any transactions of property take place. The non EU citizens are required to submit more documents than EU citizens. Apart from this distinction, all the property owners share the same rights. All ownership rights on new property are done on freehold.

Financing

Many options of financing the purchase are available. Banks offer mortgage or home loans to both domestic and foreign home buyers, though the system of lending is not as proficient and smooth as in other Western countries. The interest rates are lower than UK rates making the option attractive.

Taxation

Property taxes in Greece are highly ambiguous but are one of the lowest among the developed countries. Non-residents are also liable for property, wealth, income, inheritance and gift taxes. The UK has a double-taxation treaty with Greece that allows a person to pay tax in one country or the other, not both. When obtaining the AFM, submission of annual tax return, regardless of the income, is mandatory.

Buying property abroad requires vigilance and thorough research. Visiting the chosen location at different times of the year and sticking to a budget is important. Exploring the resale market for the property, even when there are no intentions of selling, is crucial. One has to seek professional advice and guidance specific to the individual’s requirements in matters of property purchase, potential rental returns, taxation and mortgages.
Greece is a treasure of unseen places, and a heaven for property owners and retirement homes.