Property buying process in Greece

How to buy home in Greece if you're a foreigner

Greece is not the simplest place in the EU to do business, and the process of buying a property can be a bit more complex than in some other jurisdictions. However, the good news is that tens of thousands of foreign buyers do navigate their way through the system every year.

EU nationals can buy property anywhere in Greece. Citizens of other countries have a few restrictions on buying in border areas including the eastern Aegean, Dodecanese islands, Crete and Rhodes, and need local council sign-off for their buying plans. (Agents should be able to help with this.)

There's one warning to bear in mind right from the start; all fund transfers need to come with a 'pothen esches', a statement of the source of the funds. That might be a bank loan statement or a bank transfer statement, for instance. Otherwise, the money might be considered to represent taxable income and the Greek state will want its tax paid.

Speaking of tax, you'll need to get an AFM (tax number) before you can buy, and if two of you are buying jointly, you'll each need one. But unlike some other official procedures, this one is fast and painless, and it can be handled by your lawyer. Once you've got your AFM you can open a Greek bank account; this can take a while to organise so the earlier you start the process, the better.

It's also sensible to register with a currency transfer service to handle the deposit, so you can move fast if you see a property you like.

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Looking around

Some research is needed to decide where in Greece you want to buy. You need to be specific, particularly in the islands; even within the Cyclades, just getting from Santorini to Mykonos takes two and a half hours, and many islands are further apart, with only infrequent links, making multi-island trips difficult.

Finding a good estate agent is vital. Estate agents need to be registered with the Hellenic Association of Realtors (SEK) and some who deal with foreign clients also belong to FIABCI. Whatever you do, don't trust someone you met in a bar, or give a cash deposit to the guy with the handmade 'for sale' sign in front of his tumbledown house.

Be clear about exactly what you want; set your red lines. For instance, if you won't consider a house over a certain price, or without a garden, make that very clear. You can also weed out houses before agreeing to view them using Google Streetview. And you should definitely do your market research so you know what's a good price.

You also want to find a good lawyer, and ideally make contact before you see any properties - and certainly before you pay any deposit. It's no longer a legal requirement that you have a lawyer, but you really need one.

Some important details about the buying process

A small holding deposit of €5,000 or so is normally paid up front, and takes the property off the market for 15-30 days. You should check the terms, but a good lawyer will make sure it's returnable if legal checks or the building survey turn up any problems, or if a loan isn't available to buy the property.

As buyer, you need to hire a notary (simvoliographo) who will prepare the contract and collect taxes due. The notary is the representative of state, whereas the lawyer works for you. A 10% deposit is generally paid onice the preliminary contract is ready, when it becomes binding. You'll finally get possession of the property 4-6 weeks after that.

While as in other notary based systems it's customary for all the parties involved to meet in the notary's office to sign the final contract, many foreign buyers simply give their lawyer a power of attorney to do so.

One small wrinkle is that property purchasers need to file an E9 tax form when they buy the property, together with a Greek income tax form EI (non-residents simply put a zero in the income box). If you don't file you may not be able to sell later.

What should be checked before the purchase?

Legal checks are extensive. Lawyers should check that there's no debt secured against the property, and that property taxes have been paid. They should also check title - a big issue in Greece where property is often left to numerous siblings and even cousins and grandchildren within the family, resulting in a complex web of holdings. New homes will be checked for insurance to cover building defects, for the legality of the development, and for compliance with the seismic code. (That's why a holding deposit should be made returnable if the property doesn't check out.)

It's also important to check the property is in a town planning area, or you won't be able to get fos, nero, telefono - electricity, water and phone service.

What is the full purchase price?

Purchase costs will probably add 10-15% to the cost of the property. Most fees are based on 'assessed tax value', which is usually lower than market value. Purchase tax at 7% is payable on the first €15,000 of the property value and at 9% on the remainder, and a community fee of 3% is payable at the same time. Land registry takes 0.3-0.5% of the value while legal fees are based on 1%, and agency fees can be between 2% and 5% - they're normally split between buyer and seller, so the exact amount is somewhat negotiable.

Finally, on newbuild property, VAT of 18% is normally charged. However, the government has said this won't now be charged for the next three years, in order to stimulate the market.

Note that purchasers must cover all the purchase costs out of their own money before a Greek lender will pay out funds from a mortgage. And mortgages are hard to get - most Greek lenders will only go up to 50% loan to value at the moment.

Buying in Greece is not for anyone who wants an easy life. But pick the right professionals, and it gets much easier!