Hello!
Here's my feedback on how i bought my holiday home in Greece. I tried to as complete as possible.
A) Choosing the region: this is above all a matter of taste, desires, feelings and personal objectives.
In my case, it was out of the question to end up on an island with little infrastructure, difficult access and where everything is much more expensive than on the mainland. There are beautiful spots all over Greece.
I set myself practical and technical limits: +/- 15min walk from the beach (but certainly not on the beach or seafront), max 90min drive from an international airport, max 15 to 20 min from a town. A house in the middle of nowhere, not in the mountains or in the forest, at a height of at least 7 m above sea level. Not too many neighbours or packs of tourists.
Some people will say I'm being a bit radical, but I'll explain: on the seafront, a house deteriorates at an incredible rate. The Mediterranean Sea can also break loose, and a house at sea level 100m from the shore is not safe from the water. As for the plains, this is to minimise the risk of fire. Some of the plains are filled with olive trees, which the owners treasure like the apple of their eye. The olive fields are regularly weeded and ploughed, which greatly limits the spread of fires.
Our choice fell on the Chalkida region, and more specifically the Alikes plain in the middle of olive groves.
B) Finding the property: Agencies, the internet, and above all going to the location. Sometimes things happen by chance, but don't expect to find the rare gem by wandering the streets.
In my case, I almost found the house by chance. I pushed open the door of an agency to put a friend's house up for rent. By the way, I asked them if they had anything in the area, as my internet searches hadn't turned up anything concrete. I found houses for sale, but the price range was unrealistic. At first they said no, but then the boss turned round and said "Yes, there is one"... and that was it. Believe it or not, I only visited one house, and I was probably the only interested buyer.
There are sites like https://www.spitogatos.gr/,www.xe.gr and https://en.tospitimou.gr/ that concentrate a large proportion of the listings, but not all the properties are listes there. I've found that the more expensive a property is, the more likely it is to be found on the big platforms, and the less expensive it is, the less likely it is to be found there.
Once you've chosen one or more regions, try to find the local agencies and visit each of their websites. Sometimes properties are in 2 or 3 agencies, when they've been for sale for a long time.
In my case, the property was offered to me by one agency, even though it had been put up for sale by another that I hadn't spotted. This is not unusual, as professionals in the sector know each other and talk to each other. The property that was offered to me had no signs stating it for sale, and was only listed on the original agency's website (and not on general websites).
C) The price: As far as I was concerned, the house was advertised at 170,000 and sold for 135,000 with everything it contained (furniture, household appliances, maintenance tools etc), for 95m² of living space, 80m² of outbuildings, 20m² of covered terrace, pergolas on 4 sides of the building etc.
The Greek valuation system is mainly based on the number of m² built (and not the number of m² of living space). Then, as everywhere else, there's the plot, the location, the age, the condition of the property, etc.
There are huge price disparities. They range from 1,300 to 10,000 euros per square meter.
Don't expect to find anything decent for less than 100,000eur. I know someone who has been looking in this budget for several years, without any results. Greece is not Italy. You won't find "abandoned" village houses for 25,000 euros.
The Indomio website can be very useful in giving you an idea of the current prices on the Greek property market: https://www.indomio.gr/en/agora-akiniton/. Please note that this website does not index final sale prices, but the average of prices asked by advertisers.
Outside the islands and big cities, the market seems fairly calm to me, and remains out of reach for most Greeks (but that's just my feeling). Given the number of properties for sale and the unfavourable credit conditions, logic would push the market to decline, but this is not the case. In fact, Greeks would rather not sell than sell off their property. So, there's a kind of status quo.
If you're looking for a holiday home, you can find some pretty nice properties at decent prices, but don't expect to get the bargain of the century.
In mainland Greece, you can still find holiday homes of +/-90m² on a 1000m² plot near the sea, for less than 150,000Eur... but the day you want to sell, there won't be many buyers. The taxation system is such that it has become difficult for Greeks to own a second holiday home. I've seen quite a few properties for sale over the last 1 or 2 years...
As for purely residential properties or built-up areas, that's another story.
D) Payments and the practice of deposits :
Down payment: It is common practice to ask for a down payment and to draw up a preliminary sales agreement before going to the notary. This deposit is negotiated between the parties, but should not exceed 10%. This stage is handled by lawyers (sometimes by a public notary). This deposit does not always seal the sale definitively. For example, a suspensive clause linked to a credit agreement may be agreed. If the buyer withdraws from the sale, without a suspensive clause, the deposit is lost.
Sellers often use the money from the deposit to regularise their property if it is not in order administratively. If the transaction fails because of the seller (because they were unable to regularise their property, for example), they have to repay DOUBLE of the down payment... But this is theoretical. Never forget that paying a deposit involves a risk.
The deposit can be paid in cash. This is a practical solution seen that immediate payment of the deposit seals the preliminary sale agreement. Some sellers will refuse to come and sign if the money is not on the table, or in their account. It's not a good idea to pay the deposit before signing the preliminary sales agreement, so having a cheque or cash in hand at this stage is a practical solution.
Payment: Be careful about payment. Unlike in other countries, notaries, lawyers and estate agents NEVER collect the amounts due to the vendor. Whether it's a deposit or payment of the principal, the buyer pays the seller directly. If you go through a bank that no longer issues cheques (my case), you have only 2 options: Pay by bank transfer or in cash. If you pay by bank transfer, it's almost impossible to pay instantly, as the amounts often exceed the limits imposed by SEPA (€100,000). You will likely have to go through a 2 phase notarial deed procedure. A first notarial deed to conclude the sale, and a 2nd to record the payment. This procedure does not really complicate the sale, but it does make it a few days longer. Note that the presence of all the parties is not really mandatory for this 2nd notarial deed.
Cash: Possible for the deposit, but not recommended for the principal. Technically, there is no limit to the amount of cash you can carry with you within the European Union. However, any sum exceeding €10,000 in cash must be justifiable and declared in the event of an inspection. As long as you are able to answer the authorities questions about the origin of the funds, there should be no worries. Regarding cash transactions, there are limits and exceptions. Cash payments in Greece are limited to 500Eur, with some exceptions. I paid the 10,000 deposit in cash and nobody was shocked. So, I suppose that real estate is one of those exceptions.
Frankly speaking, the hardest part was getting the cash from a bank, because there are limits on withdrawals. In the end, I went to my country's central bank, which 'sold' me some banknotes. I didn't make a withdrawal, but a 'purchase', with a much higher limit. I received a stamped and signed proof of the origin of the funds.
Remarks:
- SEPA payments and instant payments: Most Greek banks are part of the SEPA instant payment system. But, for this to work, the 2 banks need to be affiliated to the same communication networks, which is not necessarily the case. I advise you to carry out a symbolic payment test of €1 to check that it works.
In practice, instant payments are limited to 100,000 per payment or per day. Depending on your bank, these amounts may be increased, but this is not so common. Check all this with your bank. If it works for you, you could be able to pay for your house immediately on signing the final deed.
- If you're in a hurry, there's the alternative of urgent international payment. It's more expensive, but the funds are transfered in less than 24 hours.
- Some people may be tempted to pay part of this in cash to avoid paying tax, but this is not a good idea. The properties are sold through an estate agent, 2 lawyers and a public notary... and everyone is paid on commission. That's a lot of people to get involved to earn 3000Eur per 100,000Eur.
Capital gains are heavily taxed for the first 5 years. If you sell a house that you under-reported when you bought it, you will lose money.
Greece has introduced a system of objective value taxation. Being below (or close to) this value will only alert the authorities to an unusual situation.
On the other hand, not paying VAT is THE national sport.
E) Legal status of assets: A Greek story?
A large proportion of the Greek housing stock is NOT legally registered.
In rare cases, houses are built in compliance with permits, but often they have been regularised at best.
Don't be surprised if you are offered a 100m² house built with a permit for a wooden chalet (or even without a permit), but "legal".
This is where you'll need a good lawyer and a notary to check the feasibility of the purchase.
Since 2011, the government has required sellers to prove that the property for sale is 'legal'. As mentioned above, sellers sometimes use the amount of the deposit to regularise the property they are selling. This can go very well, or end in disaster.
I know of 2 cases among my close friends. In the first case, the legalization process went smoothly and he bought the property. For the 2nd, it was much more complicated: he tried to sell his house, but after 12 months of paperwork, he couldn't complete the legalization process! As a result, he found himself in a very unfortunate situation where the buyer was entitled to ask the sale be stopped, and ask the deposit to be paid in double!
If you're going to buy a house that's not 100% in order, bear in mind that it can take up to a year to get the situation sorted out. If it's just a matter of measuring to rectify the land registry, or an energy certificate, it can go very quickly (2 months).
Finally, you will need to adapt a little to the Greek property philosophy and its "1001 exceptions and arrangements". Even if a house has been built without permit, or without having complied with the permit, as long as it has been regularized with a positive outcome, and the owner has paid the fine etc., it is "legal"! It will remain a house built in breach of its planning permission, but it is "legal" and will never be subject to demolition proceedings.
You'd think that these practices of getting away with breaking the law would have stopped with the crisis, but that's not the case. Many holiday homes are still built on seafront land that has been declared unbuildable. However, if you own 4000m² of land along a road, you can break the law and build a house with 200m² of living space. Except that some houses are much bigger: fake cellars, balconies or 'non-habitable' outbuildings are built, and a building of over 300m² with a swimming pool is legalized.
In short, the law is clearly in favour of the well-off, because the main idea is to make money for the state.
It's also easy to see that these so-called 'non-constructible' plots are often serviced, with access to drinking water, electricity, telephone and a named road. In short, arrangements are made, and the local authorities are involved.
G) Example of purchase costs based on a transaction of 135,000Eur:
Agency: 2700 Eur + 24% VAT - in practice up to 2% for the buyer and seller.
Lawyer: +/-800Eur + 24% VAT
Notary: +/- 1850 VAT for 2 deeds: Sale and statement of payment (1750+100 Eur)
Transfer taxes: 4171.5Eur (3.09%) => To be paid before going to the notary.
Registration tax: 839.5 Eur => To be paid within 24 hours of registration.
Accountant/AFM : 240 Eur for 3 issues i.e. 80Eur/n°.
Sworn translator in Greece: 80 Eur (6 pages and present as interpreter at the pre-sale agreement)
Sworn translator outside Greece : 150 Eur (+/- 6 pages)
Interpreter at the consulate: 150Eur (for power of attorney)
Consulate notarial deed power of attorney: 240 Eur (60Eur/2 pages + copies etc.)
Consulate power of attorney/declarations: 40Eur (10 Eur each)
H) Notarial powers of attorney: If you do not wish to go back and forth to Greece at each step of the process, you can manage the purchase remotely by means of a notarial power of attorney in favour of your lawyer. All notarial deeds are to be signed in GREEK. As a non Greek reading/speaking person, you will need an interpreter to be present on signature day. The interpreter will orally read the document in your language. However, documents are not translated in writing into your language unless you request it. In Greece, lawyers often act as interpreters, (but never outside Greece).
Solution 1: You sign this power of attorney in Greece in front of a notary and in the presence of an interpreter. This is probably the cheapest and quickest option.
Solution 2: You sign this document in a Greek consulate in the presence of an interpreter. Longer and more expensive than option 1. You have to send them the document for reading and approval, find an interpreter for the day of the appointment, etc.
I) Timing and progress:
I visited the house on 10/5 (without the owners), 'pre-negotiated' with the agency that evening, and went home to secure the financial and legal feasibility of the project. I returned on 16/6 to meet the owners (without the agency). Having reached an agreement, the agents were invited immediately to confirm the deal, and I met my lawyer that same evening. I signed the pre-sale agreement on 3/7 and paid the agreed deposit. I signed the final deed on 29/9, and the repayment deed was signed by the sellers around 5/10.
We could have gone faster, but Greece is at a standstill in August and the seller wasn't ready. Whatever the agencies tell you, transactions often take 3 to 4 months.
1. Find the property + Ask the agency about the legal status of the property. If OK, discuss the price and ALL THE OTHER TERMS AND CONDITIONS and the actual content of the sale: building, furniture, outbuildings, co-ownership and access, deposit, deadline for making the property available.
Then, you sign the proposal accepted by the seller on the estate agency's form, which sets out the commission payable by the buyer.
2. Lawyer: At this stage, the lawyer will check the legal status of the property. He will set his fees and will probably refer you to an accountant for your AFM numbers. While you're there, take the opportunity to sign immediately a power of attorney to your accountant (legalized). The sooner you have them, the better.
In the meantime, the lawyer will prepare a pre-sale agreement with the seller and assess what documents are missing (energy certificate, up-to-date plans, etc.).
3. Sign the agreement and pay the deposit (cash or bank transfer) in the presence of an interpreter if you cannot read Greek. At the same time, open a Greek bank account straight away, using the AFM number and your signed sales agreement (+ all the other documents required by the bank).
4. Notary: Checks the legal situation, prepares the final deed and any powers of attorney, and sets the amount due to the State for the transfer of ownership (3.09%). You pay him a deposit.
5. You pay the transfer tax BEFORE you sign the deed, and provide the proof to the notary. Please note that you can only provide immediate proof of payment if you pay by Greek bank card. If you pay in any other way, it will lead to a waiting period. Having a Greek payment card is an advantage at this stage. Otherwise, you will have to go through a trusted third party. It is possible to pay Greek taxes by SEPA transfer from a foreign bank account, but again, you won't receive a proof of payment immediately. (see : How to pay Greek Taxes via SEPA system & TAXISnet https://taxnet.gr/en/usefull-topics-en/ … 3-methods/ )
6. You sign the final deed, pay the real estate agency (usually cash) and the notary (cash or transfer). The notary acknowledges payment on the spot (cheque), or by means of a 2nd notarial deed a few days later if you pay by bank transfer.
7. The notary registers the house in your name and sets the cadastral tax: you have 24 hours to pay it => NO JOKE. Once again, having a Greek bank account at this stage is an advantage.
8. A few weeks later, you get a property deed. Make copies for :
- registering your property with the local council
- Your tax return for the property (accountant) to pay your annual ENFIA tax
- Service supplies: water/electricity/telephone/internet, etc.
9. Enjoy your Greek House.
Regards,
T.
