How to buy a property in Crete

A. PROCEDURAL MATTERS
What's the procedure I need to follow once I decide to buy a property?
Once you find the house that suits you, and you decide to proceed with a purchase, you will then need to follow these basic steps:

1. Appoint a Lawyer
The Buyer must appoint an attorney to assist him with and represent him in the process. Our company can either provide you with a list of reputable real estate attorneys here in Greece or immediately assign one for you, subject to your consent.

2. Appoint a Public Notary
A public notary must be appointed since any property purchase agreement, in order to be valid, must be done in the presence of a public notary. The public notary does not represent the interests of the Buyer. (S)he is a public official in the presence of whom the contract is read, understood by both parities and signed. The notary drafts the contract and is responsible for the verification and registration of the transaction in the public records, so that the buyer acquires the official title of the property. Our company can either propose a number of notaries for the buyer to select or immediately assign the one responsible for the contracts of a specific project, subject to your consent.

3. Get a copy of the title deed and perform a title search at the Registry of Mortgages
The buyer must obtain the contract deed (title) held by the vendor. This can be done with the help of the lawyer. It is then the lawyer's obligation to search the title deed at the registry of mortgages. The search must be carried out in order to secure that:

The vendor holds the absolute deed of the property.
The property is unencumbered.
All property taxes burdening the vendor have been paid.
The construction was completed in accordance to all planning and building permissions.
Only if the title deed is secure should the buyer proceed to contract.

4. Issue a tax registry number (AFM)
A tax registry number must be issued for the buyer, to be able to proceed with any transaction. The tax registry number is applied for and issued by the Inland Revenue Service.

5. Pay the transfer tax
The transfer tax must be paid to the local Inland Revenue Service by the buyer prior to signing the contract. This can be done with the aid of the attorney.

6. Signing the contract
In order to have a valid contract, it must be signed in the presence of a public notary. When the contract is signed, the notary registers the transaction at the local registry of mortgages.

7. Effect transfer at the Registry of Mortgages
The buyer's attorney makes sure that the title is transferred to the buyer's name by obtaining the relevant certificate from the Registry of Mortgages.

8. Notify the Land Registry for the transfer (if applicable)
A copy of the title, and the certificate from the Registry of Mortgages is needed to register the property under the buyer's name at the Land registry. Not all regions of the country have a Land registry, as Greece is currently undergoing the process of establishing a Land Registry. In areas that do not yet have a Land Registry, ownership of property is based on and secured by the local Registry of Mortgages.

What are the costs associated with this procedure that burden the buyer?
The buyer has to cover the following costs to complete the transaction:

Lawyer's fee: about 1-2% (subject of agreement) on the selling price adding the legal research and any other legal advice had offered to the client.
Fee of public notary: 1,3% on the value of the property.
Transfer tax: This is payable to the local tax authority and amounts to 9% for the value up to 15.000 Euro plus 11 % for the value above 15.000 Euro. In areas that are not covered by a fire department these figures drop to 7% and 9% respectively.
Municipality tax: This amounts to 3% of the above transfer tax and is also payable to the local tax authority.
Registry of Mortgages: The fee payable to the registry of mortgages amounts to 0.45 % of the property value.
Brokerage fee: The brokerage fee is between 2-5% on the selling price, depending on the agency and location of the property.

Are there any yearly costs related to property ownership?
Yearly property taxation in Greece is limited to the following:

Local municipal tax: The council tax ranges from 0.025 % - 0.035 % on the assessed value of the property and is incorporated in the electricity bill.
Yearly property tax: Owners of property pay a yearly property tax ONLY if the assessed value of their ownership/s exceeds the amount of 243.000 Euro. The tax amounts 0.3 % to 0.8 % of the assessed value of the property.

What is the “assessed value” of a property and what is its use?
The "assessed" or "objective" value of a property is the minimum accepted value for transaction purposes set by the State. These values are calculated by the Public Notary and the Inland Revenue service for each individual property and are based on public data relating to prices per square meter as well as other location or specific property characteristics. Assessed Values constitute public information readily available. The other use of the assessed values, as previously stated, is for the calculation of yearly property taxes.

How is the ownership of property secured in Greece?
The ownership of property in Greece is secured, by a state authority called Registry of mortgages. Titles to property are kept there, where all encumbrances on properties are registered. Property is filed under the names of the owners and lawyers are entitled to check property belonging to any individual or company. A title search is performed in order to find out if there are any claims, liens and encumbrances on the property. A title search will also show you if the property was properly transferred. This is always done during the contracts process.

B. FINANCING AND OTHER MONETARY ISSUES

How can I transfer funds from my home country to pay for the property?
It can be done by a simple bank transfer from your account to your account in Greece. Buyers are advised to officially document any funds imported for buying property so that in case of a subsequent sale of the property, the proceeds can be repatriated. Please take notice of the income taxation in Greece.

Can I draw-up a loan to buy property in Greece?
Greek banks are well developed and equipped in offering a variety of financing programs. They have branches throughout the world and similarly many international banks have branches in Greece. Financing in order to buy property in Greece can be arranged by both Greek and international banks with branches in Greece.

Is there Value Added Tax in Greece?
Yes, there is VAT in Greece for goods and services purchased and the standard rate is 19%. Property purchase can be an issue of VAT; read more here.

What about property insurance?
Property is insured through insurance companies. Property insurance contracts cover all types of possible damages i.e. fire, earthquake, natural disaster, storm, theft, third party liability etc. Insurance costs are normally billed bi-annually though annual payments are also acceptable. Property insurance is not obligatory, but is required by the financial institutions mortgaging the property. Find more information here.