HOW TO PURCHASE PROPERTY IN CRETE, GREECE
As soon as you have found the property of your dreams, you can make an offer. If the vendor accepts your offer you can pay a deposit of 10% as a down payment to secure it. To secure this deposit you will have to make a pre-contract with the vendor. This pre-contract will detail the conditions of the sale and the purchase price. The purchaser will lose the deposit if he backs out of the deal. If the vendor backs out, he will have to pay the deposit back plus a sum equal to the deposit, as an indemnity to the purchaser. The pre-contract has to be made by a Notary Public.
THE LAWYER:
It is highly recommended to have a Lawyer to handle all the legal work for you. The simplest way is to grant him Power of Attorney to buy any property you like in Crete on your behalf.
With a Power of Attorney the Lawyer can arrange all the necessary steps to purchase your chosen property on your behalf during your absence. The Power of Attorney can be cancelled at any time. The contract to give/cancel Power of Attorney to a Lawyer has to be made by a Notary Public. Or, when you are not in Crete, it can be made via the Greek Consulate in your country. Or via an official Notary in your country, but then of course the contract has to be officially translated into Greek.
As part of the services we can provide we will introduce you to a Lawyer who is recommended by the British Embassy in Greece.
Prior to Greece joining the European Union it was not possible for foreign nationals to purchase properties in Greece . However since joining the EU it is possible for other EU citizens to purchase property in Crete. As an EU-citizen you have the same rights and obligations as any Greek and therefore it is possible to buy. Non EU-citizens, on the other hand, should apply to the Council of the Local Prefecture, who grant permission.
The legal procedure to purchase property in Crete
basically consists of the following:
TAX NUMBER:
The local tax office can give a Tax Number, which is required to purchase a property in Greece. To obtain this Tax number you will need to provide your passport and a full birth certificate. The full birth certificate must show the names of both your parents.
LEGAL SEARCH:
It is necessary to do a legal search to assure that the property has a clean property title. A Lawyer will have to do this search at the Land Registry Bureau.
TECHNICAL SURVEY:
In addition there is an option to ask a Civil Engineer to complete a technical survey to check the construction and condition of the property.
TOPOGRAPHICAL PLAN:
It is necessary to have a topographical plan made of the property in case there is no up to date one at present. A Civil Engineer makes this topographical plan.
ENERGY EFFICIENCY LABEL:
This certificate shows how much energy a property consumes, and how much carbon dioxide it emits into the atmosphere, grading the property from A to G (similar to the way in which household appliances are categorized in electrical shops with A the most efficient rating). The certificate is valid for 10 years. A Civil Engineer can make this certificate.
PRE-CONTRACT:
It is recommended to make a pre-contract (see above). The aforementioned deposit stays on the customer account of the Lawyer until the legal search, the technical survey and the topographical plan is done with a positive result. Only then will the deposit be given to the vendor.
CONTRACT:
A Notary Public always executes the contract for the property transaction. The Notary Public calculates the officially estimated price of the property. This “officially estimated price” (the Tax value) is assessed by the tax office and is usually lower than the true purchase price.
The vendor and the purchaser can sign only contracts with a very low assessed tax value. Otherwise they need the signature of a Lawyer. One Lawyer signs for the purchaser, another one for the vendor.
LAND REGISTRY:
Immediately after exchange of contracts the new owner will be registered in the Land Registry Bureau. This is the definite and irrevocable proof that the purchaser now owns the property!
EXPENSES:
The Purchaser pays the Purchase tax, the fee for the Notary Public, the estate agent fee and the legal fees. The purchase tax is between 9%-13%. However in areas where there is no fire station the tax is lower and begins at 7%. The fee for the Notary Public is about 2.5%. The estate agent fee is 2% with a minimum of 1,500 Euros. The legal fee is about 1.5%. There is also a small fee to register the new owner at the Land Registry Bureau.
As a guide you can expect the total cost of purchasing a property in Crete is about 10 – 12% on top of the purchase price.
Additional information that might be useful
when you want to purchase property in Crete , Greece:
PROPERTY MANAGEMENT SERVICES:
During your absence from the property, to give you peace of mind our Property Management services can provide all your maintenance requirements ensuring they are carried out according to your specific instructions. This includes a regular inspection of your property, cleaning services, gardening, payment of bills and other services upon request.
BANK ACCOUNTS:
To purchase property in Greece it is not necessary to have a local Bank Account. Normally the money transfers through the customer account from your Lawyer.
However, once you have purchased a property it is useful to have a Bank Account and the best way is to go to a local branch, which co-operates with your local bank in your own country.
TAX DECLARATION:
As a property owner in Greece, you will be required to complete a Tax Declaration Form at the end of each tax year, and you will have to employ an accountant to do this.
This does not mean that you will have to pay tax to the Greek Government.
All transfers of monies from abroad are supported by a document of Bank Transfers (“pink slip”) issued by the local bank in Greece. This pink slip acts as a receipt and will be required to be shown to the tax office as proof that income was not derived in Greece.
PROPERTY TAX:
You are required to pay annual property tax on your property. The costs depend on the location and the size of the property.
LOCAL TAXES:
Owners of properties are subject to a very small Public Tax which is payable with the Electricity bill. The electricity bill is issued every two months and the Tax is such a small amount it is not a significant consideration.
PROPERTY INSURANCE:
If you want to insure your property against damage, theft, fire etc you can do this through any Bank, Post Office or you can ask any local insurance company.
TESTAMENT:
As a property owner in Greece, it is advisable to make a Greek will.
WATER:
In most places there is mains supply and it is very easy and cheap to get water.
ELECTRICITY:
If the property already has its own meter, your Lawyer can easily get the electricity (re-) connected. To grant electricity to a property (to get a new meter) a certificate is required that the property meets all the regulations. An electrical plan of the building has to be presented. Your Lawyer can arrange this in co-operation with an Electrician.
SEWAGE SYSTEMS:
A new central sewage system is currently under construction in Crete. Depending on the location of your property it may be possible for your pipe work to be connected to the central sewage system. Failing this a sewage tank will be required.
Information about building a new house and/or renovating an existing property:
PLANNING PERMISSION:
Planning permission is not required if the property is basically habitable, unless there are going to be (significant) extensions.
Inside villages and towns planning permission can usually be granted for any plot. It is normally allowed to build on 70% of the ground area. Usually you can build a two-storey house with a maximum of 400 square metres.
Outside the town-planning zone you will require permission from the Forestry Department and the Archaeological Department and there has to be frontage to a principle municipal road.
If the plot is within 750 metres distance from the town-planning zone permission can be granted for plots of 2,000 square metres or more. In this case it is normally allowed to build a two-storey house with a maximum of 186 square metres.
Otherwise, the plot has to have a minimum size of 4,000 square metres. Permission would be granted for a two-storey house with a maximum of 200 square metres.
Other rules apply for commercial properties.
Planning permission will only be granted if detailed plans are presented. As part of our service we can introduce you to experienced local English-speaking architects who will give you advice, complete the drawings and obtain planning permission, and complete the whole process for you.
The cost of the work of the architect and the planning permission depends of the size and the type of the property.
BUILDING COSTS:
Building costs will vary according to the specification of materials, the size and the location. Renovating an old stone house or ruin is often less expensive than a new build. A guide to the cost of the renovations is about 850 Euros per square metre excluding the purchase price and the cost of planning permission. This is comparable to the cost of a new build, which will normally come in at approximately 1,800 Euros per square metre excluding the land and planning permission.
In addition to being able to offer Architects services we can also introduce you to experienced official builders who can do the work for you in your absence. They do of course work with specified contracts and payment can be made by instalments at the different stages of the build, with the final payment only being due on the completion of satisfactory work.