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Buying

Legal Process

Awareness of the legal aspect of buying a property in Greece is a vital part of making you feel more comfortable about your decision. The buying procedure in Greece is similar to other systems in other countries but offers some additional conditions for the protection of the purchaser. More specifically buyers are protected and vendors can only sell to other buyers up until the preliminary contracts are signed.

Once you have selected the property of your choice you need an experienced and professional lawyer who is familiar with the property law, the local parameters and of course speaks the native language.

Basically by providing your lawyer with a power of attorney he or she will deal with all the bureaucracy and will keep you informed of the progress. The power of attorney is drawn in a way that the authority of the lawyer is directly under your control so that nothing can be done without your approval, especially regarding financial issues such as payments to the vendor. Additionally the power of attorney can be revoked at any time you wish.

One of the first things you need in order to purchase a property in Greece is a tax number. This number is known as AFM, from its Greek initials, is given to all Citizens and residents but in your case your lawyer will need to apply for it. The AFM number provides you with the basic legal status in order to be able to purchase a property in Greece.

Your lawyer will also check the deeds and other documents of the property you are buying in order to ensure that it is legal and clear of debts and mortgages.

Once the purchaser has had their offer accepted by the vendor it is regular practice to pay a deposit of 10% when the preliminary contract is signed. This will prevent the vendor from selling the property to another interested property.

Naturally, if the lawyer's extensive searches result to the property being illegal even after the 10% is paid, the purchaser can withdraw from the purchase and get his deposit back.

In brief, the lawyer assumes the responsibility of gathering mainly the following:

• § The deeds of ownership- establishing that indeed the vendor is the owner of the property.
• § A topographic plan- which shows the boundaries of the property you plan on purchasing.
• § A planning permit- if there is a dwelling on the property, to make sure that it is legal.
• § A forestry certificate- when the plot is outside the town plan. This verifies that the property is not considered forestry.

Obviously there are some purchasing costs involved apart from the selling price of the property. As you will notice from the analysis that follows some of these costs are included in the prices advertised by Talos Properties.

•1.     Property Transfer Tax or Legal Added  Value Tax (VAT) 

The Property Transfer Tax varies between 9% and 11%, depending on the specific case. The tax is calculated on the price written on the final deeds. It is applicable to plots of land or already built properties that had a building license issued before the 31/12/2005.    

For already built properties that had a building license issued after the 01/01/2006 instead of the Property Transfer Tax applies the Legal Addded Value Tax (VAT) of 19%.  The tax is calculated on the price written on the final deeds. In Greece it is possible that the contract price is the objective value of the property as defined by the Greek state which is much lower than the commercial value or selling price. In this way the buyer may benefit by reducing the amount of tax paid.

•2.     Lawyers Fees 

The minimum fee of a lawyer or solicitor for his or her involvement in the purchase process is calculated on the value of the property and is around 1%. However because when international purchasers are involved there are additional services offered that include for example the issuing of a Tax number or the opening of a bank account on behalf of the purchaser  among other things. This is why the usual fee charged is around 2%.  

•3.     Notary Fees

The fees of the Notary for property transfers is equal to 1,2% of the value of the property mentioned on the final deeds. However there are some other costs involved for necessary additional services which may raise this percentage further.    

•4.     Land Registry Fee          

This is the fee for transferring the property from the name of the seller to the name of the buyer. It is equal to 0,475% and is usually taken care of by the lawyer. A purchase is complete and legitimate only when this transfer has taken place.

•5.     Realtors or Agents' Fees

In the whole of Greece the standard Realtors or agent's fee is 2% from the purchaser and 2% from the seller. These percentages are calculated on the agreed selling price excluding all other purchasing costs. However, if the property has a value for less than 75.000 Euros the minimum fee from the purchaser and from the seller is defined at the amount of 1.500 Euros according to the Realtors Association of Chania.  

Other expenses involved are that of getting a loan or mortgage. If you require relative information please access the Finance sector on our web site.