6 steps for the safe acquisition of property in Greece

APPOINT A LAWYER

Do I need a lawyer?
The presence of a lawyer during the conclusion of a real estate transfer through signing of the contract deed is obligatory for both purchaser and vendor if the value of the transaction amounts to approximately €29,137 for assets located in the area of Athens/Piraeus, and €11,739 for all other parts of Greece. The obligation applies to all contracting parties.

What does the lawyer do?
The Greek lawyer does not only accompany each contracting party but also drafts the contract deeds and provides all necessary legal advice. However, most importantly, in the most likely case of an asset not yet included in the Land Registry system, the buyer’s lawyer must conduct a factual search at the Registry of Mortgages and ensure first, that the seller holds a sound title to the property. The uncertainty of the Greek law and of the system of the Registry of Mortgages, as described above, is resolved in practice through the examination of the legal relationships in connection with the specific asset over a period of 20 years. If the seller possessed the asset in good faith for over 20 years, he has namely automatically gained original ownership.
The lawyer must also make sure that the property is unencumbered (free of burdens like mortgages or prenotations of mortgage) and free of claims (no injuctions and enforcement measures or actions pending). Further, the lawyer has to examine if possible that construction works are based on lawful building permission and all real estate taxes burdening the seller have been paid. Finally yet importantly, the lawyer often plays significant role in successfully negotiating the transfer.

APPLY FOR A TAX REGISTRATION NUMBER

In order to deal with the Greek Fiscal Authorities, it is necessary to have acquired a Tax Registration Number (ΑΦΜ). Foreign buyers should apply for the acquisition of a Tax Registration Number issued specifically for taxpayers incurring a limited tax liability at the competent Tax Office (Tax Office for Foreigners – DOY Katoikon Exoterikoy).

PAY PROPERTY TRANSFER TAX

Taxes for Real estate property in Greece are subject to various taxes. Plots of land and buildings, whose construction license was issued prior to 1 January 2006, are subject to transfer tax, which is borne by the purchaser. In case of subsequent property transfers (i.e after the first transfer) this tax is replaced by a capital gains Tax payable by the seller and a Transaction Duty payable by the purchaser. As from 1 January 2006, VAT of 19%is imposed on the acquisition of new buildings.

APOINT A PUBLIC NOTARY

The public notary’s function and duties are very limited in Greece. The notary’s duty is to explain to the contracting parties their obligations and rights that arise from the respective transaction and make sure they are aware of the implications of their commitments is fulfilled in practice through the reading of the contract deed before is signature. The instructed lawyer usually suggests a notary of his preference and trust.

WHAT ARE THE NOTARY’S FEES?

The notarization costs for a typical real estate purchase deed depend on the respective transaction value. The notary’s fees are currently fixed at 1.2% of the total transaction value. 9% of the overall amount due is paid to the Jurists Fund and 6% to the Notary’s’ social Security Fund. In addition to the fee fixed on the value, another fee related to the size of documents is also payable.

SIGN THE PURCHASE AND TRANSFER DEED BEFORE A NOTARY

Both the purchase and the transfer contracts require notarization. Contracts, not concluded in the required form, shall be null without possibility of remedy.

FORMAL REQUIREMENTS OF NOTARISATION

For the notarization of a purchase deed, a number of formal requirements shall be fulfilled. For the seller, the following documents and declarations should be filled with, and made before, the Authorities respectively:

Certificate from the competent Tax Office that the seller incurs no fiscal debts.
Statutory declaration that in the last two fiscal years, the seller has derived no profits from sale item.
Statutory declaration that the seller properly declared the item of sale in his tax return.
Certification by the Tax Office that Property Tax has been paid. In practice, evidence will be shown upon demonstration of the relevant receipt for the payment of tax.
Certification by the Tax Office that Inheritance and Gift Taxes have been paid, when the seller has come into ownership of property through gift or inheritance.
Certificate by the Community of the asset’s location giving evidence that there are no depts to the Community.
Planning permission where the asset has been built.
In areas in which the Land Registry system applies, certificate by the Land Registry regarding the status of the item.

For the purchaser, the following documents should be filled:

Certificate by the Tax Office that the purchaser incurs no fiscal depts and
Evidence by the Tax Office of payment of the real estate transfer tax

DO I HAVE TO BE IN GREECE TO COMPLETE THE TRANSACTION?

Representation though proxy

Each contracting party can give authority of representation to another person by signing a Power of Attorney. The proxy can also been given to the lawyer of the contracting party.

Form of proxy

Proxies by the real estate seller and purchaser must take the form of a notarized document. Further, proxies notarized by foreign notaries shall be recognized in Greece insofar as they have been vested with the “Apostile” form.

Procedure at the Consulate

The existence of a Greek Consulate is of huge practical importance for foreign purchasers, as the Consulate can carry out legal actions, which, in Greece, fall within the scope of a notary’s competence. That means that proxies concerning real estate transactions may be granted, when abroad, before a Greek consular official.

REGISTRATION EITH THE REGISTRY OF MORTGAGES

The notarized contract for the transfer of property can be effective only if combined with a registration of the transfer with the Registry of Mortgages or the Land Registry. However another agreement of the parties is possible.

OTHER ISSUE
When a region is taken out of the system of Registries of Mortgages and into the Land Registry system, existing property owners are required to declare their property rights on real estate within a specific deadline. When declaring a right, the acquisition title should be attached. The declaration costs amount to €20 per property right entitled to registration. The rights declared shall then be tested for legality. The declaration and filing of property rights on real estate assets in the new Land Registry system is a prerequisite for the completion of property transactions and granting of planning permissions.