Thousands of foreigners are making Greece their home or home away from home. For the most part, Germans, Britons and Americans are gobbling up property and building summer homes in Greek holiday destinations. Most of these foreigners are tourists who have visited Greece, the Cycladic Islands and the Peloponnese in particular, and have invested in summer cottages. A large number of others, mainly pensioners have settled permanently.
According to the National Land Registry, over 2,500 foreigners own property (a total of 3,200 acres) in the coastal Peloponnese prefecture of Laconia. There are also some 1,750 estates in nearby Messinia that are owned by foreigners. Over 2,000 own some 1,250 acres of land in Hania, Crete, and twice as many have snatched up property on the island of Chios.
The National Land Registry figures also show that some 700 estates (520 acres) are owned by foreigners on the Dodecanese Islands of Patmos and Symi, nearly 100 estates (56 acres) on the Cycladic Isles of Milos and Kimolos and over 450 estates (212 acres) on the islands of Corfu, Kefalonia, Zakynthos and Lefkada.
Real Estate tips and info for foreigners
Foreigners, by law, can own property in most areas of Greece. Some restrictions, however, apply in border areas (eastern Aegean, Dodecanese Islands, regions of northern Greece, Crete and Rhodes) for non-European Union citizens. In these cases, non-EU citizens must apply to the council of the local prefecture. Some real estate agents offer assistance with this procedure.
Below are a few general tips and information foreigners should bear in mind when purchasing property in Greece.
• AFM: All buyers, including foreigners and permanent residents abroad, must have a Greek tax roll number (AFM). This is issued by the tax offices. It is free and issued on the spot. Greeks and EU citizens must show their ID card. Foreigners living in Greece are required to present their passport or another valid document of identification and their residence permit in order to apply for this number. Greeks and foreigners who permanently reside abroad can also apply for an AFM. They must submit the application to a special tax office located at 18 Lykourgou St, Omonia
• ‘Pothen esches’: Foreigners buying property in Greece must file “origin of wealth” (pothen esches) documents. Anyone who buys property and does not already file income taxes in Greece must do so in the following year to declare the amount spent in purchasing the property, on taxes and other pertinent fees. Proof varies from a bank loan statement to a so-called pink slip in case of a wire transfer of funds from abroad. If the buyer cannot justify the amount of money they have spent, the Greek tax authorities will impute it as unreported income and the buyer will be assessed income tax.
• Transfer Tax: The buyer pays the transfer tax. It must be paid before the purchase.
• Property tax: Depending on the value of the property, buyers may also be subject to pay annual tax. Buyers may qualify for a tax exemption if it is their first home. In general, this exemption applies to both Greek and EU citizens.
• Notary public: A formal notarial deed is required by law in order to purchase property. The notary public fee is borne by the buyer. All real-estate transactions must be carried out before a notary public and must go on public record in the appropriate land registry. The notary public will not authorize any sale without making sure that all the appropriate tax papers and deeds are in order.
• Lawyers: Always recommended. Buyers should always retain an attorney to conduct a proper and thorough title check (at least 20 years). The lawyer representing the buyer carries out this search with the land registry. The sale can be completed only if the lawyer finds the property has a clean title.
• Proxy: Buyers who do not live in Greece may complete the sale through proxy.
• Civil engineers: Buyers should consult a civil engineer to make sure the house or apartment they wish to purchase is structurally sound because Greece is a seismic country.
• Fees: The lawyer and notary public’s fees, which are borne by the buyer, are generally about 1-2 percent of the amount listed in the notarial deed of sale.
• Sellers: They are not subject to tax on capital gain from the sale of the real estate. But they are required to present a series of documents in order to sell. Those who have not kept their affairs in order find they have to pay various overdue taxes.
Vanessa Tsourides, attorney at law, contributed to this article. For further inquiries e-mail Vanessa. Tsourides@otenet.gr