There are no restrictions on buying property in Greece for EU nationals and a few minor ones for non-EU nationals. This relates to buying property near military bases, national borders, and some Greek islands for the purposes of security where special permission from the local council must be sought. Such permission, however, will not be granted to non-EU nationals. When buying property in Greece you will also need to provide documentation of any imported funding for the acquisition to the Bank of Greece who must grant permission. Another pre-requisite is the obtainment of a Tax Registry Number from the Internal Revenue Services (married coupled acquiring property jointly will need one each). Finally, you will need to secure the services of a local lawyer with knowledge of property laws as all documentation must be drafted in Greek.
Once you have found the property in which you would like to invest, you will need to make a formal offer. Once accepted, your lawyer will draft an initial purchase agreement to be signed by both parties. This will also require the payment of a 10% deposit in order to secure the property. Next, a title search will be necessary to ensure that there aren’t any charges or taxes owed on the property and that its construction has adhered to government regulations. All these checks can be carried out by the Registry of Mortgages. Closing usually takes between 4 and 6 weeks.
In Greece, it is your responsibility to hire a notary public to ensure that the contract deed is drafted correctly and oversee the finalisation of the purchase. Both parties must sign this in the notary’s presence who will verify and register the transaction in public records. At this point you will need to present your Tax Registry Number along with your passport and a special permission to purchase (if applicable). It will also be necessary for the seller to submit a B Tax certificate proving they have a clean record with the Tax Office (Hellenic Fiscus). The final step is to submit copies of the deed and transfer certificate to the Registry of Mortgages to change property ownership into your name (A National Land Registry is still in the process of being formed).
Additional fees at the time of closing include; notary fees of around 1.2%, land registry fees of 0.475% plus a £11 (€15) charge for the cadastral extract, legal fees of between 0.25% and 0.50%, and Transfer Tax of between 7.21% and 11.33% depending on the area. You should also be aware that if your property was constructed on or after 1st January 2006, then 19% VAT is paid instead of Transfer Tax.
Non-residents in Greece are liable to pay taxes on their income from Greek sources. The taxable income is generally an aggregate of all kinds of income, less income-generating expenses and applicable deductions. When income from employment comprises more than 50% of the declared income, however, different rates are applied to employment income. Non-residents are also liable to pay a surtax of 5% on income up to £7,875 (€10,500), unless they are residents of EU member states and 90% of their worldwide income is from Greek sources.
INCOME TAX RATES
TAXABLE INCOME RATES (£)
Up to £7,875 (€10,500) Nil
£7,875 (€10,500) - £9000 (€12,000) 15% on band over £7,875 (€10,500)
£9000 (€12,000) - £22,500 (€30,000) 29% on band over £9000 (€12,000)
£22,500 (€30,000) - £56,250 (€75,000) 39% on band over £22,500 (€30,000)
Over £56,250 (€75,000) 40% on all income over £56,250 (€75,000)
Rental income earned in Greece is taxed at the normal progressive rates. An additional surtax at a rate of 1.5% is also imposed on rental income although income-generating expenses are deductible from the gross income. Instead of itemised deductions, taxpayers can avail of standard deductions – 15% for income-generating expenses and 10% for depreciation. Rental income is also subject to stamp duty at a rate of 3.6% of the actual rental value of the property which is paid monthly.
Corporate income is taxed at a flat rate of 25% and the income of partnerships is taxed at 20% from which expenses incurred in the process of acquiring income are deductible. A surtax of 3% is levied on the income of companies from real estate. For properties purchased after 1st January 2006, the rate of Capital Gains Tax depends on how long the property was held. Capital gains are computed as selling price less acquisition costs.
CAPITAL GAINS TAX
HOLDING PERIOD TAX RATE
Up to 5 years 20%
5 - 15 years 10%
15 - 25 years 5%
Over 25 years Nil
For corporations, capital gains are regarded as ordinary income.
In Greece, State Real Estate Tax is also charged annually on properties at a progressive rate ranging from 0.3% to 0.8% depending on the taxable property value. In addition to this, you will also be liable to pay Local Real Estate Tax which is levied at 0.025% and 0.035% of the assessed value of the property depending upon the local authorities.
Greece is a parliamentary democratic republic whereby the Prime Minister is head of government and exercises executive power. Legislative power is vested in both the government and the Hellenic Parliament. The Greek governmental structure is similar to that found in many Western democracies and has been described as a compromise between the French and German models. The Prime Minister and cabinet play the central role in the political process, while the president performs some executive and legislative functions in addition to ceremonial duties. Cyprus continues to be a palpable issue in Greek politics but relations with Turkey continue to improve with Greece backing Turkey’s accession into the EU.
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