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Investment Properties Overseas: How To Buy Greek Property Part III | xobba.com

Investment Properties Overseas: How To Buy Greek Property Part III

Calculating The Greek Real Estate Costs: Taxes and Fees

Buy Houses For Sale in Greece – The Costs

Buying Greek property is a fairly hassle-free process, as long as you have the right professionals in place and you complete all of the bureaucracy. The first two articles in the series show you how to ensure that you have a pool of experts around you and that you know the procedure for finding a Greek property investment.

Investment Properties Overseas: How To Buy Greek Property Part I

Investment Properties Overseas: How To Buy Greek Property Part II

The next stage of buying your Greek real estate is to ensure that you are fully aware of all of the costs involved, from the transfer tax, paid upon any Greek property purchase, to the bill for your professionals. Greek property will often be over the threshold for annual taxes, so you need to be aware of this before signing the contracts and factor this in to your costings.

Buy a Home in GreeceWhat are the Initial Costs of Buying property in Greece?

Costs are always determined according to the sale value of the house, unless you choose to risk the grey area of using the rateable value of the property to lower the final bill.

Lawyer’s Fees: Typically 1% to 2% of the house value.

Notary Fee: Typically 1% to 2% of the value

Estate Agents: Usually 2%, although this can vary

Purchase Tax: For the first €11 000, this is 9% and is 11% after this threshold. For rural properties, the figures are 7% and 9% respectively.

Land Registry Fees: Typically 0.4 to 0.5% of the value

You should typically make sure that you allow 18% for the closing costs, although it is usually less. The final contract cannot be signed until these are paid and Greek banks will not release mortgage money until all of the transfer costs have been met.

Greek Property Taxes

Photo By: George M. Groutas

What are the Ongoing Taxes for Greek Property Sales?

Annual Taxes: Over 243 600 Euros, you will pay 0.3% to 0.8% on a sliding scale of the value of your property to the state and 3% to the municipality. This is assessed against the government rateable value, always less than your actual value. Municipality taxes are often levied via the electricity bill, sent every two months. The new government is considering raising the taxation threshold but increasing the rate slightly, so bear this in mind when buying your luxury Greek real estate.

In the year that you buy the property, you will need to file a tax return, consisting of forms E1 and E9, which is a few minutes work for an accountant if you have no other income in Greece. You only need to complete this in the year that you buy the property (the tax year begins the 1st January) and do not need to declare after that unless you sell it, rent it or buy another immovable asset.

Capital Gains Tax: Assuming that you purchased your property after January 2006, you will need to pay capital; gains tax when selling. For those of you who decided to use the rateable value to pay transfer tax, if the buyer refuses to do the same when you come to sell the property, then you will be paying a high rate of capital gains tax.

If you have owned the property for 0 -5 years, you will pay 20% of the difference in buying and selling price

Between 5 and 15 years, it is 10%

Between 15 and 25 years, the capital gains tax is 5%

Find The Perfect Greek Home

Photo By: M. Tiedermann

VAT on your Greek Luxury Property: If you have decided to build a new property, you will be charged VAT at the rate of 19%, which must be paid. If you intend to invest heavily in Greek luxury property, it is a good idea to set up a company, which will allow you to claim back the VAT from the government. Your accountant will be able to advise you on this.

IKA for your Luxury Greek Property: If your Greek property is in need of extensive renovation, or you plan to invest in a new build, you will have to pay the national insurance (IKA) for your contractors. Even if you self-build and plan to do most of the construction work yourself, through a nuance in the Greek law, you will still have to pay IKA for the contractors.

As part of the design, the architect will give you an estimated cost of IKA according to the man-hours required for the work. There is no way around this and trying to avoid paying generally results in very large fines from one of the departments of Greek bureaucracy that actually operates smoothly!

Despite the extra costs, buying a house in Greece is still a great investment and it is possible to find the home of your dreams at a good price compared to other Mediterranean hotspots. If you stay away from the developed regions of Crete, Mykonos and Attica, real bargains are available and it is possible to turn a profit on luxury Greek property.

The final article in the series will tie things together and answer any outstanding questions concerning buying homes in Greece.

Invest in Property GreeceInvestment Properties Overseas: How To Buy Greek Property Part IV

* Price as of 2010. Please note that Greek laws and taxes are in a state of constant change, so check with your lawyer or the Greek tax office for the latest information.

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  • Article by Martyn Shuttleworth

    avatar Martyn Shuttleworth is a professional freelance writer living amongst the olive groves of the Peloponnese, a spear throw away from Ancient Sparta, the home of long-haired heroes. He covers a range of styles, from academic writing to sales letters, and loves writing about home improvement, freelance writing, and all things Greek. If you want to hire a master wordsmith, please feel free to visit Freelance Writer Editor
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