Total transaction costs are high in Greece
March 14, 2018
How high are realtors’ and lawyers’ fees in Greece? What about other property purchase costs?
|Transfer tax||3.09%- 24%||buyer|
|Registration fees||0.48% - 0.68%||buyer|
|Notary fees||0.8% - 1% (+ 24% VAT)||buyer|
|Legal fees||1% - 2%||buyer|
|Real Estate Agent Fee||1% - 2%
1% - 2%
|Total costs paid by the buyer:||7.04% - 30.88%|
|Total costs paid by the seller:||1.24% - 2.48%|
|ROUNDTRIP TRANSACTION COSTS||8.28% - 33.36%|
| See Footnotes
Source: Global Property Guide and Varnavas Law Firm 1978
How difficult is the property purchase process in Greece?
EU nationals can freely purchase property in Greece, while there are a few restrictions for non-EU nationals. The potential buyer must open a Greek bank account and transfer all the funds required for the purchase (property price, notary fees, registration fees, etc.) in order to be in compliance with the Greek tax legislation or otherwise to import cast through the Greek Customs Authority. Acquiring property near military bases, national borders – mainly for security reasons, especially those close to Turkey - and in some islands requires special permission from the Local Council. Such permission is not granted to non-EU nationals.
The importation of funds for real estate acquisition needs to be documented and requires the permission of the Bank of Greece. You will also need to secure a Tax Registry Number from the Internal Revenue Service. If you are a married couple planning to purchase property jointly, you should each obtain one.
The first step to purchasing property in Greece is to hire a real estate attorney. He will be responsible for performing due diligence and ensuring the protection of your interests in the transaction.
Once you have selected the property, make an offer to the seller. If it is accepted, your lawyer will draw up an initial purchase agreement. Both parties will sign and you must pay a 10% deposit to reserve the property. Title search follows. Your lawyer must check if there are any charges on the property, if the construction followed government planning regulations, and all taxes due have been paid by the seller. This can be accomplished at the Registry of Mortgages. When the results are to your satisfaction, proceed to settling the remaining balance and necessary government duties.
Closing usually takes four to six weeks. You must obtain copies of the title from the seller. It is your responsibility to hire a notary public to prepare the contract deed, ensure that it has been drawn up correctly, and oversee the finalization of the purchase. Both parties must sign the contract deed in the presence of the notary who will verify and register the transaction in public records. This requires you to present a valid passport, your Tax Registry Number, and a special permission to purchase (if necessary).
In addition to this, the seller will also need to submit a B’Tax certificate proving he has a clean record with the Hellenic Fiscus (tax office). When this has been done, the final step involves submitting copies of the deed and transfer certificate to the Registry of Mortgages to change property ownership to your name.
A National Land Registry is still in the process of completion.
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.
Land Registry Fees:
The property transfer is registered in the Cadastre. Land registry fees include registrar´s rights, certificates, and stamp duty. Registration fees are around 0.48% to 0.68% of the property value.
Notary fees are around 0.80% to 1% of the property value, plus 24% VAT. The sale and purchase agreement must be notarized for it to be valid.
Employing the services of a lawyer is highly advisable to avoid the "who owns what" mischief rampant in Greece as well to conclude the legal due diligence regarding any encumbrances like liens, mortgages etc. The lawyer will help you to be in compliance with the tax legislation and will make sure that the land title is clear.
There is no minimum amount of remuneration for any property transaction for the lawyer´s fees. It is upon the agreement between the attorney and the client which is usually between 1 - 2 % on the property value, plus 24% VAT.
If this is your first property transaction in Greece, you will also need some preparatory work done from your lawyers (tax registration, opening of a bank account, official translations etc.) and in that case an additional fee usually applies.
|Preparatory work||upon agreement|
|Property transaction legal fees||upon agreement [ usually 1 -2 % (plus 24% VAT) ]|
Real Estate Agent´s Commission:
Buyer and seller each pay 1% to 2% (plus 24% VAT) real estate agent´s fee. Sometimes an allowance is made for this when setting the sale price, so in effect the buyer pays.