Anyone can purchase property in Greece ... there are no longer any restrictions for non-EU citizens. And the purchase procedure is quite straightforward and streamlined, something you might not expect in Greece!
The most important single step in all of this process is to be certain that you are agreeing to purchase exact what you want. You will find that Kritiko Ethos Estates does its utmost to ensure that you are completely knowledgeable of the property, its environs and surroundings, local amenities and services, routine and emergency healthcare facilities and procedures, taxi services and public transport, and so on. We will never rush you or pressurize you in any way, but we will answer all of your questions, and anticipate many others that you may have neglected to consider.
Once you have found the home or land that meets your requirements, you will need to enter into an agreement with the estate agency and arrange to make a non-refundable deposit, usually 10% of the purchase price. Once this deposit is made, the property will be taken off the market. The agreement will state however that the deposit will be fully refunded in the event the seller defaults in any way thereby precluding sale of the property. We here at Kritiko Ethos Estates do our utmost to check all properties before listing to ensure they are clean and fully sale-able as presented.
You will also need a lawyer specializing in property transfer procedures. Kritiko Ethos Estates has a number of competent and qualified and multi-lingual lawyers to recommend, or you can find your own although this is not recommended. You should meet with the lawyer and explain your intentions. You will also need to obtain his/her complete contact details as well as his/her Greek tax number and ID card number. The lawyer will prepare a Power of Attorney which will allow him/her to sign the land contract on your behalf. Your lawyer or your accountant (see below) will help you to get a Greek tax number. The abbreviation for the tax number is ΑΦΜ (pronounced AAH-FEE-MEE). This is required to purchase large assets such as a car, property, etc and also to buy a Greek mobile telephone or get a land telephone line or electricity connected in your name. The power of attorney will also enable your lawyer to open your bank account here. HINT: Put your tax number into Contacts on your phone so you will always have it with you!
Your lawyer will also transfer electricity and water services into your name(s) when the contract has been executed.
You will also need to open a bank account here in Crete. If you have done the Power of Attorney then your lawyer will do this for you. No immediate deposit into the account is necessary upon opening however 10,000 Euro needs to be depsoited into your account within one month. Unless you will be in Crete to attend the land contract in person, you should add your lawyer's name to your bank account. You will then instruct your lawyer, preferably by e-mail, to make payments you authorise in connection with your property purchase. You should transfer the 10% deposit from your home-country bank account into your account here in Crete. In this way there will be no taxes on the monies you use to pay for the property transfer services. For each transfer from abroad, your bank here in Crete will give you a certificate stating that the funds deposited in your account were received from outside of Greece and therefore they are not taxable as income here in Greece. These days the actual payment for the home (the agreed selling price) is transferred from the seller's foreign account to the buyer's foreign account without incolving the Greek banking system. This is fully legal.
While you are in Crete you should get an accountant. Property owners in Crete must file annual tax returns although, as you have legally imported the purchase funds, there will be no taxes. Your accountant will make this annual filing for you. He will need all of the deposit certificates from your bank here in Crete for the filing.
The property purchase process can take anything from four to six weeks. During this time your lawyer will do the necessary title and deed searches, ensure there are no liens or claims either on the property or the seller himself. When both lawyers are satisfied that all is in order, a date will be notified for the contract. Property contracts take place at a Notary Office with at least the buyer's and seller's lawyers present. The buyer and/or the seller may of course attend if convenient but this is not required. Once the contract takes place and the seller is paid and the new ownership deed signed, the contract/deed is registered and you will receive your copy of the contract. You are the new proud owners of the property in perpetuity!
In terms of purchase costs, you should budget approximately 9 to 10% of the agreed selling price for contractual expenses including the property transfer tax, your lawyer's fees, notary charges, property registration fee, and the estate agency commission.
Now, some pitfalls and things to be aware of, and beware of:
Selling price vs the price shown on the contract: The official government valuation of the property is the minimum value that can be shown on the purchase contract. This is often referred to as the "objective value." The agreed selling price was often higher depending of course on the property market. It used to be that it was in everyone's best interest to use the objective value in the contract to minimise taxes. This is now illegal as the seller was effectively evading taxes. In addition, as a buyer you should be aware of the new capital gains tax on properties purchased after 01 January 2013. You should discuss all tax matters with your lawyer and your accountant.
Winter vs summer: The two are radically different here. Summers are generally busy and lively in most villages, winters can be quiet and serene in some locations, and in other villages can border on "dead." As noted above, we will not let you be misled in this respect. You need to be fully aware of how things change in the winter in your village of choice.
Utilities, primarily electricity and water: Some building plots with the most amazing views can be far from these services and the cost of bringing them to the boundary can be quite high. We will show you exactly where these services are as well as get an estimate for the cost and time required to bring the services to the plot boundary.
Whilst on the topic of electricity, the annual property tax (ENFIA) used to included in the electricity bill but now it is a separate bill that your account will pass along to you. The tax amount varies with the location and size of the home but is generally very close to 3 Euro per square meter of the home.
Again on electricity, when you purchase a home, you must put the electricity in your name. The electricity company (DEH) requires a deposit of about 500 Euro. This deposit is refundable when you ultimately sell the home less the final closing bill.
Climate: Strange as it may seem, our relatively small island has a wide variety of climates and it is important to undersand the micro-climate in the area you are thinking of buying. Some areas offer fantastic views but can also be very windy making growing orange and lemon and other fruit trees (and even olive trees) almost impossible. Some areas are dry, others much more humid. If for example you sufer from arthritis or are thinking of harvesting your own ftruit, these are points to consider along with the "amazing views."
Quotations and references: We can not stress this enough! You must always get several quotations for home construction or remedial work, and you must always get references. You can get cheated here in Greece just as easily as you can in your home country. When analysing quotations, always make sure that the scope of work for each quote is the same. One quote may be less expensive but perhaps the work being quoted for is not the complete job! With regard to references, it is best to speak directly, and always to people you can trust. Word of mouth is very important here ... word spreads quickly about the poor builders and craftsmen as well as the good ones.
We are occasionally asked about bank loans or mortgages. In the current economic climate, the Greek banks are not making loans to anyone. That is one reason why the harsh economic measures are hurting not only the property market but business in general. Indeed it has contributed to the falling property prices here so taking a contrarian position, it is the ideal time to buy a property in Crete. We have spoken to several banks and our accountant as well ... all have said that it is impossible to secure a loan here but should be possible in your home country or the country where you have the most assets.
Lastly, don't be put off by all of this! It is not complicated, and you will meet many expatriates here who will tell you why they have fallen in love with Crete! And of course they will help you too to avoid pitfalls and mistakes. Social networking is an important feature here.
We at Kritiko Ethos Estates wish you every success and we look forward to working with you as your estate agent of choice in Crete.