Foreigners are encouraged to invest in property in Greece if they are European Union citizens. Non-European Union citizens who wish to purchase property in the border areas are required to apply to the Council of Local Prefecture for authorization. Special agents assist the foreigners in this procedure. It will take them three months longer to acquire a property in Crete than European Union citizens. The Notary and the Lawyer will have to apply to the Minister for Interior in Greece and the office will investigate the individual’s position and antecedents to ensure that security of the Island is not compromised.
Procedure for purchase of Property
When a property has been identified for purchase, a 10% deposit on the purchase price will have to be paid to secure the property. An agreement is usually entered into at this instance and this document contains the names of the parties to the agreement, the description of the property, the price, the methods of payment and general conditions to be negotiated by the parties. This contract has to be executed before a Notary public and two lawyers representing the two parties. The Notary is expected to check whether all appropriate tax papers and deeds are in order before authorizing the sale. If the purchaser backs out of the deal after the initial agreement has been notarized, he will lose the deposit. If the vendor backs out he will have to repay the amount deposited to the purchaser.
The Lawyer will be required to assist the buyer local regulations and fix the “assessed value” of the property and to ensure that the title to the property is clean and free from encumbrance.
Taxes, Charges and costs
The Notary charges are to be paid by the purchaser and are calculated at 2% on the official estimated price. A purchase tax of 9%-13% is levied on the purchaser. If there is no fire station in the area, the purchase tax is levied at 7%. The Lawyer charges 1.5% to 2% of the sale price.
Property owners have to pay a public tax that is demanded of them along with the electricity bill and is payable once in two months.
Property whose assessed value or objective value exceeds 175.000 Euro or 350.000 Euro is subject to property taxes.
Constructing a Home in Crete
The Greek law permits individuals to purchase land of 4,000 metres square and construct houses if there are no forest or archaeology restrictions. If the plot is less than 2000 metres square and is located in an urban planning zone, permission can be obtained with ease. Within villages and towns planning permission is generally granted. However, where special Greek laws apply planning permission regulations are stricter.
Registered, skilled architects and engineers are available in plenty to assist the foreigner in the construction of the house. They generally provide the necessary advice, work on the plans and carry out the procedure for building permissions. These engineers and architects charge a 4-5% on the total cost of the building as their fees.
Property rentals and maintenance.
Property rental is not a big business in Crete. Agents do not undertake this task. However, agents will undertake to recommend good properties for sale and will help in short term letting to clients who wish to purchase the property. This is usually done free of charge. Some maintenance companies will undertake the task of maintaining the property, organizing the insurance and attending to the bills. They will also prepare the home for new tenants by holding the keys etc.
Advice
Architects in Crete cannot be fired once employed. So it is important to take care that you select your architect carefully and that you speak the same language. It is necessary to make sure that the IKA, VAT and the cost of building permits have been included into the contract. Make sure that the contract gives you the freedom to choose your builder and that the architect himself does not sign up as the builder. Make sure that the plot of land is within the village limits as this poses less problems.
Examine the cost of services in detail. Electricity transformers are expensive and if you are just outside the range of the local transformer you may end up paying to put up a new one. The electric meter will have to be set up by a registered electrician and costs extra money. Water mains are another factor that should be considered. If there are no mains nearby, you may end up paying for setting up one or you will have to put up money to get a tank built on the property to hold water. Sewerage is an important aspect to be considered. If the land is rocky building a seep away tank would be costly. |
