Greece is not only the birthplace of democracy and the western civilisation, but it is also a modern European country in the Balkan Peninsula and one of the most attractive and desirable places in the world for tourism, holidays, living and investing. Therefore, it is not hard to imagine why buying property in Greece is currently so popular among investors from all over the world.

In the year 1990 Greece liberalised its legislation relating to the acquisition of real estate property by foreigners and allowed all EU citizens to buy property even in the border areas of the country (which include the best islands in the country), while citizens of other countries need to apply to the Greek authorities for a special license. This amendment boosted foreign investment in real estate property throughout the country. The successful organisation of The Olympic Games in 2004 made Greece one of the most attractive tourist destinations and boosted the country’s economy.

Today there is a large variety of property and land in most districts of the country that can be bought. The Greek 1,400 islands are certainly the best attraction and also an excellent place to invest in property. Moreover, the Greek coastline of 15,000 kilometres offers fantastic opportunities for holiday houses or investment. Mainland of Greece also has a number of regions which could interest the investor. For example, the Peninsula of Peloponnisos is becoming increasingly popular due to the combination of a stunning mountain scenery and unspoiled virgin beaches.

Property prices across Greece are far lower than those in Spain or Italy and this is another reason why overseas buyers are increasingly interested in the Greek property market. The profit they are making from holiday rental yields and from the growth in the underlying value of their property is steadily increasing.

Investors are more interested in emerging markets and the high profit potential that could be achieved through investing in Greece does not disappoint them. Greece is considered to be an emerging property market in itself, as it enjoys steadily increasing international inward investment into its real estate sector.

There is one main difference that distinguishes investments in Greece from investments in all other Balkan countries. In almost all other countries, a foreign investor is often invited to buy land or property in regions, cities or resorts of which he or she have never heard before! Therefore, the only attraction, the only reason to invest there is the promise of a quick rise in the re-sale value and so a good capital growth of the invested capital. But we all know that this promise is not always kept.

In Greece, a foreign investor is usually invited to buy in places known to them from history and tourism books, with many names of the Greek islands and mainland regions and cities being famous around the world. Many of those names, for example Athens, Sparta, Argos, Mycenae, Epidauros, Laurion, Sounion, Delphi, Crete, Lesvos, Lefkas, Ithaka, Marathon, Salamis or Nemea are linked to either the ancient Greek history or mythology. Other islands are well-known traditional resorts like Corfu, Rhodes, Kefalonia, or modern and trendy vacation places like Mykonos, Paros, Zakynthos, Kos or Skiathos. There are also quieter and more peaceful islands still well-known throughout the world, among them Patmos, Tinos, Chios, Alonisos or Skyros.

In the mainland, there are regions such as Arcadia, Achaia, Korinthia, Messinia, Argolis or Ilia, where the Olympic Games were born 28 centuries ago.

This is all to show you, that each piece of real estate in Greece has actually a “brand name” of its own and its own value which is not related to changing market trends or mere speculation. This value cannot be affected by the ups and downs of the market and cannot be compared to what other Balkan countries have to offer, or indeed any other European country!

Legal and Taxation aspects of buying Property in Greece

• Is Greece a safe place for real estate investment?
  Besides being a modern democratic European state, Greece is a country with a very strong feeling of its people towards real estate property. More than 80 per cent of its inhabitants own their homes. The Greeks were never deprived of their properties, unlike most of the other Balkan peoples during the communist era. Greek Constitution, courts and authorities fully respect property rights. So, I would say, Greece is a very safe place to invest in real estate.
  
• Who can invest in Greece?
  Greek laws allow foreigners to own properties in most areas of Greece. Restrictions apply for non-European Union citizens who wish to buy in border areas (East Aegean, Dodecanese islands, regions of Northern Greece, Crete, Rhodes). Non-European Union citizens who wish to purchase real estate property or rent it for a period of over six years in border areas, have to apply to the relevant authority which can grant authorisation for the transaction.
  
• Is it simple or difficult and risky to invest in Greek real estate property?
  The procedure of buying real estate property in Greece is fast and simple. The law requires that for each real estate property transaction, there are three legal professionals involved: a lawyer - to investigate for the property, a notary public - to draw the contract and a registrar- to register it officially to the local Mortgage Office. All property titles in Greece are kept on the Mortgage Offices of each municipality, according to the alphabetical order of the names of the owners. A modern Land Registration System is being constructed, and is gradually replacing the old system. Until now we have 84 Land registry offices already functioning throughout the country, while almost half of the area of the country has been mapped with new technology systems. May I add that today the Greek government is fighting the red tape with new legislation and the use of new technologies.
  
• What is the cost of the fees of the law professionals?
  Lawyer: The fee is 1-2 per cent of the agreed price, depending on the difficulty of each individual case.
  
  Notary public: The fee is approx. 1.5 per cent of the contract price plus a small sum for other duties and certificates.
  
  Mortgage office: The fee is approx. 0.5 per cent on the contract price, plus a small sum for other duties and certificates.
  
  Land Registration fee: It is only 0.3- 0.5 per cent of the assessed tax value, with a minimum of €35 for every property right.
  
  Real Estate Agent: It is usually 1-2 per cent of the market value of the property. Any special agreement is valid.
  
• How much tax is payable on purchase?
  With regards to taxation for property acquisition, there is a positive evolution going on in Greece today. The general transfer tax, which was formerly 11-13 per cent, is now down to 9-11 per cent and is gradually being replaced by a transaction duty of only 1 per cent when purchasing recently transferred land or property on the secondary market.
  
  A VAT of 19 per cent is being gradually introduced upon the purchase of newly built houses, but this does not seem to have an effect on market prices. The reason behind is that building companies will be able to deduct the VAT they have paid to their subcontractors, which was not possible before.
  
• Is there an annual tax on possession of property?
  Only large properties are subject to annual capital taxation in Greece. Small and medium size properties, like a summerhouse are not practically affected by annual taxation. Local rates apply to all houses and premises and are collected through the electricity bill.
  
• How much tax is payable when selling a property?
  A new tax on capital gains when selling has been recently imposed on future sales, upon the difference of the tax prices between the purchase and the selling price. The tax rate is 20 per cent when the land or building is sold within 5 years. It goes down to 10 per cent when sold between 5-15 years, further 5 per cent when selling between 15-25 years. When selling after 25 years of possession, there is no capital gain tax to pay.

Biography

Stratos Paradias is President of The Hellenic Property Federation (www.pomida.gr) and President of Union Internationale de la Propriete Immobiliere (www.uipi.com). Mr Paradias is a lawyer at the Supreme Court of Greece in Athens (www.paradias.gr) and specialises in Property Law, Commercial & House Rentals as well as Property Taxation.