Thinking of buying a property in Greece?
Property in Greece - Guide to Buying Property in Greece
Author: Les Calvert
Perhaps it was the attention drawn to Greece when the Olympic Games were held there in 2004. Perhaps it was the entry of Greece into the European Union. No matter what the primary reason, Greece has begun to attract an ever growing number of foreign nationals who are investing in real estate in that country since the turn of the century. Indeed, to utilize an overused term -- when it comes to real estate, Greece is hot.
The greatest deal of real estate activity in Greece involves property that is used for vacation or holiday purposes. In point of fact, some of the fastest moving real estate markets in all of Europe are those that are located in Grecian resort communities. Literally thousands of people from a wide range of different countries can be found snatching up real estate in one or another of the various Grecian resort areas.
Foreign nationals have also invested heavily in commercial properties in Greece, particularly in the larger cities in the country. This includes investment in properties that house retail operations and enterprises as well as office buildings. The demand for office space within Greece -- again, particularly in the major cities -- has increased dramatically since Greece became a part of the European Union.
Investment Property in Greece
Again, in the aftermath of the Olympic Games, many real estate analysts maintain that the country -- particularly in and around Athens -- has been overbuilt, at least to some degree. This is a natural result in the aftermath of the Olympic Games and other large scale events such as the World's Fair.
In any event, this renders Greece an ideal locale for investment in real estate of all sorts -- industrial, commercial, residential, holiday property. This factor, coupled with Greece's admission into the EU, renders it a prime spot for realty investment. A significant number of foreign nationals have been attracted to the profitable Grecian real estate market at the present time.
Residential Real Estate in Greece - Single Family Properties
Low cost single family dwellings are rather difficult to find in the Athens metro-plex. If a person is interested in residential housing in that part of the country, the best bet at this point in time is apartments (which will be discussed in more detail shortly).
Understanding the functionality of the Athens residential market, there are a number of different areas beyond Athens in which single family residences can be purchased for a reasonable amount of money.
In addition, in different resort areas around the country there are some splendid (and pricy) villas and other properties that are attractive to well heeled foreign nationals who want second homes and holiday properties. With little difficulty on the hunt, a person with a bankroll to spend, can locate and purchase these types of homes.
Finally, there are farmsteads in different parts of Greece that are on the market. Some foreign nationals have taken to purchasing these types of properties which they then renovate and turn into magnificent second or holiday homes. Oftentimes, these properties can be purchased on the cheap and improved with only a moderate investment and expenditure. There are some foreign nationals who have taken to buying and then improving these properties after which they put them on the market and turn a tidy profit.
Residential Real Estate in Greece - Apartments
With the return of the Olympic Games to Greece, there was a boom in the number of apartments that were being constructed in that country, particularly in and around Athens -- the site of the games. Once the games concluded, there was a general consensus that developers had overbuilt apartments in Greece, again particularly in and around the capital city.
With this said and understood the apartment market in Greece (most especially in and around Athens) truly has become one that favours buyers at this point in time. Consequently, many foreign investors have been active in purchasing apartment properties in Greece. Many such foreign property buyers have realized outstanding deals in the apartment market in Athens and in surrounding communities at the present time.
Holiday Property in Greece
As has been mentioned previously, the vacation or holiday real estate market in Greece is "hot." Indeed, the demand for vacation real estate has continued to increase each and every year since the turn of the century.
The country of Greece is dotted with some of the most extraordinary resort, vacation and holiday destinations to be found anywhere in the world. Tourists from around the globe can be found flocking to Greece each and every year.
An ever growing number of foreign nationals have turned to purchasing vacation or holiday properties in different locations around Greece for two primary reasons. First of all, and as was noted, Greece is a very popular travel and tourist destination. Thus, many of these people are making the purchase of this type of real estate for their own, personal purposes. Through the ownership of this type of real estate, people -- including extended families -- can enjoy extended holidays in Greece.
In addition to purchasing vacation properties for their own usage, some farsighted individuals are purchasing this type of real estate so that they can then, in turn, rent or lease these properties to other individuals. Because of the large number of people who travel to Greece each and every year, this type of real estate investment is proving to be very profitable for a significant number of foreign nationals.
Specific steps to buying real estate property in Greece
On many levels, buying real estate in Greece -- particularly if you are a foreign national -- can be a rather complicated and sometimes confusing process. However, by understanding the process up front, and by understanding the various requirements and regulations that apply to foreign nationals seeking to buy real estate in Greece, a foreign citizen can successfully acquire property in Greece.
As a general rule, a foreign national actually can purchase real estate in most parts of Greece. However, a foreign national who is not from a European Union nation must obtain the prior approval from the local prefecture in certain areas in Greece: some regions of northern Greece, Rhodes and Crete. Many real estate agents aid foreign nationals in obtaining the necessary permission in these areas. Obtaining this permission from a local prefecture generally does not take a great deal of time and usually is granted without significant fuss.
Before anyone -- a citizen of Greece, the EU or another foreign national -- can purchase real estate in Greece, that person must first obtain a tax role number, known in Greece as AFM. This number is easy to get and can be obtained at any tax office in the country. The tax number can be obtained from these offices on the sport. Citizens of Greece or another EU nation need only show their government issued ID card. Citizens of other countries must show a passport to obtain the AFM.
Grecian authorities are very concerned about where a foreign national is obtaining money to purchase real estate in Greece. As a consequence, a person from another country interested in buying property in Greece will need to obtain what is known as a "pink slip" for wire transfers of money from abroad. The purchaser has to be able to demonstrate where the money is coming from and if he or she cannot, Grecian governmental authorities will consider any money wired into the country as income and will tax it accordingly.
In addition, money to purchase real estate in Greece must come directly from a Grecian bank and bank account. Therefore, before a person can actually make a purchase of real property in Greece, he or she will need to open a bank account. Provided that a person has proper documentation, and provided that a person has the pink slip to demonstrate the origin of the money involved, it is not difficult to open a bank account in Greece.
A public notary -- who is an independent official -- oversees the real estate purchase process. Once an offer is made on the property, a preliminary contract is drafted. A deposit of up to about 10% is placed on the property at the time this agreement is executed. (The deposit is not refundable unless the seller somehow disrupts or ends the sales process or unless clear title to the real estate cannot be had in the time allotted under the preliminary contract.) After the buyer obtains his or her financing, and the seller satisfies his or her own obligations under the preliminary agreement, a final contract is signed between the parties.
With the execution of the final contract, the ownership of the property will be conveyed legally to the buyer. The final contract is signed before the public notary. In addition, according to Greek law, the real estate agent or agents who have been involved in effecting the sale must be present for the signing of the final contract.
Property Abroad always recommends using a Solicitor or Lawyer
About the AuthorProperty Abroad's directory Les Calvert writes interesting and useful articles on all subjects dealing with overseas investment property and buying property in Greece. Visit their website to view their property for sale in Greece and other useful information on buying property abroad.
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Comment
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Comment by Helen Siwak-Xanthopoulos on October 7, 2010 at 10:57pm -
The payment of "AERA" corresponds to a customary practice, predominantly
between a party who wants to rent a particularly desirable property and the
current renter of that property. Essentially, the party with a valid current
lease required a payment from the prospective renter in order to release the
owner from the lease. However, some owners of properties in particularly
desirable locations have also been known to request an "AERA" payment (which
does not appear in the conveyance documents and is not declared to the tax
authorities) from prospective buyers. The payment of "AERA" is a function of
supply and demand rather than any existing commercial goodwill in the
property per se. Nor is the payment of "AERA" in any way related to the sale
of clientele or other business assets. The amount of any "AERA" payment is
therefore clearly subject to negotiation.
In today's financial climate the "AERA" system is definitely on the wane.
Recently articles in the press indicate that even the most sought after
commercial areas of Athens and Thessaloniki currently have ample supplies of
rental properties. As a result, the rents are much lower than they were two
years ago and the payment of "AERA" is not an issue.
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Comment by lefteris panagopoulos on October 1, 2010 at 8:39am -
Hi Helen,
Thanks for the insight. What is this "aera" that is apparently charged when purchasing or renting somebody's property or business?
Is this common on all sales or rental of properties and businesses? What is the procedure for Greeks living outside of Greece when buying a property? Do they have to enroll in the Army? Become a citizen???
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Comment by Helen Siwak-Xanthopoulos on October 1, 2010 at 1:12am
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In addition:
Prior to purchasing or placing a deposit on a property, it is imperative for a Greek attorney to conduct a thorough title search to ensure that the seller holds clear title to the property. It is also advisable for a Greek attorney to confirm that there are no bankruptcy proceedings pending against the seller (since a third party to whom the seller owes money might claim a right to the property after the sale). Finally, an attorney must review the purchase agreement to protect the rights of the buyer. If the property is a home or apartment building, it is prudent to have a qualified engineer review and provide a report on the building permit and any potential unlawful building permit excesses.
The amount of deposit paid by the Buyer is negotiable. A preliminary contract is not required by law upon payment of a deposit. In the event that a preliminary contract is signed before Notary Public, the amount of the deposit is not refundable. In all other cases, the Buyer can require the Seller to return the deposit pursuant to Court action.
In order to obtain the required Greek Tax Identification Number, a foreign resident must provide a Greek address or be represented by someone with a Greek address. Foreign residents can arrange for their attorneys to represent them for this purpose.
It is important for foreign residents to choose an attorney with whom they can communicate effectively and who thoroughly responds to their inquiries. It is not necessary to use a local attorney, since the purchase agreement can be signed outside the jurisdiction within which the property is located (i.e. Athens).
If you are interested in discussing this further, please visit our website www.hellenichub.com and contact Arsinoi Lainioti at her Athens Law Firm.
Best wishes,
Helen Siwak, Founder of Hellenic Hub and currently in Athens producing the 2nd Annual Athens Greece WagAThon
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